Digital Money

Still going strong after 14 years

The 14th annual Consult Hyperion Digital Money Forum was terrific. Here's some of the feedback we've already had:

• “Excellent! Thank you again”
• “A most enjoyable event with a variety of speakers”
• "It was very stimulating"
• "A very informative conference which didn’t disappoint."
• “Very good – as always, so much new stuff"
• "a terrific #dmf14 session on private vs public money"
• "I saw the future, the past and, surprisingly, the freedom of cash.”
• “Very good – as always, so much new stuff!”

First of all, and I can't say this often enough, a very big thank you to the event sponsors who made it all possible: Visa Europe and Monitise. For an event like the Forum it's really important to have sponsors who share our goals, and both of them were great, giving us the freedom to choose an eclectic mix of speakers and panelist who really helped the delegates (and us) to think in some new ways and to spark off new ideas about where to go next in the world of e-payments. This makes for a special event, unlike the commercial conferences that we attend throughout the year. The economist Diane Coyle, who was kind enough to chair the keynote session on day two, put it very nicely

As ever the Digital Money Forum proved itself a must for anyone interested in the intersection of technology and money

[From The Enlightened Economist :: Good money, digital or analogue]

And thanks also to our newest supporters, Olswang, who kindly sponsored to pub quiz (which was great fun) and the drinks that went with it.

I won't go over everything that was discussed -- the presentations are online if you want to download them -- but I will highlight a couple of points that emerged over the two days. First of all, both of the opening sessions, which mixed history and future, worked very well and did, I think, help people to think more imaginatively about the discussions later in the day. The expert panels were popular as always, although I really should keep them to only four people per panel. I've had some interesting feedback about the panel on alternative currencies, which I think gave many organisations some unexpected directions to explore.

Mobile was, naturally, a key topic and pervaded many of the discussions. We may have to make it a bigger fraction of the agenda next year if we can find some new angles to approach it from. A lot of the delegates remarked on how juxtaposing lessons being learned in both developed and developing markets worked well, so that's something to think about.

We've already started thinking about 15th Digital Money Forum and what we're going to do to change things again. I can promise all of you that the event will keep moving forward. Next year will see a new venue (and, yes, there will be free wifi for all), some new ideas for interaction and some changes in the programme structure. One thing that won't change is the art and design competition: given the outstanding presentations at the end of this years' Forum, we'll definitely do that again! If you weren't there, I urge you to take a look at the competition winners and appreciate the imagination and invention that went into them.

If I had to highlight one presentation, it was Catherine Eagleton's keynote. Catherine is the curator of Modern Money at the British Museum and co-author of the excellent Money-A History. She asked the delegates to send her examples of anything that should be preserved, particularly the intermediate forms of new payment systems that are forgotten in the long run. I hope some of them will take her up on that. But she also mentioned in passing how difficult it is to think of ways to preserve World of Warcraft gold pieces or Facebook credits for posterity, and I keep thinking about it now. It came up last year when Consult Hyperion were asked to provide a piece on mobile money for the Science Museum. We were enthusiastic, but soon realised that a phone in a glass case (with a dead battery) is not much of an exhibition, and I'm afraid the curators concurred. So if anyone has any ideas on that one, please get in touch (although it does give me an idea for next year's competition!).

Oh, and I should finish by saying to everyone who mentioned it (and there were quite a few), yes, the hotel coffee was slop that I wouldn't have fed to pigs and I swear with my hand on my heart that if we ever serve stuff like that to you again I will personally take all delegates to the nearest Caffe Nero and buy every single one of them a drink there myself.

Join us at the International Payments Summit on 21st March in London

I really enjoyed the annual International Payments Summit last year, so this year we decided to work with them on a small experiment. On 21st March we've helped to put together a 1-day summit on the future of e-transactions, called (somewhat provocatively, I must confess) "cash is dead".

The idea is to discuss the world of digital transactions (which, of course, in our world means digital money and digital identity) to help organisations who are putting together strategies make some realistic decisions about where future competitive advantage may lay. Naturally, reflecting my own prejudices, there will be plenty of discussion about opportunities for financial services organisations to either provide or exploit the coming range of digital identity services.

