Money 2020: debates, discussions and doubling down

Wow. Another Money 2020 in Vegas. A peculiar combination of exhaustion and exhilaration. Days of back-to-back meetings, serendipity, dinners with old and new friends, learning and (why would I lie to you?) a few drinks and a few hours of blackjack. Back in the land of signing for card transactions, ready to explore the future of financial services.

Money 2020 Signature

Last year, I said that all the interesting stuff at Money20/20 was actually about identity and that all of the fintech stuff would have less impact than all of the regtech stuff. I still think this is true. Fintech has become mainstream, there’s no doubt about that. There was a lot of corridor talk (they don’t have water coolers and I couldn’t find the free ice cream) about how the fintechs are integrating with the key players (as if the mammals interbred with the dinosaurs rather than replaced them). The fintechs aren’t what the incumbents were really worried about. What they were worried about (other than regulatory change) were the strategies of the Google-Apple-Facebook-Amazon-Microsofts (GAFAMs) and the Baidu-Alipay-Tencent (BATs) and that (as we will return to later in this discussion) is because of the fight for data.

Perhaps I’m reading too much into coincidences of scheduling, but it seems to me that Sunday is being used to explore new topics and then in the following year some of those topics move from the experimental or exploratory sphere into the mainstream discussion. Last year at Money20/20, for example, I chaired the session on financial inclusion with Professor Lisa Servon and this year I couldn’t help but notice that financial inclusion reappeared in a number of mainstream panels and presentations, including in the superb Monday keynote from Dan Schulman of PayPal. So, if financial inclusion was making its way from the edge to centre last year, there is no doubt that it was artificial intelligence playing that role this year. I chaired the artificial intelligence panel at Money20/20 Europe in Copenhagen this year and it was absolutely stormed. In Vegas, I heard many, many people say that the AI discussion on Sunday was first rate and left them in no doubt that it would be the key mainstream topic next year.

The money going into AI is already huge and if you look at where banks are directing the cash right now, machine learning seems to be the target. This is no surprise. Banks have large quantities of data that in the past they have found difficult to extract wisdom from and they have large transactional flows that they find it difficult to manage in the context of increasing regulatory burdens. Machine learning systems excel at finding patterns and exceptions in such data, provided that they can be fed with enormous quantities of the raw material, so the main use of the machine learning systems is currently fraud detection and prevention (DBR Research, October 2017).

(This, as an aside, throws up an interesting strategic challenge for banks as they shift to AI-centric strategies, because there is a threat to risk management, information analysis and sales/marketing processes in a world of open banking where the banks may not get to see the data held by third-party providers but those providers have access to bank accounts.)

The impact is not only on retail banking. The Bank of England’s recent working paper (no. 274, September 2017) on machine learning at central banks explored the particular case study of banking supervision in an environment of imperfect information (what you and I would call “the real world”!) and came to very optimistic conclusions. In other words, AI is not only a fintech that can help individual organisations to shift improve profitability (both by reducing costs and increasing revenues) but also a regtech that can help jurisdictions to create better financial services sectors by improving the quality of regulation at lower cost.

On Monday I was up on the main stage where I had the privilege and pleasure of moderating the debate between Brett King of Moven and Steve Ellis of Wells Fargo. They are both great guys (and I’m not just saying that for form) and they made it fun for me and for the audience. Wells Fargo put Steve’s perspectives on their web site so you can read them here. As an aside for future conference organisers, I thought this was a great format because both of them made serious and substantial points – someone told me later that he didn’t realise how much his was learning during the debate! – but in an engaging structure that help to wind the day down. Big props to Money20/20 for this idea.

Money 2020

Several people said that what stuck out for them on the Monday was the difference between the Alipay keynote, which was all about the colossal numbers and opportunities, and the ApplePay keynote, which conspicuously failed to include any usage numbers. Now, as we’ve long maintained, this doesn’t really matter because the long-term play is #appandpay not #tapandpay, but there was certainly as suspicion abroad amongst uncharitable persons (of whom I am not one) that ApplePay’s usage at retail POS may be underwhelming at a time when negotiations about renewal contracts with issuers are on the horizon. Jennifer Bailey of Apple also mentioned the coming Apple Cash (which will allow P2P payments via iMessage or whatever it is called now). I don’t know enough about the US market, but I would have thought that in the European markets they will implement API access to bank accounts with access to instant payment networks and that this will come to dominate across platforms, but I wouldn’t bet against Apple on anything as a rule. Anyway, enough of that, let’s go play blackjack with some crypto-folks because they have all the money.

Money 2020

On Tuesday, Talking about inclusion, again, Kosta Peric from The Bill and Melinda Gates Foundation was in town. I went off to have a chat with him to find out all about their new open-source software for the unbanked, Mojaloop. This uses technology from Ripple to deliver interoperability between financial institutions, payment providers and other firms that offer such services to the poor and unbanked. (It uses the Interledger protocol.) This all came out of the Gates Foundation’s Level One Project, which Kosta has championed, so I was keen to understand the roadmap and how it might connect to some of our work in inclusion. Unfortunately, as so often happens, we got sidetracked by giant killer robots.

Money 2020

Last year’s general talk about blockchain this and blockchain that was less in evidence, although with Bitcoins at $6,000 there was a fair amount of cryptocurrency talk (and misunderstandings) swirling around. The blockchain discussions were more focused (there was a good panel on blockchain consortia with JP Morgan, R3, Microsoft and Hyperledger) and I thought there was less of the crazy talk about blockchains fixing everything, although it did continue to irritate me that most of the solutions being discussed were not actually blockchains at all but shared ledgers (and before anyone writes to complain, I refuse to call them distributed ledgers because in at least one example that I discussed there, there was only one node and no consensus algorithm at all).

