[Dave Birch] The Smartex Christmas meetings are always fun, partly because people turn up in a good mood to begin with and partly because there’s a slap up Christmas dinner at the end of it. This year’s, the 20th, kicked off with a pair of talks from old friends: Roy Vella talking about the trends in mobile payments and Adrian Cannon talking about the options for legacy payment providers in the face of competition from the alternative payment boys. There was obvious thread running through these two super sessions, which was that the mobile provides a platform for alternative payments and new entrants that simply did not exist when the old Smart Card Club got off the ground and that this platform changes the rules of competition in the world of payments.

Roy made some excellent points about how all businesses, not only payments businesses, should stop regarding mobile as a channel and start regarding it as the fundamental technology at the business-consumer nexus. As he pointed out, the next phase of mobile powered money (he used the example of the Royal Canadian Mint’s Mintchip experiment) will be very different. I agree with this: the next “kind” of money will be as unimaginable to us as Bank of England notes would be to Shakespeare. Ultimately, though, Roy’s point was that the market dynamics are shifting so that the data associated with payments is becoming more valuable than the fees associated with payments, so the next phase of competition in the retail electric transactions world will be about that data (which, broadly speaking, means that the wallet was about to break out).

Adrian took a different perspective, agreeing with Roy about the value of the data, but arguing that the collection and commoditisation of data will drive down the value of that data, turning it into a high-volume low margin business again (i.e., much like payments) that will favour the incumbents (e.g., banks). I didn’t want to disrupt the debate by arguing with Adrian (enjoyable and educational though that always is) but I suspect he is slightly too conservative in his analysis, because I feel that payments is beginning to shift away from banking and that there are others (e.g., telcos) who can manage big data just as well. He had some figures from an Edgar Dunn survey which showed that 39% of payments providers thought the regulation was the most significant issue facing them over the medium term (by comparison only 28% said technology, and only 18% said competition). I think that regulation is already heading in the right direction here, where the regulation of non-banks coming into payments is under PI and ELMI rules and not banking rules (which never worked anyway). I’ll blog more about this soon (Brett King just did so) but the idea of a portfolio of near bank products as the “account” is close.

I won’t cover the talk from MoLo Rewards here as I’m going to cover them another time. Jeremy Acklam finished off the pre-lunch seminar when he gave an excellent talk about transport and mobility, pointing out that information and payment systems are a critical aspect of transport systems and key to their take up. He also made a point about the extent to which the mobile phone is gradually subsuming other functions, and there’s no reason to think that ticketing will escape the mobile event horizon. I thought he illustrated this is rather a fun way: he’d brought along a carrier bag of the stuff that his phone has replaced! Here he is with, amongst other things, an original Sinclair Cambridge calculator.


After dinner the Smartex guys invited me to give an after-dinner talk so I used the opportunity to make three predictions for 2013 and I’ll happily stand up and be counted for them this time next year! What I said was

  1. We haven’t yet seen the impact of retailer exploitation of the new transaction technologies but I think we will over the coming year. It will be retailers who determine the next phase of evolution in payments.
  2. Several retailers have already said that they won’t be buying any more conventional point-of-sale terminals. It is inevitable that the device formerly known as the mobile phone, in one form or another, will begin to change the nature of in-store payments. I’m afraid that POS terminals are inside the handset event horizon and is even now being pulled apart by mobile gravity.
  3. Not only because of Apple’s acquisition of Authentec, but for a variety of other reasons to do with convenience, I expect to see biometrics play more of a role in mass-market retail electronic transactions by the end of next year as I blogged recently.

I’m already looking forward to the SmartEx 2013 Christmas party, where I will be subject to robust examination on the topics of retailers, POS terminals and biometrics and look forward to seeing you all there!

P. S. Roy was kind enough to refer to my arbitrary and capricious definitions of the eras of money, which I greatly appreciated. I guess I should break redraw that diagram now to reflect the fact that whereas I see “bits about bits” continuing to coexist with “bits”, I really don’t see the “atoms” continuing. However secure it may seem right now, cash’s days are numbered.

These are personal opinions and should not be misunderstood as representing the opinions of 
Consult Hyperion or any of its clients or suppliers


  1. I am glad David and I share the view as to 2013 payments landscape (http://www.finextra.com/Community/fullblog.aspx?blogid=7184).

    With regard to biometrics, things are far from being straightforward: many countries prohibit storage of biometrics templates in the cloud. Storing such a template on a card is a viable option, getting it there in the first place is not trivial. There are other ways around that issue, and I am glad to be right in the middle of that exciting field.

  2. @Dave, Alexander – the ,,third bullet,, is my favourite one. Especially in connection with the authentification method. Let´s say fingerprint. I see it as a digital signature. In the era of pads, large screens everyone use his fingerprint as a management tool. So basically if a speciall app on mobile will be able to scan fingerprint and use it the same way as existing passcodes or mpasses (it means fngerprint data won´t be part of data transfer between mobile and pos) maybe this could be the way. Well always keep in mind security. Peter

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