Monoova CEO Christian Westerlind Wigstrom explores what happens after payments ‘die’ and move into the background. Like the Uber experience everywhere, all the time. However, progress needs to be made on four fronts in technology if payments are to fade away into the ‘afterlife’.
Picture this. Mae leaves her home, steps into a waiting car and goes to have dinner with a friend. On the way home she grabs some groceries. The year is 2030 and Mae has done all of this without reaching into her wallet to find a card or tap her phone.
Back in 2019, Monoova made the prediction at the Intersekt Fintech Festival that payments will cease to be part of everyday life by 2030. As a payments company that has moved $15 billion through APIs over the last four years, we think about payments a lot. Predicting the death of payments as we know them is not as far-fetched as one might think at first.
Mae is of course a fictional person, but we believe that her seamless payments experience could be a reality in 2030. The car that takes her to the restaurant is paid for the way that we currently pay for ride shares and her digital wallet is debited in the background. But unlike today when your Uber wallet only pays for your Uber, we envision one all-encompassing wallet that pays for all of Mae’s purchases.
For example, the digital menu in the restaurant charges the wallet at the end of the evening without Mae having to ask for the bill. As she grabs a few things from her local shop on the way home, weight-sensitive shelving, cameras and sensors make sure that her wallet is automatically charged when she leaves. No need to queue in front of a counter. At the same time, her smart fridge ensures that she has enough milk at home by ordering some for immediate delivery. Also, this is debited from the same digital wallet.
Monoova presented this case study at the recent Intersekt conference in Melbourne that in 2030, no one would be payING anymore, everyone would simply have paID.
However, this requires a revolution in the way we transact. Four areas of technology will be particularly key in order to support the payments afterlife:
Outsourcing. Sensors, cameras and smart appliances such as internet-connected fridges (Internet of Things, IoT) will make it possible for us to outsource aspects of paying. However, this will require a centralised place to create, manage and cancel mandates across IoT-connected devices. An ecosystem of appliances with an ability to shop for us will require access to everything from our bank balance, our calendars (don’t buy milk when I’m on holiday) and our savings targets. We should therefore expect total connectivity between IoT, our digital wallet and ancillary services such as our personal finance management tools. We are not nearly there yet.
Speed. The ability for transactions not only to move in real time once they have been initiated but also the ability for transactions to be initiated in real time in the first place. We are starting to see early access to wages coming up as a new thing – essentially, be paid every day instead of every month. Pay runs were required when systems couldn’t handle synchronicity, which they now can. This will also allow for more transparency.
Universal acceptance and authentication of wallets. A major reason behind the dominance of VISA and MasterCard is that they are the closest thing we have to universal acceptance of payment. Almost wherever you go in the world, you can walk into a shop and expect the merchant to accept your card. Today, your Uber wallet is only accepted by Uber. In a 2030-afterlife world, the same will be true for your wallet.
Currency optimisation. Though not strictly speaking required to support the relegation of payments into the background, dynamic optimsation of the choice of currency is not unlikely to become commonplace in the next decade. Today, currency is almost always determined by where you buy something as opposed to what you buy. As currencies increasingly exhibit wildly different characteristics (appreciating/depreciating, global/local), it will make sense to only use some currencies for some purchases. E.g., using an appreciating digital currency to buy a depreciating tomato makes less sense than spending that same currency on home improvements. And we probably want to spend loyalty point wherever we can before reaching for our AUD.
Preparing for the afterlife
The progress in these four areas has been uneven to date. Some capabilities are closer to the 2030 target than others. Even so, recent history has shown how quickly technology changes. Three years ago, real-time transactions were almost unheard of in Australia and now they are often assumed. This has implications for how we prepare for payments beyond 2030.
PayTo transactions, formerly known as the Mandated Payments Services, offer a promising way of bridging the gap between where we are today and a world in which we never have to interrupt our days to stop and pay. To be launched by the New Payments Platform in mid-22, these smart, real-time ‘direct debits’ will change dramatically the degree of control consumers have over their recurrent payments which – in turn – prepares the way for a world in which we are comfortable with outsourcing payments to smart things around us.
For Monoova, a payments-automation business, this future is incredibly exciting. The 20 months which have passed since last Intersekt suggest that payments really will move into the background. Payments will die. It’s time to prepare for the afterlife.
About Christian Westerlind Wigstrom
Christian is CEO of Monoova. Monoova is a Sydney-based fintech freeing business to scale with a fully API-driven end-to-end payments solution. Born in Sweden, Christian moved to the UK to study after finishing his military service. While completing his PhD at Oxford, he worked as economic advisor and speech writer in the UK Parliament before spending three years as Chief of Staff and Markets at a large agricultural startup in Zimbabwe. He arrived in Australia in late 2016.