The big difference from last year was that the main topic of discussion in the crypto space was the token/ICO gold rush. Consult Hyperion hosted a couple of dinners for friends and clients in Vegas and at one of them Arthur and Kathleen Breitman, the people behind one of the highest profile token raises of all (Tezos, now worth more than $400m), came along. Now, I am far from being an expert on the subject, but I genuinely think that when the token/ICO market is regulated correctly (and that must come soon) it is going to be absolutely massive, because it will create a new asset class and (I hope) a new and more transparent marketplace. I might even go so far as to say that it might be one of the most important long-term outcomes of the Crash.

Money 2020

There were a couple of other themes that caught my attention wandering in and out of the conference sessions. Conversational commerce, and therefore conversational payments, is on the rise. Facebook was there, as were other players, and I definitely picked up more buzz about chat and chat bots. Although I didn’t hear it discussed at the event, it seems to me that there is a strong relationship between conversational commerce and the impending shift to Open Banking in the UK. Giving, for example, Facebook API access to your bank account means that you’ll be able to check your balance, look at your transactions, send money to people all without ever leaving WhatsApp. What’s more, given the amount of payment fraud in the UK, this is probably really good news. If your lawyers continue to use e-mail instead of Signal for house purchases, they are borderline negligent.

The big day for Consult Hyperion was Wednesday, because of the “Wednesday Workshops”.  I really like the idea of the Wednesday morning 90-minute deep dive sessions on specific topics. This year I was asked to run the “Identity is Fundamental” workshop, which was a genuine honour, and I had an absolutely great set of speakers and panelists to open up the subject. Here they are in the identity cage, waiting to be released at 8.30 sharp…

Money 2020

Considering it was the early morning of the last day of the event, it’s a testament to the intuition of the organisers and the quality of this panel that the ballroom was full. I thought that identity would be a key topic, and I expected a reasonable turnout, but I was surprised to find a full room with people standing at the back when I walked out on stage. I’d like to think that it’s mainly down to Consult Hyperion’s reputation at the forefront of population-scale identity projects (going all the way back to the days of the world’s first smart identity card in Hong Kong), but I think the size of the audience also reflects just how high up the bank agenda digital identity is now. 

Money 2020

We divided the workshop into two parts. The first section was about authentication, and Brett McDowell from FIDO Alliance MC’d with input from Intel, Javelin, Diebold Nixdorf and Samsung. I thought these guys delivered a very positive message. Not that things are fixed, but there is at last the potential to fix them. As panelist Al Pascual from Javelin said earlier in the year, commenting on the news that identity theft and fraud in the US was up 16% this year and is now at the highest levels they have ever recorded, “all of the underlying types of fraud we measure are up”. But with smart phones, biometrics and strong authentication frameworks coming into place, there is light at the end of the tunnel. Perhaps it’s a slight exaggeration, but I was left with the impression that strong authentication for transactions is basically a solved problem if you plan out the system properly. We have the architecture, devices and standards to make it all work. 

Money 2020

The second part of the workshop was about identification and it closed with a great, great case study. SecureKey and TD Bank took us through the multi-bank digital identity scheme under development in Canada.

Money 2020

If the identity workshop wasn’t the most talked about thing on the final day, Barclaycard’s announcement of the Uber Card probably was. I have to say that it is a beautifully executed product. Uber gives customers the option to apply for the card form inside the app and populates the application form from data on file. Once the customer applies, they get confirmation (or otherwise) within a few minutes and can immediately begin charging rides to the new line of credit. A few days later the plastic card arrives in the post. Folks also can apply for the card online. There are some sweet flashbacks to launch the card, including four percent in restaurants, three 3 percent on on hotels, two percent back on online purchases and one percent on all other purchases. No wonder it got such attention on social media.

Anyway, after three solid days of this I needed to get away so I took up an invitation to visit the futurist Heather Vescent in her dome at Twenty Nine Palms, which turned out to be in the desert. A perfect way to clear my head and to enjoy a mini road trip involving (as it did) highways and diners.

Desert flowers

After relaxing and discussing Heather’s new book, the “Cyber Survival Manual“, I said goodbye to the desert and set off back to the daily grind. Thanks once again to the great people at Money 2020 and here’s looking forward to 2018.

The Tale of Money 2020 Vegas, Part 1

CHYP on Tour Vegas 16

Money2020 was pretty different this year. I’m glad I went, it remains one the most important events in our calendar and it’s a fantastic opportunity for Consult Hyperion folk to meet up with all of our key customers and soon-to-be customers. And I’ll go again next year. But… it’s not like in the old days. Money2020 has matured into a mainstream business event. It’s no longer a place where people go to see fascinating presentations on what a blockchain is or how P2P lending works. It’s not longer a place where people go to watch passionate debate on panels full of conflicting views of the future. It’s a place where people go to do serious business. Here I am, for example, engaging in an in-depth discussion about the business opportunities for Payment Service Providers (PSP) because of the European Commission’s Second Payment Services Directive (PSD) open API provisions on the retail payments ecosystem in the UK, in the light of the UK Treasury’s parallel initiative, the Open Banking Working Group (OPWG).

CHYP on Tour 16

I told our commercial chap Nick that I’d been into the conference and was a bit bored. He told me that we’ve done five times as much business at the event this year as we did last year. I couldn’t help but reflect on the fact that next door to Money2020 was the National Fasteners Conference. I’m afraid to say it, but this is the vision of a successful future: a trade show where everyone goes to do real business year after year. I spoke to a few other people about this. There was a feeling like we all know that SXSW will be more fun, but Money2020 will make us more money.  And to be fair, Money2020 was bigger, better organised and easier to navigate than ever before. They’ve built a very successful show.

