In the early 2000s, Visa began promoting contactless payments. Now in many countries, people can no longer imagine life without tapping their cards and fast payment checkout, but it has taken us 10 long years for this technology to become mainstream. Back then, I was a General Manager at Visa and led a team that helped to introduce contactless payments across Central & Eastern Europe. It was not easy, but we already knew that this technology would create new consumer habits and help consumers pay in new ways.
3 months ago, I joined the blockchain startup Crypterium because I see many parallels: similar to contactless payments, cryptocurrency can significantly simplify and improve the lives of billions of people. I have always been passionate about how new financial services can empower consumers. In addition, cryptocurrencies can enable completely new ways to send and receive funds, borrow or save, as well as make payments. It is an exciting evolution, maybe revolution, in the way that customers can access financial services and I am excited to be part of this new wave.
Innovative financial technologies have always fascinated me. I entered technology and financial services with Standard Chartered Bank, in 2004. It was a time when banks were still relatively conservative and digital technologies were emerging. The primary way of banking was still to visit a branch or phone a call centre and card payments accounted for only 20% of retail spending in the EU.
Through new technologies — collecting and analysing customer data, we started to better understand our customers’ behaviours and then design new ways to serve them. In parallel, we started to transform the way we provided banking services by offering new products through new channels, such as on-line personal loans or mutual funds. Later, at theRoyal Bank of Scotland, I had a similar role, helping customers to deal more directly with the bank — through telephone or Internet, in ways that they best preferred. Understanding customer needs and providing better customer service, to empower them as individuals, has always been my passion.
In my professional career, there have been several times when I had to convince major companies or banks to implement innovative change through new technologies. One of the most significant was when I worked at Visa — introducing contactless payments. My job was to persuade banks to take on this new technology.
I thought that it would be easy and we could simply show them how much time could be saved by merchants and how much easier the customer experience would become. It would also enable card transactions to be done in much smaller types of outlets and shops, transforming the availability of card payments. Yet, banks being banks,were very cautious about the whole idea, at the beginning. Everybody was saying it’s not going to work, and that the technology was too complicated, and that issuing cards with contactless technology was too expensive.
What we see now is that, in places like the UK, contactless card payments, for a first time, have started exceeding cash. People have started using NFC (or contactless) payments for small purchases such as eating out, bus tickets etc. Today, some people don’t bother carrying cash with them because they can use their cards. Back then, though, we had to convince banks to start issuing these cards and that was the biggest barrier.
We started to success with more open-minded banks, who realised that by providing NFC they could present a more modern and innovative image to customers. And we knew that we had to have contactless acceptance in the best “use case” areas — such as public transit, self-service restuarants, supermarkets, petrol stations etc. — basically places where you could save time for customers by having faster, more convenient ways to pay.
I remember one of the first meetings particularly well. It was with a big bank that was quite reluctant to start issuing contactless cards. And we said let’s just experiment with your premium customers because they travel more, they get to go to other markets where contactless payment already exist. The experiment was so successful and the feedback was so positive that this bank became one of the first to start introducing contactless payments to its complet retail base. The benefits in usage were higher than costs and, quickly, customers got used to paying with contactless cards.
Other banks followed. With the introduction of NFC, the share of card payments significantly increased. In Europe, for example, if card payments amounted for around 20 percent of spend in 2004, now they amount for more than 70%.
Switching from leading financial institutions to a blockchain startup, still at an early stage of development could be seen as an illogical move. Yet, it is a very exciting opportunity to further enhance the customer experience when it comes to payments and financial services in general. So in short, I have joined Crypterium because I believe that cryptocurrencies can significantly empower consumers.
To date, cryptocurrencies have mostly been seen as an investment tool, and much of the interest was speculative. That bubble is now subsiding, giving way to the real value of cryptocurency which is to enable frictionless, almost cost-free transactions across borders, between formats whether it’s fiat (formal currencies), loyalty, mobile or other stores of value such as vouchers and gift cards. Cryptocurrencies have the potential to become universal currencies or means of exchange that can be used, instantly, across borders at low or no cost. Many traditional financial institutions are trying to build solutions like that, but it is difficult to go it alone, in regards infrastructure costs, and the players don’t necessarily want to share customer data or transactions through blockchain eco-systems, such as Ripple.
The stage of development of the cryptocurrency market reminds me in some ways of the development of NFC payments. It may not be obvious today why people should change their habits, but starting as an e-money alternative, with developments such as stable coins, wider acceptance of cryptocurrencies through different channels such as ATMs, shops and e-commerce, as well as the ennablement through new regulations, cryptocurrencies already have a chance to go mainstream and better empower consumers, outside the costly and out-dated traditional banking system. The job now is to show people that cryptocurrency is a safe, reliable and low-cost alternative to traditional financial services.
There are also some major differences to contactless payments. Cryptocurrencies can piggyback on existing financial services infrastructure, for example, when we issue a card, use a bank account, or use mobile numbers. Cryptocurrency can work in various ways across all these existing networks. The main constraint to change will likely be consumer behaviour: people see crypto as a speculative means of investment and are not yeat aware of how it could be easily used for payments. Many do not have wallets with cryptocurrency, in some shape and form. We need to build the habit.
We can argue crypto is now at an early stage of development. There’s not enough scale nor wide enough an eco-system and it can be difficult and slow to use. Crypterium’s goal is to transform this experience, which is already teh case in how we enable transfers to bank accounts or any mobile number, for example.
We believe a tipping point is beingreached. Transactions in some of apps, such as Crypterium’s can be instantaneous. We don’t have to wait for new infrastructure to be built, as with contactless, because we can use existing ones, at least for the beginnings of this evolution. As momentum builds, as the consumer experience becomes easier, more understandable and providers gain trust, the usage of cryptocurrency should grow significantly.
It took NFC 10 years to get where it is today. I hate to make any predictions regarding cryptocurrencies, but we certainly believe that innovation cycles are shortening. And anything that empowers consumers in this modern networked world and makes their lives easier, finds rapid adoption.
CEO at Crypterium
I am the former General Manager for Visa’s Central & Eastern Europe region. I have broad experience in customer analytics and customer engagement, digital payments, innovation and financial services. I have spent my life using technology to transform businesses and I now see great potential for blockchain technology to transform customers’ financial lives, whether in payments or other financial services. I have joined Crypterium because I believe that cryptocurrencies can significantly help empower consumers, in new and exciting ways.