New Payment Systems for Consumers: The Value and the Pitfalls
Updated: Apr 5, 2018
Bitcoin mania is only the most recent in a series of flamboyant market responses to many new payment systems made possible by digital technology. Cryptocurrencies, which offer investors the opportunity to “disrupt,” i.e., own a piece, of what historically has been a government monopoly, are making the biggest splash. Less ambitious payment services, such as Venmo, which don’t create currencies but simply exchange them more easily, also are receiving a lot of attention.
Lost amid the frenzy is a simple but fairly important question: what do the users of currencies and payment systems (people, in other words) actually want from them?
Scansion has conducted a series of explorations over the years to address this, and we can share a few things about what people truly want from payment systems, be they currencies or payment services.
What people truly want from payment systems:
1. For many people, holding physical currency in their hands is a thrill that they don’t want to lose. Don’t get too attached to the idea of a completely cashless society. People still love cash.
2. For other people, physical currency almost demands that they part with it. To avoid this, they avoid physical currency. The constraints built into some payment systems are seen as major benefits.
3. For yet others, the key to “responsible” use of payment systems is to avoid using any of them, whenever possible. For these folks, the best payment system makes it easy to accumulate cash, and somewhat difficult to part with it.
4. Finally, other people love the ease of use of friction-free transaction services, and can easily see themselves using multiple currencies, picking and choosing based on the unique attributes of each.
We have a situation in which the public simultaneously wants four kinds of experiences from payment systems– thrills, sober responsibility, ease, and restraint– that clearly don’t align very well.
And, perhaps not surprisingly, the new payment systems all have one thing in common: they facilitate thrill and ease, just one-half of the experiential equation.
With consumer confidence rising in the last year, and memories of the suffering millions endured from the financial meltdown 10 years ago slowly fading, it’ll be fascinating to see how the balance between responsibility and pleasure evolves. For now though, developers of new payment systems and services may be in for a rougher adoption process than simple business logic– and market mania for the next big thing– is telling them.
Best Practices When Developing A New Payment System or Service
To make this a bit easier, we see a few best practices suggested by our work. When developing a new payment system or service, consider asking yourself:
How can this offering enhance people’s sense of being responsible stewards of their money, in addition to everything else our offering does?
How can we create a balance allowing for both a sense of greater competence at money management, and greater convenience when engaged in transactions?
How can this service seamlessly interact with other payment services so that the combination facilitates people’s sense of balance between enjoyment and competence?