Vegas 2016

The main reason that I was at the event (apart from to make money for the company, of course) was because I had been invited to moderate one of the financial inclusion panels and I chose to focus on what the US could learn from emerging markets when it comes to the topic. They asked me who I would like to have on my panel and my first pick was Professor Lisa Servon from Penn. Lisa wrote one of the best papers on financial inclusion that I have ever read and I thought that the best way to explore the many aspects of the issues pertaining to the small percentage of American’s who are unbanked (perhaps around 7%) and the much larger proportion who are underbanked (perhaps 20%) would be to go to a Cirque de Soleil show, so I chose their Beatles show. It was great, by the way.

Vegas 2016

I was delighted to welcome Lisa on board along with Jed McCaleb from Stellar, Michael Schlein from Accion, Daniel Monehin from MasterCard and Arjuna Costa from Omidiyar Network. Michael wrote a very good blog post on the key takeaways from this panel so there is no need to repeat them here. What I will say is that the panelists received a well-deserved compliment later in the week when I was told that is was one of the stand out panels of the event, and I wasn’t surprised. I refused to have a set script so I asked them interesting questions and they responded with interesting answer, discussion and debate. A great start to the event.


I started to become somewhat deranged on the second day, partly because of lack of sleep, partly because of the over-stimulation at Bruce Parker’s top secret Payments Illuminati dinner (which had, I have to say, one of the best ice-breaker strategies I’ve ever come across at such events) and partly because of the amount of nonsense being talked about the blockchain was getting out of control. As you can see, my mental state was beginning to deteriorate. Someone tells me that the blockchain is going to revolutionise something or other. So I say “wow that’s great – how?” and they begin to describe some fantastical elaboration of some sort of distributed database with wholly mythic qualities and tell me “there, see”. I think perhaps some of his has to do with Money2020 Europe locating in Copenhagen, home of Hans Christian Anderson and his fairy tales. The spirit is permeating the event. I swear I saw a presentation that might as well have been about magic beans for all of the actual content it had or education it delivered. I was losing it, no about.

Vegas 2016

In fact, the more I start to think about it, the more the whole thing seems like it was one big fairy tale. Most of the stories I heard weren’t true, they were marketing, and that’s a sort of fairy tale.

The Tale of the Ugly Blockchain.

There once was a little blockchain. He didn’t use proof of work to form consensus, so all of the other blockchains made fun of him. You’re a quack, they told him. Quack, quack. And the little blockchain was very unhappy. But one morning the ugly blockchain was out playing by himself, because none of the other blockchains would play with him. In fact, they were chasing him with a hard fork. But then, as passing consultant saw what was going on and came over to help him. “Hey,” said the consultant, “what is a beautiful shared ledger like you doing out here with these ruffians?”. He wasn’t a blockchain after all, he was a double-permissioned shared ledger with a practical Byzantine fault-tolerant multi-round consensus algorithm! And he lived happily ever after.

Night night.

Part 2>

Cashless as Count Zero

Speaking at this year’s World Economic Forum in Davos, John Cryan (the co-CEO of Deutsche Bank AG), said that cash could become history “within a decade”, going on to note that it is terribly inefficient. Mr. Cryan also focused on the way in which cash supports the underground economy.

Cash should be dematerialised, he said in a panel on the future of finance – and governments should be interested in this process because it would make transitions more traceable and would help to combat illegal financing or money laundry.

[From Bank chief: The end of cash could happen within a decade EurActiv]

Yes, all good reasons for getting rid of it. Hence it seems to reasonable to ask, and were I to have been present in Davos I would certainly have asked, why it is that central banks keep pumping the stuff out? On Deutsche Bank’s home turf, for example, cash is already undermining the law-abiding majority.

As even the most cursory examination of the statistics shows, virtually none of this cash is used to support the needs of commerce (the Bundesbank estimated that only 10-15% was used for this) and the rest of it is unexplained , as they say.

[From Behind enemy lines Consult Hyperion]

This tallies with the Bank of England’s estimates that perhaps a quarter of the cash in circulation in the United Kingdom is for what they call “transactional purposes”. So in two of the world’s largest economies, at most a quarter of the cash out there is actually used as a medium of exchange. And this fraction is, as you might imagine, steadily falling as cash is replaced at POS and, increasingly, in inter-personal transactions. I just paid Vic Keegan the money I owed him for the football on Saturday using my bank’s app and I can’t imagine how I might be persuaded to go to an ATM and draw out money to post to him instead.

Nevertheless, as cash is falling out of favour as a means of exchange, the amount of the stuff “in circulation” continues to grow. Here are the Bank of England’s figures for the UK over the last forty years.

Value of Bank of England Notes

So. Cash on the road to extinction? Well, as the chart above shows, there is now more cash than ever in circulation in the UK and the amount of cash as a fraction of GDP is trending up, not down. What on Earth is going on? More £50 notes than ever out there and I never see one from one year’s end to the next. Cash increasing as a proportion of GDP but falling as a share of retailer payments so, as we discussed here recently, who is using it and what for?

Look, I think Mr. Cryan is right, although probably not in the way that he means it. I mean that we will be effectively cashless in the timescale he discusses. Cashless in the Count Zero sense: cash will still be around and it will still be legal tender (although I don’t think people understand what a limited concept this is), but cash will disappear from polite society and from the daily lives of most people. The middle classes will never see the stuff. Although, to be frank, they pretty much don’t see it now as we are a debit card society.

He had his cash money, but you couldn’t pay for food with that. It wasn’t actually illegal to have the stuff, it was just that nobody ever did anything legitimate with it.