As organisers, Consult Hyperion have a couple of complimentary delegate places to give away, so if you plan to be in London on 21st March 2011 and you'd like to come along to the Lancaster London and join in the discussion, please e-mail me ASAP and I will arrange. Don't pass up this offer as we have a great bunch of people coming along for panels, discussions and networking, see you there.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

Raising the Bar

[Dave Birch] I thoroughly enjoyed the first two BarCampBank "unconferences" in London in 2008 and 2009. So much so that I have persuaded my colleagues at Consult Hyperion to support a third which is very kindly being hosted by PayPal UK at their offices in Richmond, west London, on Saturday 30th January 2010. I know that persuading people to travel to the far reaches of Greater London on a Saturday might be difficult, but let me tell you why I'll be going.

James Gardner is absolutely correct that the lack of a set agenda is the power of the BarCamp format

[From Digital Money Forum: BarCampBank "near money"]

The agenda is set on the day by the people who come along. Personally, I'll be interested in discussions about decentralised finance (community credit, local currency and so forth) as well as the innovative use of new technology to provide services via mobile devices, but my experience of the previous BarCampBanks was that I found myself sitting in on discussions I had no idea I would be interested in, and I'm looking forward to the same this year. I'm shameless about my motivation: our customers expect us to come up with new ideas, and one excellent way to obtain new ideas is by cross-pollination between sectors, products, services and strategies. The BarCampBank is, frankly, an easy way to do this. So if you have ideas about the future of financial services, thought on the changing role of the financial services sector or you just want to kick some ideas around with some different people, I look forward to meeting you there.

banking and finance, innovation, social and community

For all you utter bankers

[Dave Birch] Wow, that was excellent fun. Nothing really to do with electronic payments, but I've been playing a fantastic new card game called "Crunch: The Game for Utter Bankers" with the kids and some friends.

Crunch is a satirical card game for 2 to 4 players that places you at the head of the boardroom as a CEO of a global bank juggling the conflicting demands of your ailing bank and your future retirement fund. An average game sees you bribing your way out of government investigations, fending off aggressive takeovers and forcing debt onto the unsuspecting public. Meanwhile, reward your hard work by taking inappropriate bonuses and - when no one's looking - brazenly embezzling your bank's own funds and hiding them about your person.

[From Crunch - the game for utter bankers | BoardGameGeek | BoardGameGeek]

The game served a dual purpose, both of which left me delighted with it. First of all, it was fun to play. Basically, you build up your bank's lending against assets (ranging from shares in listed companies to Nazi gold) and then when a crunch comes you trade in trust for government bailouts. It didn't take long to learn, and both the kids and adults enjoyed it. It had an unexpected second purpose, though. I bought it for fun, but in playing it the kids asked a lot of questions about the credit crunch, about the relationship between assets and debt, and about the idea of deliberately growing your workforce and assets to become too big to fail (adding "workforce" cards also gains you "trust" cards).

Run, don't walk, to your nearest games shop -- I got mine from Playin' Games in Museum Street opposite the British Museum -- and pick up a copy of this super game.

Federal Trade Commission disclosure. I have no affiliation with Terrorbull Games, the creators of "Crunch", and have received no payments nor any other form of remuneration related to this endorsement. No animals were harmed during the writing of this blog post.

banking and finance, prize

Bear market

[Dave Birch] Russia is looking like a pretty interesting market for e-payments. The management consultants keep telling us to focus on the BRIC (Brazil, Russia, India and China) for our next growth markets, but it's important to understand that their mass, retail, e-payment markets are just not going to be like ours, partly because of industry structures, partly because of government direction and partly because of the technology starting point.

Russian central authorities are reportedly considering plans to set up an electronic payments network... The main objective of the prospective electronic payment system would be to challenge the dominance of established brands such as MasterCard and Visa, which currently hold around 85 percent of the Russian cards market. The plans for a Russian-operated electronic payment network come after in June 2008, Russia’s two largest banks – Sberbank and VTB Group – have teamed up to create the United Russian Payment System (URPS).

[From The Paypers. Insights in payments.]

What might the Russian "third scheme" look like, compared to a European "third scheme" (eg, PayFair)? Well, one reasonable prediction might be that the lack of infrastructure in Russia (Russia is a very big place) means that their third scheme might well jump ahead of the European third scheme in terms of its technology platform. Indeed, there are already strong indications that mobile and contactless technologies will be moving ahead quite quickly in that environment.

