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Sorting reality from Here are two striking comments I heard at the show:

hype in payments' • "We are entering the fourth industrial revolution."
The two major themes will be AI-enabled personal-
ization of payments and enhanced buyer experiences
new era • "About every 25 years, business and technologi-
that leverage improvements in devices.

cal infrastructure come together to create an expo-
nential change in the way we work." Over the last
60 years, we saw this with Moore's Law (processing
speed doubles every 18 months), which led to a surge
in computing power, and then with Metcalfe's Law,
which says that the value of the network is the square
of all nodes on the network, which led to things like
Facebook. Now, the prediction is that AI will lead to
"exponential learning." This will enable people and
businesses to search more data than ever before and
hence increase productivity.
A changing business model

One thing is clear: the old ISO business model is changing.
By Brandes Elitch ISOs need to adapt to these changes to survive and
CrossCheck Inc. prosper. The ground is shifting under their feet. ISOs and
processors are making good money right now, portfolios
nergy and excitement abound in the payments are selling for 24 to 30 times book, and acquirers are being
space today. It's difficult for even a seasoned acquired themselves at a rapid pace. The status quo is very
good for all of us.
participant to keep track of developments or
E separate hype from reality. Some particularly But most of us in the acquiring industry are still doing
hot topics include artificial intelligence/augmented intelli-
gence (AI), machine learning/deep learning, shared ledgers business the same way we have for the last 20 years. That
calls for a reality check. Most merchant level salespeople
such as blockchain, cryptocurrencies/digital currencies/
virtual currencies, real-time payments, and open banking. are still using the same tired approach: Give me three
months statements and I will beat your rate. Today, this is
the path to failure.
Other compelling issues are addressed in these questions:
• Can Amazon deliver the next generation of financial Some of you know I am a car collector and automotive
services? historian. There are some important lessons about change
• How will QR codes change e-commerce? and complacency to be learned from a recent study of
General Motors when it was at the height of its powers (in
• How will connected cars create connected payments? 1972 it was the largest company in the world). Professor
• When will consumers finally embrace mobile pay- James O'Toole at the USC Marshall School of Business
ments? conducted the research, and the findings are relevant for
• Is the fintech revolution dead? all of us.
• How will connected screens revolutionize payments? What not to do
• What impact will biometrics and wearables have on The following examples from the study exemplify how GM
payments? executives thought back then:
• Is there a case for tokenization beyond payments? • GM is in the business of making money, not cars.
• When will banks figure out how to sell and monetize • Success does not come from technology; it comes
real-time payments? from adopting successful technology developed by
other people.
These, and many other subjects, were discussed at
Transact, the ETA's annual conference held in Las Vegas in • Energy will always be cheap and abundant.
April 2018. This is a premier conference and tradeshow for • The U.S. public is not interested in consumer, envi-
the merchant acquiring industry. There were about 4,000 ronmental and social concerns.
attendees, 200 exhibitors in the tradeshow area, plus about • Styling and looks are more important than quality to
120 speakers in the educational sessions. consumers.

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