[From Count Zero – By William Gibson]

Assuming there still is a European Union in a decade then there will still be Euro banknotes and there will still be Eurocoins coins. But they won’t matter for business or for the economy. If this is the cashlessness that the Deutsche Bank co-CEO is imagining, then I’d say he is spot on. It’s a cashlessness that is too conservative to reap the benefits of a truly cashless economy, too disorganised to reign in the criminal exploitation of cash and too wedded to the symbolism of physical money to switch it off (just as we switched off analogue TV not that long ago).

Thus by “cashless”, I mean that cash has ceased to be relevant to monetary policy, become irrelevant to most individuals and vanished from most businesses. As we look to the future, we can begin to ask, quite reasonably, whether developments in digital payment technology and changes in payments and banking regulation will bring us to the point of this kind of cashlessness within, say, a generation as Mr. Cryan and I expect? The answer is probably yes, but that doesn’t mean we can’t take action to make sure!

That M0 rump cash (and I exclude various categories of post-functional cash from this definition) should be actively managed out of existence. Europe needs politicians to take this seriously and put forward concrete and reasonable plans to achieve effective cashlessness. In order to help them in this endeavour, I am gathering input from a group of colleagues to assemble a “Manifesto for Cashlessness” to put forward with my good friend Geronimo Emili from Cashlessway at Money2020 Europe in Copenhagen. Way back at the 1997 World Economic Forum in Davos there was a discussion about the electronic cash that attempted to cover all of the relevant topics and I’ve used it a few times because it provides a useful starting point for discussions. I’ve updated that list of issues and brought them together in a structure that I think rather helpfully identifies four key areas that I’m going to use to structure the manifesto (any more than four key points and no-one will remember them!) over the next couple of weeks.

Electronic Money Issues grey

So… if you have any comments on any of these issues please don’t be show and post them as comments on this post. I am genuinely interested to see what you think.

EMV and Loathing in Las Vegas, Part Five (the end)

Sitting in the ballroom, watching this whip smart Irish guy Collison. “EMV will be irrelevant in 3-5 years; NFC can do everything it does” said his guru. So when I was saying tokenisation is bigger than chip and PIN, no-one cared. But now this guru says it, it’s the news. Life. Anyway, Collison nodded and started talking. He said that the blockchain people don’t spend enough time thinking about problems that businesses actually have.

I’m sitting there watching and thinking that the kid’s a bona fide genius. Don’t see so many of them, so I’m enjoying watching him. He hasn’t just kissed the Blarney Stone, he’s fathered it’s quintuplets. I was fixed. Fascinated. Most impressive person I saw up on stage the whole week. Year, maybe.

I went back to thinking or saying that that whole NFC vs QR thing is a red herring.

“Are you sure it’s not the elephant in the room”, said the guy sitting next to me. “No,” I said. “That’s Ganesha. He’s helping me with my writing”. I don’t know how he feels about herrings of any colour.

Simple in Apple Pay

I couldn’t see much of the savage heart of the American payments system in the ballroom so I set off to see if I could find NFC replacing EMV. I jumped into a cab and off we went. As the cab pulled up down by the Golden Gate I fired up my Apple wallet and there it was RIGHT IN FRONT OF ME: NFC not EMV. “Cash or credit” the screen in front of me asked. I mentally reinterpreted the terse instruction as cash or physical payment cards issued by international schemes or their members and including prepaid, debit, credit and charge cards, other via magnetic stripe or RFID interface, or virtual versions thereof accessible via an NFC interface in a smart device.

I didn’t choose cash.

When the terminal lit up I tapped my iPhone against it and go out to leave. “No, man” the driver said, pointing at the terminal, “you gotta sign”. Oh right. “You might have told me that the terminal does not support a correctly implemented CDCVM cardholder authentication method” I might have said, or thought. I imagine it’s because the terminal doesn’t support EMV transactions, only contactless magnetic stripe. Long way to go. I was sufficiently concerned to place an emergency call to my own guru, Brian Rommele. I told him I dreamt about the elephant in the room and the red herring. “What does it mean?” I asked him. “I need a quick diagnosis and a chemical prognosis”.

He mediated for moment and then said “The user experience is a train wreck. But don’t worry about. Mobile phones will route around the damage”.

Also I might have said, or thought, that using EMV is a good idea, because of standards like that, and whether you are using it via NFC, BLE, IP or ISO7816 doesnt really matter. 

I took the little stylus and wrote “Sergio Lionel Kun Aguero del Castillo” on the screen. “No, no” the driver told me. “It’s over $25 so you have got to sign here” and he handed me a piece of paper and a pen. So I wrote “What. A. Waste. Of. Time. And. Money” on the paper and set off to find my date. I thought the best way to attract a woman in Las Vegas would be to wave money around in a peacock-like display. So I made with a Benjamin and headed towards the brightest lights I could see. Unfortunately, I’d already had my first gin and tonic so things were starting to look a little blurred.

Money2020 Toast and More

Well that didn’t work. Howard said we should go to the casino and drop some serious money. I told him that as his Director of Innovation, I recommended blackjack. So off we went. We found a couple of seats next to Bill and Ted and watched them drop $500 in like ten minutes. “Oh man, oh man”, Bill told me. “my gut feeling is telling me that this is not going to be my night.” 

“You know what else is telling you that” I told him, “the laws of probability. You just hit a 13 against the dealer showing the five of spades. What did you think would happen?”.

He was teaching Ted how to lose some more money when I started to hit it big. Before I knew it, I was $20 up. I gave $10 to the dealer gal and $10 to the drinks gal and walked out into the morning light. “Fancy a drink”, I heard a SIM Siren call, and I turned around and went straight back in.