The head of Russia's largest bank briefed the country's President Dmitry Medvedev on the concept of mobile contactless payments last week — and explained that he is looking to launch a non-contact mobile payments system by 2011/12.

[From Russia looks to introduce mobile contactless in two to three years • Near Field Communications World]

A national contactless purse (perhaps a bit like NETS in Singapore or Touch n'Go in Malaysia) in a country the size of Russia would be a really interesting development. Singapore has shown that some judicious government steering can help to migrate to a contactless environment that is convenient for consumers who will...

...now have two payment cards to choose from to use on buses and trains, to pay for road tolls and carparks, and to make purchases from stores, eateries and entertainment outlets. On Friday, Nets (the Network For Electronic Transfers) launched its long-awaited multi-purpose contactless card... EZ-Link launched a similar contactless multi-purpose card in January.

[From Nets, more uses than one]

Transit is the vanguard, as always, but the point here is that competition to provide interoperable e-purses is at least a good step forwards.

cash and cashlessness, contactless and nfc, debit cards, emerging markets, transit

Paris match

[Dave Birch] We still have a couple of places left for the (free) CSFI Roundtable discussion on "Innovation and the Internal Market" at the OECD in Paris on Friday. See the research fellowship invitation for all of the details.

banking and finance, innovation, SEPA and PSD

Spanish practice

[Dave Birch] Mobile payments are developing in some pretty interesting ways at the moment. While we tend to think of mobile payments as being some sort of replacement for our familiar plastic cards, this is only one part of the market. In some parts of the world, retail is not the focus, and mobile money transfer has become a serious business and it's already beginning to connect the developed and developing worlds. There's no doubt in my mind that this will be one of the most important uses of the technology, in terms of improving the lives of the most people: making it possible to move money around means inclusion and financial services where there were none before.

Vodafone, Safaricom and Western Union have announced that they will partner to pilot a cross-border Mobile Money Transfer (MMT) service between the U.K. and Kenya.

[From Payments News: Vodafone, Safaricom, Western Union Partner for Mobile Transfers - December 08, 2008]

So you can now use your mobile phone to send money from one country to another. That's not to say that retail payments are not participating in the mobile revolution. If you look at countries such as Japan and Korea -- which I stress are not templates for the rest of developed world, but we can see them as testbeds for certain technologies that will inevitable spread -- mobile payments are part of the mainstream. There, it's the mobile operators who have been driving change and, while using mobile proximity payments to buy cups of coffee have long since ceased to be novel in those markets, those operators are continuing to drive innovation. Oddly, given the focus in the press, one area where contactless payment technologies may have great impact is not in stores but on line.

SK Telecom subscribers, who can already use the "T-Cash" mobile payment system to pay for bus fares, grocery products and parking tickets, will now also be able to purchase goods and services from the Internet... Since launching the service earlier this year, SK Telecom said it gathered more than 200,000 users of T-Cash. The mobile wallets are used for paying bus, subway and taxi fares, buying items at 24-hour convenience stores, and paying for parking at a number of major facilities such as Seoul Station, Gimpo International Airport and Seoul World Cup Stadium. T-Cash will now be accepted as payment at 11th Street (www.11st.co.kr), an online retail and auction site operated by SK Telecom, and Cyworld (www.cyworld.com), the country's most popular social networking service, operated by SK Communications, the Internet unit of SK Telecom.

[From Mobile Payment Extended Online]

I wrote, four years ago, about Cyworld and its role in shaping next generation payments. In the Korean market, the Cyworld connection is particularly significant. So why isn't the activity and energy from the developing world and from Japan and Korea yet having any impact in the mass market in Europe or the US? Well, one clear reason is that it has taken a long time for the GSM world to sort out standards and put the development of handsets on a firm roadmap. And although the standards have firmed up (in fact the GSMA got the standards it wanted) there's still only a couple of handsets out there. A few months ago, the GSMA called for NFC to be delivered in to the mass market, well, round about now.

The GSMA, the global trade group for the mobile industry, today called for full NFC functionality -- including the standardised 'Single Wire Protocol' interface -- to be built into commercially available mobile handsets from mid-2009, in order to ensure that consumers can reap the benefits of mobile payment services as soon as possible.

