i3 - March/April 2016 - 30

BY ROBIN RASKIN

First

CES

Digital
Money

Forum

This year at CES, how
much of your cash did
you spend? If the answer
is "not much," then
you're in good company.
Swiping and tapping
are replacing cash,
begetting a host of new
ways to buy, pay and
receive.
The emergence of payment alternatives was the
focus of the first Digital Money Forum at CES.
Michael Casey, former Wall Street Journal reporter
and senior advisor to MIT's Cyber Currency Initiative, framed the conversation. He said, "Money is
nothing less than the most powerful technology
at CES, yet its digitization is just beginning. We
can share digital information around the world in
zero time and at zero cost, but today it costs more
to wire $50k from New York to London than it
does to send a diamond ring insured for the same
amount on the same route."
For CES attendees, the new money schemas
empower tech disruption and innovation. At the
conference there was a general agreement that the
next financial giant is as likely to be a tech company
as it is a bank or investment company. Traditional
30

MARCH/APRIL 2016

CES 2016 WRAP-UP
banks and financial institutions are saddled with antiquated IT systems, old
regulatory policies and lots of brick-and-mortar overhead. And they are finding bold new approaches to banking and payments.
Change is being catalyzed by mobile devices, data analytics, safer and more
powerful hardware, and contactless payment systems. Add a millennial population with little tolerance for queuing up at the teller window or waiting five
business days for a check to clear.
MasterCard, underwriter for the conference, deftly straddled the line between
"finance and tech," old and new. Betty DeVita, MasterCard's Chief Commercial Officer, pointed out in her keynote speech that although 85 percent of U.S.
transactions are still cash-based, there is a voracious appetite from buyers and
sellers, large companies and small companies and governments for new forms
of commerce and transactions. MasterCard showcased a panoply of things from
wearables that use biometric authentication (Nymi), to jewelry that can make a
purchase (Ringly), to refrigerators that can order groceries when you've run low
(Samsung). USA Technologies showcased the transformation of the simple vending machine into a sophisticated contactless payment system.
Jeff Miles, from chip maker NXP, stressed the importance of a new generation of components fueling capabilities in bank cards, digital wallets, NFCenabled phones and even IoT devices. "The explosion of devices that depend
on hardware security, authentication and tokenization is growing fast," he
said. "New contactless systems for payments, access and transit are being
announced daily all over the world."
At a show filled with Internet of Things (IoT) devices, it wasn't hard to imagine how money transactions would fit in. "At some point in the relatively near
future," said Casey, "your fridge will detect that it's running low on milk and
will automatically order four more quarts from a robot-run dispensary that
delivers groceries in self-driving trucks." The technology exists, the dilemma is
"who pays whom?" Who handles the wallet? What sort of know-your-customer
"identity" do we assign the fridge?
THE ROAD TO TRANSACTIONAL PERDITION
Still, we've got a long way to go. Matt Schultz from CreditCards.com shared
proprietary research from the holiday season that found only 14 percent of
consumers had planned to use their mobile devices to shop. Convenience and
security were the biggest obstacles cited.
A panel about digital wallets looked at the sobering reality of too many competing systems, causing confusion for both consumers and retailers. The audience
heard about digital wallets as different as Coin's credit card-like device that holds
all of your loyalty and payment cards in one, to SnapCard's Bitcoin wallet. Holiday
stories of wallets that didn't work at the register, and consumers trying to determine who accepts what, shed light on some common frustrations.
FRICTIONLESS SHOPPING
Qualcomm took the conversation a step beyond the wallet into a more comprehensive retail environment. Focused on secure transactions, Qualcomm
and others explored the retail experience looking at where a consumer is in
the store, knowing their preferences, and using that data to help understand
store traffic and user engagement. Following on the retail theme, David Skaff,
from The Science Project, agreed that it's a multi-year endeavor to get staff
and consumers up to speed. Participants like Sih Lee, senior vice president of
payments technology and innovation from Synchrony Financial believe that a
full engagement experience, plus the transactional one, will be successful. Scott
Amyx, of Amyx McKinsey said that new technologies including beacons, better
I T I S I N N O VAT I O N

http://www.CreditCards.com https://www.media.mit.edu/research/highlights/media-lab-digital-currency-initiative https://www.media.mit.edu/research/highlights/media-lab-digital-currency-initiative

i3 - March/April 2016

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