Money2020 Toast and More

Time to get some more money. The preferred system was the familiar stripe, PIN and thumbprint system. Tried and tested. We grabbed the cash and went back to the tables. She has been up for 24 hours straight, and that sounds fun but I crack after 23 hours. I tell her we have to go, but she’s having fun, Howard’s having fun, Jake’s having fun. Bill and Ted have left.

Money2020 Toast and More

“Please” I tell her. I explain to her that the hallucinations are getting worse. I’m seeing crazy things. Hearing them too. “You gotta fight, for your right, to paaaaaartttttaaaeeeee” sings the guy on stage. People are flying over my head. “It’s over”, I tell them. I just can’t do it. Twenty three straight hours is my limit. I’m not a young man any more.

I woke up and went to look for Bailey. I called her cellphone. “Have I got a story for you!” I yelled over the casino din. She was in Henderson, giving a talk about how you should follow your passion and act on it. “Follow your passion”, she said, “and act on it”.

OK, I told her, I’m going down to the Strip.

“That’s good” she said, “What are you going to do?”

I told her that I was going to see if there was any variation on chip authentication times between different acquirers using the VX520s.

“Stay there” she said, “I’m making an intervention”.

The Manatee was in front of the hotel in half an hour. I got in and settled back in the seat. I thought the engine was talking to me. It was saying “get processing options” over and over again.

I’m crashing. The lights of the oncoming cars have become hypnotic and dissociated from their mundane roots. My eyes just won’t open. I think she is telling me that she wants money to go tripping. I’m telling her about the fight between the Red Herring and the Elephant in the Room. “You’ve got to help me,” I pleaded. “Get me to a Denny’s, and quick. I mean, emergency quick.”

BLR13 Dennys

The breakfast physician triaged us into a booth. I kept my head down. My plan was to order crystal meth but I ordered a pot roast instead. When Jesse Pinkman’s crazed uncle delivered it, I ate it as if it were nectar. She had the chicken fried steak and we climbed back in the Great Grey Manatee to head out of town. First we need some gas…

With The Money 2020 fading behind us we finally came to the savage heart of the American payment system. The gas pump has a card swipe so I use my AMEX card, which has chip that the pump doesn’t use and a contactless interface the pump doesn’t use. The pump asks me for a ZIP Code, but it’s a British AMEX card so it doesn’t have one. The only ZIP Code I can think of is 90210 so that’s what I punch in but the pump says that it’s invalid and so the transaction is cancelled but not before a message pops up on my iPhone telling me that I just paid $99 for gas. So I go in and tell the cashier but I don’t think he speaks English, or at least the Queen’s English, and appears baffled by my genuflections and pantomime EMV dip. It’s clear he has no idea what chip and PIN, chip and signature, contactless, in-app, Chase Pay or NFC is. I take out my Simple card.

“How much gas do you want?” He asks me. I have no idea.

I look over at Bailey standing by the Great Grey Manatee and I guess “$30?”

So that’s what he rings up. I swiped the Simple card in about a tenth of a second and the POS asks me for my PIN. I punch it in and walk back outside. Bailey hangs up a call and we climb in and move off. “By the way,” she says as I fiddle with the seatbelt, “it’s tan”.

We were somewhere around Barstow on the edge of the desert when the coffee began to wear off. I remember saying something like “I feel a bit lightheaded”, but then I always do after The Money 2020.

See you next year.

EMV and Loathing in Las Vegas, Part Four

Howard told me to get down to the hacker phone  as least I think that’s what he said) in the ballroom and see what the kids were up to. I can’t say that I know what hacker phone is but it sounded like the sort of thing I would enjoy because it was time for a change. I figured that I would be able to blend in, but he wouldn’t. “As your Director of Innovation,” I told him, “I advise you to stay upstairs with the legacy minds”. Off I went.

As I made my way into the vast, cavernous ballroom, I saw the unmistakable figure of the Energy Magnet. Try as I might, I couldn’t stay away. His French charm and droll Gallic wit drew me in. The frenzy of coding (yes, I saw kids, hunched over keyboard, typing in strange languages) began to recede and a strange calm settled over us.

EMV and Loathing in Las Vegas

I awoke to find myself in 19th century Venice, in the Republic of San Marco, where I am responsible for organising the defenders against the invading Austrian forces. The prolonged siege by the invading Austrians has led to shortages and privations inside the walls (for example, only one flavour of Häagen-Dazs was available during the afternoon break) but the morale of the people remains strong. Field Marshall Radetzky is at the gates with cannon, but I am sure our gallant leader Daniele Manin, restored as the President of the Executive Power will see us through. I walk across to bridge over the Grand Canal and urge our men to remain strong.

Just one cornetto

One of the key issues for a consultant is how to be where the action is. How to tweet to where the puck is going to be, as boring and derivative management consultants are heard to say. The hallmark of a gonzo consultant, though, is to be the puck that people want to tweet to. This means working out the right place to be at the right team, being an expert in conference calculus. Where is something going to happen? After prospecting , I set off and hit Twitter gold at the great Bitcoin / blockchain face-off.

No-one was talking about Bitcoin much, as far as I could see. Man, I feel sorry for those guys. Everyone was talking about the blockchain. Real businesses. Wall Street. I followed some of the Bitcoins down to the trash and helped them ditch their placards. “End the Fed” said one of them. “Hey Hey EMV, Don’t You Stick Your PINs In Me” said another. “Fractional Reserve Banking – Nein Danke” said another, showing that the Europeans were in to. I broke another one in half.

“What do we want” I shouted, trying to raise morale.