[From GSMA Calls for Pay-Buy-Mobile Handsets]

It's taken a lot longer for NFC to get near the mass market than many of us thought when the first experiments began four or five years ago. But it does at least seem that it's now practical to begin thinking about the new businesses that will emerge when we combine the GSMA roadmap with the laboratory results from Asia and the game-changing business models from Africa. I'm getting more enthusiastic about NFC as the days go by.

Free!

[Dave Birch] Well, now I've got your attention here's a quick reminder that next week is the 12th annual Digital Money Forum and we still have a few places left. They're not free, but they're well worth the almost insignificant delegate fee considering the incredible range of expertise and experience on offer. You can view the full agenda online over at the Digital Money Forum or you can download it here (248.3K). The Forum is now in its twelfth year, and once again promises the combination of discussion and debate, learning and fun, that has earned it the reputation as the place to be for people interested in the future of retail electronic payments. It continues to be a unique event, where interaction and invention replace product announcements and “death by Powerpoint” sales pitches.   As you may know, this is a not-for-profit event that supports a variety of charities. This year we are supporting BUFFER (which provides specialist diagnostic equipment for breast cancer), Action Medical Research and Jubilee Action which helps children worldwide. This years Forum is made possible by the kindness of our sponsors Visa Europe, Monetise, WebMoney and VoicePay with support from our charity tournament sponsor ACI Worldwide.

Some come and join our experts from the World Bank, Financial Services Authority, The Economist, European Payments Council, Transport for London, Nationwide, Barclays, Royal Bank of Scotland, Sidley & Austin, O2, The Guardian, Innovaro, Masabi, EAT, ABI, Finextra, Disruptive Analysis and the Free University of Brussels at the 12th annual Digital Money Forum in London on 31st March and 1st April at the Guoman Charing Cross hotel and come away with the kinds of new concepts, new friends and new business ideas that many of you have come to expect from this unique event. All delegates will receive a copy of our popular Digital Money Blook (the most interesting posts from this blog over the last year) and Larry H. White's "Free Banking in Britain" along with "The Nudge Factor".

Thanks for reading that. Now for the details of two terrific -- and absolutely FREE -- events on Monday 30th March in London. If you are interested in the future of electronic payments, you have the opportunity the spend a relaxing lunchtime and afternoon in the company of an assembly experts rare on these shores.

future, innovation, money

Prime directive

[Dave Birch] Thanks to the generosity of our sponsor, the StoLPan project, Consult Hyperion and city lawyers Sidley Austin will be running an free afternoon seminar on the Payment Services Directive (PSD) at the Guoman Charing Cross Hotel in London on 30th March 2009.

The seminar will comprise three sessions:

• An overview of the PSD by William Long from Sidley Austin
• National implementations in members states by William Long from Sidley Austin, and then after tea
• A roundtable discussion (led by me) on the business impact featuring a couple of companies in the field.

Some observers think that for banks, the PSD represents cost with little benefit, but for some non-banks, the PSD represents an opportunity to get into the payment business. Why not come along and make up your own mind by discussing the directive with other experts in the field?

SEPA and PSD

In a goldmine, the medium of exchange is the pickaxe

[Dave Birch] The title of this post comes from a book that I'm reading at the moment. No, not a scholarly treatise on the nature of money or the history of transactional commerce, but "Making Money", the latest of the Terry Pratchett Discworld novels. I can't say I'm a particular fan of Pratchett, but it is easy to read and it potters along at sufficient pace to make it a tolerable diversion. I read a couple of the Discworld books many years ago and found them mildly amusing in places but not compelling. I realise I'm risking opprobrium by advertising my indifference, since Terry's fans are legion and dedicated, but there you go: it should not put you off reading the book. I was the only person in Britain who didn't like the Harry Potter books either, but who am I against so many? No. 1 son, on the other hand, rather likes the Discworld series so it seemed only fair to allow him to present an alternative opinion, to whit:

I think that the discworld novels are very good because they are well written with a lot of imagination and are very funny. One of my favorite parts of ‘the light fantastic’ is when he describes the great a’tuin ( the giant turtle on which discworld rests ) as very intelligent, and as the humans found it easy to read it’s mind, they also took ages to get information, because, although smart, with neurons the size of roads, thought would generally be quite slow. This was one of the funniest parts of the book, in my opinion. One of the parts with the most imagination was when Pratchett described one witch, because he noted that she had two bodies- she was not two people, just one person with an extra body. I thought that this was extremely clever.

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