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The future of payments depends on this one crucial ingredient

Moving money quickly and easily requires trust. Here’s how to ensure it.

The future of payments depends on this one crucial ingredient

From cryptocurrencies and digital wallets to NFTs, the money movement space is full of budding innovations going mainstream. It’s an exciting evolution for customers and companies—but when it comes to money, trust is crucial.

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Businesses are tasked with innovating to meet evolving consumer expectations without compromising that all-important trust. That challenge was the focus of a recent Visa panel at Fast Company‘s Most Innovative Companies Summit called “Trust: Powering the innovation behind tomorrow’s money movement.” Here are four takeaways from the event.

1. Companies’ number-one design principle must be “zero trust.”

As new payment innovations pop up, so do bad actors. Businesses must approach development with security top of mind, at every level of product and program. “You’ve got to start by ensuring trust is the number one priority,” said Vidya Peters, COO at Marqeta. “No matter what product you’re building, no matter how much money you’re moving.”

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Peters said companies should be led by a design principle that boils down to two words: “zero trust.” The zero-trust principle means going into a product build assuming that, despite best efforts, there will be vulnerabilities. A layered approach to protection is necessary in all aspects “when you’re considering your technology stack, the product experience, [and] partners,” Peters added.

    2. Cryptography isn’t just for Bitcoin—it’s being used for security, too.

At Visa, the digital infrastructure is attacked 2 million times daily, said Executive Vice President and Chief Product Officer Jack Forestell. Visa leverages complex technology to combat it.

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Visa has spent $500 million in the last five years on “real-time [artificial intelligence] and scoring infrastructure [tech]…that shows up in a hundred different Visa services today,” Forestell said. For example, the company hopes to eliminate the need to type in a 16-digit credit card number in favor of “smart tokens enabled with state-of-the-art cryptography” to authenticate that users are who they say are. Eventually, Visa also hopes to integrate biometric authentication like facial recognition, fingerprints, or palm scans.

    3. Today’s consumers expect frictionless, personalized experiences.

The panelists agreed the pandemic has catalyzed the digitization of payments, both for consumers and businesses. “The consumer is much more demanding of not only how embedded financial services are, but [also] how frictionless,” Peters said. She shared examples of this expectation shift, including hourly-wage employees wanting their paychecks at the end of their workday rather than in two weeks, or consumers who opt for “buy now, pay later” plans.

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She considers the last few years “a payments revolution getting compressed within a very short period of time: digitization, new payment types and formats, but also new options for customers who have been underserved.”

This shift has pushed cryptocurrencies and NFTs, which Peters likened to asking, “Why do I need to move money through intermediaries? Can I move it directly using a trusted mechanism, faster, at lower cost?” She cited a March 2022 NBC News poll showing that one in five Americans had traded, invested in, or spent cryptocurrency, and she also referenced a 2021 study reported by Inc. that found 32% of U.S. small business owners surveyed accept cryptocurrency.

“Crypto is here to stay,” Peters concluded. “The question is: Are we building…our security to match? How do we take what we know…and apply it in this new world?”

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    4. Although monetary innovations have gone mainstream, more education is needed.

Even simple new payment methods like Tap to Pay require educating both the consumer and the merchant, Forestell noted, adding he watched more customers than ever using the contactless payment method during the pandemic. “Consumers are really leading the way…seeking out and embracing new digital experiences more than ever,” he said. “Getting consumers educated is a little easier than it has been because consumers are more curious.”

The other half of the education equation—the merchants—cannot be overlooked. In 2020 Visa set a goal to digitize 50 million small businesses, sending street teams to meet with owners and teach them about options like online acceptance and “buy online, pick up in store.” Visa is halfway to that goal, Forestell said.

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Forestell pointed out that even major institutions have progress to make in becoming educated about what other companies are doing, which will reduce fragmentation. “Now there are thousands of financial institutions, millions of merchants, multiple networks, each with their own data sets and approaches,” he said. “It’s like thousands of police forces not talking to each other. We’re working hard to create standards to bring that context and data together.”

For Peters, whether it’s educating consumers, merchants, or institutions about payment innovations, it’s important to lead with the benefits. “When we [just say,] ‘You may want to know about this new thing,’ you [get] drowned out,” she said. “But when you go, ‘You can send that international wire for a tenth of the price, and a more secure way,’—now you really have people’s interest.”

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