“A means of exchange suited to the online world and a store of value independent from nation state control and monetary policy established by democratically-elected governments” they shouted back.

“Why are you jumbling these things together?” I shouted. Nothing.

Then I followed them back  to a huge room where there was a discussion about Bitcoin going on. Somebody onstage made a comment about the concentration of Bitcoin hashing power in the hands of Chinese miners, whereupon an actual Chinese miner with rigs in China, Mongolia and Tibet (accounting for around 10% of total network hashing power) came to the microphone and made an impassioned plea for miners outside China to pull their fingers out and start doing some proof of work. His point was well made. So long as the majority of the hashing power remains in these pools, the Bitcoin blockchain will remain unattractive for a great many mainstream industries and this is not in the interest of Chinese miners since they are expending a lot of effort producing Bitcoin and want the price to go up.

EMV and Loathing in Las Vegas

There was no competition for the prestigious award of the prize for the best question from the floor. He had won hands down and there was no point waiting until the end of the event to deliver the trophy. I found the gallant miner and after a short speech of approximately 75 minutes in which I ranged eloquently across the arguments for double permissionless ledgers such as Bitcoin versus permissioned ledgers where mining incentives might be withheld, and made a few especially telling points about the wide range of potential incentives in the latter case, I awarded Chandler Guo the magnificent Toast D’Or.

Money2020 Toast and More

After handing Chandler his trophy, I set off find some of the Bitcoin visionaries so that I could put an arm round their shoulders and talk to them about the death of their dream. It was then I noticed Doctor of Journalism Michael Casey so I decided to go and put an arm around his shoulder. He was like “double permissionless” and I was like “permissioned” and then he was like “double permissioned” and I was like “permissionless” and then he was like it’s the “Age of Cryptocurrency” and I was like but “Identity is the New Money”. Yeah, well, just because you wrote a book about it doesn’t make you all that, one of us said.

EMV and Loathing in Las Vegas

It was at this point that I got the message from headquarters. It said that I was to go urgently to cover an Innovation in Payments convention down in Irvine California and that it would be on expenses. It was time to leave The Venetian. I showed the invitation to a few people note, one of them being a Doctor of Journalism.

“No way,” Bailey said.” I’m going to that convention too! Why don’t you join me in the Great Grey Manatee and we’ll make a road trip”.

“I’m in”, I said, and set off to tell Howard, but he had already packed his bags and left to go east. I sent him a message. “As your Director of Innovation I advise you to meet me in Boston on 17th November at MIT”.

EMV and Loathing in Las Vegas, Part Three

When the instructions to the party had first turned up in my inbox I was a little suspicious. “You’re invited”. What does that mean? What were they trying to tell me? I’d been made a kind of honorary member of the Payments Illuminati (our motto: someone you trust is one of us)  a year or two ago, but I didn’t realise at the time that membership came with responsibilities as well as an eight course meal with matching cocktails tapas rights. I stared at the menu. And stared some more.

EMV and Loathing in Las Vegas

What did they want? I didn’t want to attract attention so I told Howard that I was going to go have a glass of water and compose some calm reflections on Early Warning’s acquisition of ClearXchange and that I might be some time, because I needed a way to portray bank consolidation and an attempt to stay in control of the underlying platforms for future commerce in a funny way. But he was already heading down to the bar with a blonde.

I went in and sat down under the watchful gaze of Illuminati puppetmaster Bruce Parker. The guy opposite me said, with a hint of a Czech accent, “What is your favourite payment mechanism?”.

Wow. That set me thinking. On the one hand, I’m very fond of the Mayan cocoa-bean mechanism of exchange that was in use in from pre-Aztec times through to Central America in the 19th century, which had the particular merit of having a kind of demurrage built-in, because the beans were unsuitable as a long-term store of value. I took another sip of the rum-based rocket fuel had put in front of me.

On the other hand, I started to think, I do have an enduring fondness for the stone currency of the island of Yap both for its role in Milton Friedman’s well-known treatise and for its resurgent role as a narrative mechanism for introducing the concept of Bitcoin to people with no knowledge of mathematics. Damn.

I really didn’t know what kind of answer he was looking for and I didn’t want to show any kind of weakness or hesitation. I needed them to believe I was an insider, a payments yogi. I took a sip of rum and I said “Apple Pay, but only in a terminal that says Android Pay, because I don’t follow The Man’s rules.”

EMV and Loathing in Las Vegas

Then I thought I’d better try to make conversation so I asked him, how about you? “ELV” he told me, which I think gave away more information than he wanted to. While still trying to figure out what this payments state-within-a-state was up to I realised that I wasn’t sitting up any more and that this might not be the kind of behaviour expected of a gonzo consultant.

EMV and Loathing in Las Vegas

“Transparency is the new black”. I don’t know if I thought it or said it.  I adjusted my posture, and sat up at the dinner table to pay attention. That was when the cherry Mescal arrived. Game over man.

EMV and Loathing in Las Vegas

Things turned nasty. I’d hardly finished the next gin-based cocktail before someone started going on about Nasdaq and the blockchain. “A blockchain”, I said. “Yes, that’s what I said” the guy told me. “The blockchain”. “If you don’t know the difference between the blockchain and a blockchain, then you are a blockhead” I told him and started sniggering uncontrollably. It went to and fro. Circular. Going nowhere. So Jonathan Levin asked me draw it on the back of a napkin. So I did. And here it is. A bit crumpled, but can just make out the scribbled replicated distributed shared ledger taxonomy. Or reptile disturbing seared dodger taxidermy, if you’d prefer.

