Avery Miller is a vice president at the Royal Bank of Canada, where he runs digital products for their loyalty program, Avion Rewards, including loyalty currency, travel, closed-loop retail, offers, and in-path check-out experiences. At NEACH’s latest Future of Payments Symposium, he shared tips on how to anticipate change and use that information to navigate an ever-evolving payments landscape.
1. Things that “stick” solve problems.
Take the medium of paper money. It represents a ubiquitous value that is mutually agreed upon. Or credit/debit cards that allow you to access funds that you don’t happen to be carrying around—that goes for ACH payments as well.
But what will solve a problem in the future, and what will stick? And how can we best understand and predict how various technologies will solve problems?
Miller said, “The future of payments is what will solve a problem for someone. But do we understand the problems that remain in play today and what would solve them effectively for customers? Those are the things we should be asking ourselves.”
2. Use two models: Flywheels and Tension.
Miller explained that he likes to use two different modalities to approach problems: flywheels and tension.
Flywheels:
Miller shared that a common flywheel is disruption and innovation driven by technological changes and customer behaviors. Accelerating data access and internet speed brings increased desire to collect more data.
As Miller put it, “Faster internet made data incredibly cheap. Once the data flow becomes easy to accomplish and gives people a surface to put a massive amount of it in the world, you start to get this flywheel of first-party data being the new goal.”
That begets things like ubiquitous mobile adoption, which causes upticks in mobile payments and mobile value exchange options, which then leads to an on-demand model for mobile payments. Driven by customer behavior, on-demand becomes synonymous with quick, automated, and personalized.
Apple Pay or Stripe, Miller said, are two examples of things resulting from a flywheel.
Tension:
“The flywheel lets you take a macro movement and put a framework to it. Tension, however, applies to more a micro-contained element,” Miller said.
This focus allows for more of a localized perspective on a topic, he continued. Historically, when you think about online spending, he said, swiping a card at a checkout is super-easy to shop but online, it can take longer to check out. But PayPal or Apple Pay is a solution; people want to shop online and have the checkout process be as simple as the shopping was.
“I think we will see payments opportunities out there in the world that follow similar examples,” Miller said.
A tension related to this is data and privacy. Customers will share everything about themselves online, Miller said, but they do want privacy over their own data—unless, he added, you give them enough value for it.
“Can you find the point of value that is a worthy exchange?” he asked.
Those in the payments industry deal with a parallel paradox: Customers wanting to move money instantaneously while still wanting flawless fraud prevention and detection.
3. The core is as active as the edge.
Miller thinks we are currently at a rare moment for payments. For the past 30 to 40 years, he said, we have largely seen advancements in technology at the edge of payments. Innovations happen at the edge faster and with a lot more thoroughness. Those changes have allowed us to move and store data faster and interact with customers in ways we never thought we would.
But now, the core is nearly as active as the edge had been.
This might be because of things like real-time payments and FedNow and increased functionality, or the idea of making a central digital currency. “There is so much happening at the core now that it makes for an interesting mash-up of core and edge opportunity,” he said.
“Take Zelle for an example,” Miller continued. “It’s edge, there was no core payment system with Zelle. It was a set of rules, but no core payment rail changed. It did create a ton of complexity though. And it does require thoughtfulness and strong management to be done right. Zelle could have gone wrong; it didn’t, because it had oversight.”
4. Remember your customer.
“So many of us in payments care so much about the payments stuff that we often forget to start with the user or client and work our way back,” Miller said. The companies who don’t forget about the customer, who make sure to remember their audience—such as startups or newcomers—will take the lead.
The future isn’t the technology itself, Miller cautioned, but the solving of the problem. A paper check isn’t good technology—but it solves a problem.
To dive deeper into these and other insights from Miller, register for NEACH’s 2023 Future of Payments Hot Topics, an on-demand, three-session package that hits the highlights of the 2023 event.
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AUTHOR: Joe Casali, AAP, APRP
Executive Vice President
As the EVP of Payments Innovation for NEACH, Joe focuses on exploring innovative solutions and technologies that will help position members for success, both now and in the future. Connect with Joe to read more of his blogs, articles, and posts.