We are now at a place in time when electronic payments technologies are accelerating like never before – and now is the moment for start-ups to break-through.
With a $5 trillion+ industry at stake, it’s easy to see why the payments industry has captured the collective imagination of Silicon Valley. Start-ups are innovating new products daily and investors are rushing to place their bets on the newest, smartest solutions.
You can see it all for yourself at TRANSACT 15, the largest gathering of the e-commerce industry, March 31-April 2, at the Moscone Center in San Francisco.
Here are four reasons why a cashless society just might be on the horizon. And better yet, how to claim a piece of the action no matter where you fall in the payments ecosystem.
1) Consumers want to pay electronically — be it with EMV-cards (cards equipped with chip technology), smartphones, contactless payment (credit cards and debit cards, key fobs, smartcards, or other devices that use radio-frequency), or on-line. Consumers in the U.S. carry a total of 1.2 billion debit and credit cards. On a global scale, global commerce would literally grind to a halt without electronic payments — 70 percent of all consumer spending is done electronically. The public is eager to adopt new electronic payment methods, realizing both the security and convenience benefits of the next generation of electronic payments.
2) The electronic payments ecosystem is huge and opportunities are limitless. Everyone from the major mobile network operators and equipment manufacturers to online service providers, retailers, major processors, all of the major card brands, and venture capital/investors.
3) Nearly 10 million American households are unbanked or under-banked. This is one of the reasons that payments is of such interest to innovators in Silicon Valley. Non-traditional payments players will increasingly enter the space to drive disruptive innovation in and around the point-of-sale. For example, while a significant slice of America is not using banks, prepaid cards are providing secure and easy to use solutions for those without traditional service options.
4) Technology is providing new and exciting opportunities for consumers and retailers. New payments technologies simultaneously enable retailers to reinvent the ways they sell, broadening their reach and capacity. Nearly 60 percent of Americans have smartphones, and that number is on the rise — the possibilities for mobile payments are boundless.
Because of the accelerated rate of change in payments and in the industries it supports, networking is more important than ever, particularly for those new to the game. The importance of partnerships in payments cannot be overstated.
Trade associations, like the Electronic Transactions Association (ETA), are excited about new and disruptive technologies and connecting thousands of payments tech’s global stakeholders, allowing them to discover innovation and engage in partnerships with concrete outcomes.
TRANSACT 15 offers a platform for those new to the industry to network with over 4,000 payments peers from 1,000 companies demonstrating the latest technologies from more than 24 countries.
This year, to support the local start-up and app developer community, First Data sponsored the launch of a start-up TRANSACT 15 scholarship program. This scholarship offered ninety startups and app developers access to a vast network of new partners and opportunities that can help grow businesses.
Attending conferences and connecting face-to-face makes a big difference in the success of any start-up. In fact, that’s how a transition to cashless society begins.
Jason Oxman is the CEO of the Electronic Transactions Association, which represents more than 500 payments and technology companies.