Birch-Brown-Parulava gs

Meanwhile, news had filtered through that Nasdaq were in fact launching a new platform for trading shares in private companies. Goddam. So now it’s a blockchain, not the blockchain. The Man was in control. I thought the blockchain was going to be the LSD of this generation, freeing their minds and opening up new ways to run the world outside the bounds of the senile oligarchy presiding over our corrupt corporatist nation. Damn The Man. “No!” I shouted. “This bar is permissionless! Get me a gin and tonic!”.

Later, much later, I was having a very pleasant conversation with the guys next to me, swapping stories ago getting pulled over by the cops in different states in different circumstances when I saw the shadowy figure of the reclusive Shamir Karkal over at the bar. So, I started thinking to myself, I think someone is pulling the strings here… “I’ve got to go, Bruce!” I said and stood up to leave only to find myself face-to-face with the Tapas Madonna. Her bright red lips were the focus of my entire world and the cascades of black hair falling to her shoulders were a frame for the kind of transcendental beauty that you can only see when you have been awake for 23 straight hours. “Make a distraction and I’ll follow the entrepreneur” I whispered…

EMV and Loathing in Las Vegas

“Would you like the last sea urchin roe on toast?”, she asked me.

“I didn’t want the first one” I replied, and walked towards the exit as if I was on slow-mo.

EMV and Loathing in Las Vegas, Part Two

I was following Howard down the long long corridor disappearing off into lights and chaos at the horizon. He was urging me on, telling me it was time to go and to be the story, so I followed. I’d already told him that, as his Director of Innovation, I advised against going to breakfast meetings at 7:30 AM but he was insistent.

EMV and Loathing in Las Vegas

It was about this time that we had our first business meeting. Howard said that I should go blend in, but I couldn’t see how. “Come on!” I told him, “think about what you’re saying! I’m a middle-aged overweight balding white guy – I’ll stick out like a sore thumb!”. A better plan was needed, but we were out of time. A woman who looked like she knew what she was doing came up to me.

“I understand that Consult Hyperion has leading-edge expertise in tokenisation and that they have been working for issuers in a number of different countries helping them to develop tokenisation strategies, procure tokenisation infrastructure and launch new products and services for both Secure Element and Host Card Emulation financial applications?” she said.

“Yes, we have” I said. “And to prove it here is a piece of toast with my face on it”.

EMV and Loathing in Las Vegas

I guess this whole business thing isn’t as hard as I’d thought. And the good thing about toast is that you don’t run out of it. The recipe is quite simple.

“Quick” Howard told me, “get your act together man”. He was pointing down the corridor and telling me that guy in the grey jacket works some kind of scheme and that they had launched some cool products for The Money 2020 and that we should check them out, especially the stuff about issuer-authenticated tokens for loading into wearables. So I decided to take things by the scruff and I strolled over to him to find out if he could put tokens in the chip in my toaster. I offered him some of my peace toast as a show of friendship and he took it. Give peace toast a chance, I told him.

EMV and Loathing in Las Vegas

“Gonzo!” Howard was shouting.

“I’m in the kitchen,” I told him, “I’m making toast for peace”.

I went back to the kitchen to make some more toast for peace when I heard a commotion in the room outside. I heard a woman. “No,” she was whimpering. “The madmen, they finally did it. It’s war.”

My blood froze. I didn’t want any part of the The Man’s war, but the terrible coffee coursing through my veins turned my fear into a thrill.

“What? What happened?” I said, wanting to turn and run but fascinated to stay and see. “They did it” she said. “They dropped the bombshell.”

Oh my god, I thought. I’d written about the possibility for a resurgence in three-party schemes before, but I wasn’t sure anyone would really do it. Yet the Generals in the J.P. Morgan Chase war room had gone for a first strike and launched Chase Pay. There was sure to be retaliation. Why? Best I could think of is that deep agents for MCX had been activated.

So what to do?

Then we had the idea. If I was going to be more of the story, then we should use the fact that I stick out like a sore thumb to stick out like a sore thumb. 

“Leave it to me. I know people”, I told him and went downstairs to find my old friend Jonathan Weiner. I slipped the Benjamin in his pocket like the Amazing Randi and reminded him that he owed me for that Danish thing. Like magic I was in the green room and before I knew I was out in front of the conventional conventioneers.

Authentication Panel

Well, that worked out. I just asked a couple of questions that I found scribbled on a napkin at the lectern and these smart dudes on stage talk about it. I tried hard to remember what they said because I thought I might interest Rolling Stone in a thousand words on but as soon as a stepped down and saw the free Haagen Daz my brain kind of scrambled. The Bank of America woman said authentication is a big deal and that they had a million customers who used it for fingerprint login, the FIDO guy said that it was standard, the Samsung Guy said they chose it because standards grow markets, the Payfone guy said that mobile handsets were the best solution for most people and the Oberthur guy said that tamper-resistant hardware made it all secure. Cool.

Afterwards I had another drink and headed off to find some grown-up Vegas relaxation. I saw some kind of massage therapy service and figured hey that’s just what I need right now, so I went in through the discreet door.

EMV and Loathing in Las Vegas

But when I got inside, it was just a bunch of people talking about chips and stuff. The nightclub was advertising a band called Intel, but I couldn’t stay and wait for them to play so I just tried to make friendly with the hep cats hanging down there. I asked this guy why there was such a fuss about putting a Trusted Execution Environment inside a POS terminal but didn’t understand what he told me (something about security, or maybe he was calling security). Then I heard someone behind me order another gin and tonic (I think they got the idea from me) and say something about getting toasted. “Man,” I told him. “I’ve got just the thing”.

EMV and Loathing in Las Vegas

Them I remembered about the party invitation. I wasn’t sure if it was a three-party party or a four-party party, but I was in the mood.

EMV and Loathing in Las Vegas

A Savage Journey to Heart of the American Payments System.

We were somewhere over Barstow on the edge of the desert when the drugs began to take hold. First of all it was the coffee. I probably had one cup too many as I just couldn’t fall asleep. I just sat there in my cramped seat, wired and staring straight ahead. But then it was the gin and tonic that really did it. I should’ve stopped at one, but I’ve got a fatal character flaw, an addictive personality and I just couldn’t resist. I ordered the second and that is when I could feel reality  beginning to slip away…

We were on our way to check out The Money 2020, some crazy out in the desert payments thing. I don’t really know why. I’d been sitting minding my own business when the Finance Director called. “You’re going to cover The Money 2020, with Howard”, he told me. I didn’t have time to think. “There’s a suite at the Venetian” he told me. And expenses? “Yes, expenses”.

I called Howard. He picked up the phone. “What’s up, Gonzo?” he said. So I told him. I told him I was frightened. It’s a zoo. There’s like 10,000 people and they all care about payments. That’s like, crazy. “We need to go, Gonzo” he told me. “Why?” I said for the tenth time, “What’s the story?”. Be the story, he told me. This isn’t about consultancy, this is about gonzo consultancy. Next thing I knew I’m in the lounge. I saw this  guy, looked like he wanted to go with us. Said his name was Tim.


He came along in a seat up front. He must have been more loaded than we were. Started babbling about digital money. Tibado, he might have said. Or Tibadoo or tip ado. Or something. I figured there would be a lot like him out there, under the desert sun, getting ready to change the world by making a marginal reduction in transaction costs for a limited subset of monetary interactions. I’ve heard it all before, mostly from me. Zzzz zzz zz.

The drugs are kicking in

Was I dying? My brain was shutting down, like they say it does when you’re at the end. I was feeling numb and I couldn’t think straight. All I could see was a bright light. Oh well, I thought, it was a good run. I saw the great Wall of China and the launch of Mondex in Swindon. It’s my time.

Suddenly, Howard was there. He turned off the reading light. I could still see. “Howard,” I said. “I’m going. I’m slipping away”.

He looked at the pile of paper in front of me. “What did you do? You idiot! You’re not supposed to go through it all at once!”

He picked up the in-flight magazine and waved it in my face. “These are meant for emergency use only! If the plane is going down, then you open up the in-flight magazine and start reading it from beginning to end. You’ll be in a coma long before it hits the ground. Otherwise: no more than a page or two a time!”

I realised immediately that he was right but I was out of control and I glanced down at the page in front of me. “Morocco: Land of Contrasts”. I started feeling drowsy again almost immediately so I decided to take matters in hand and I stood up and began wobbling unsteadily towards the back of the plane to try and find something to bring me down. A nice cup of tea maybe. I wasn’t sure at first, but then I realised it was Emily Baum standing in the aisle in front of me. Smart lady. I always take her seriously. She looked panicked, distracted. “They’ve run out of vodka” she told me. I sensed her pain.

The tea and the KitKat stabilised me and got me as far as the immigration line. But when the cop asked me what I was doing here I couldn’t remember. My knees turned to jelly for a moment and while I was thinking what to say I remembered something that Howard said about how all of our clients would be there. But where? And then I remembered, and I told the cop about The Money 2020 and he let me through.

I caught up with Howard again in The Venetian. He was thinking about ordering something to eat but I told him as his Director of Innovation I advised against it. We’re both going to dinner tonight, was my thinking, so maybe just a coffee is enough. I told Howard that I was still feeling the effects. I hadn’t slept at all. The suite was great, but my head wasn’t. And just when I thought I was going to drop off, the alarm went off to remind me that it was time for the Manchester derby. My suite had two huge televisions in it I couldn’t decide which one to watch so in the end I turned on both of them and watched them grind out a nil-nil.

Afterwards I’d walked through the casino which had turned out to be a bit of a mistake because the flashing lights everywhere were very confusing. I stopped for a  moment try and work out what the blackjack dealer was saying but then I realised that the blackjack dealer was some kind of robot on a screen and the woman I thought was talking to me wasn’t a blackjack dealer but just someone playing a slot machine. “Are you having a good time?” she asked me. “Yes, yes” I told her, and then I told her why. I began to explain just why is that scheme tokenisation is much more important than chip and PIN. “This whole thing” I said, waving my arms around, “is to celebrate it”. I was guessing, really. I couldn’t think what else it was about it.

I was telling Howard all about this but I had to admit I couldn’t remember which things were real or imagined, dreams or nightmares. I thought I saw something out of the corner of my eye and I told Howard that I thought there might be some lizard people here disguised as payments experts.  “Lizards?”, He responded sceptically. “Well” I told him. “I couldn’t say for sure that they are lizards, but reptiles of some kind. I think I saw claws”. I didn’t tell him that I knew there must be people trying to destroy the system from the inside, and their reptilian nature might explain their poor strategic planning. Mobile payments, I thought. Or said.

Then I told Howard that when I’d woken up yesterday, I’d made some toast, and the toast had come out with my face on it. “You’re going insane” he told me. “There’s no shame in it. But you need help. Think about it: you can’t put people’s faces on toast!”.

“As your Director of Innovation”, I told him, “I have to advise you that you are wrong.”

You're toast

 See! See! It’s not a nightmare it is real. And I showed him. “But”, I told him. “There are some nightmares that won’t go away”.

“Like what”, he asked.

“Well, I heard some voices on the plane and I heard them saying that in America they are going to deploy EMV using chip and signature! Crazy ha!”.

 “Sorry, man” he told me. “That shit is for real”.

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