The changing nature of payments technology only serves to show the necessity for visibility of payments
If you start to research the world of automated payment systems, you will very rapidly start tripping over accreditations and memberships. The first pass verdict seems simple: you want to pick a supplier or an implementing consultant with a lot of history, visibility and reputation. Picking the opposite of all those things would be madness, wouldn’t it?
Not quite. Each simple statement has a flipside, a rationale for doing the opposite. For one thing, even allowing for the great age and spread of institutions like SWIFT, online payments and payment management are still a relatively youthful business sector. For another, entrepreneurs and start-ups have a playbook to consult on how to get seen, searched and indeed accredited, and waste no time in establishing the right sounding local associations and smart gatherings to be seen in.
History, too, has some problems, because payment implementations are no different from other IT projects when seen by an IT journalist, at least - nobody wants to talk about the valuable lessons learned during a failure. And the failures and risks within the online payment business are pretty much the worst kind, as SWIFT’s recent intense embarrassment about network security shows. Plus of course, if you are in a new sector you can’t have much history.
There are several answers to these dilemmas, though perhaps the most interesting one sounds like a cheat - the issue of being accredited and having visibility was a requirement coming from much older designs of payment system. E-commerce and partnering, where the management model was that someone could ask for your connection details and pretty much straight away be able to run up an order and hence, a payment instruction.
The rise of the API economy
These days, such an approach seems charmingly naive, even though it still persists in some sectors. There are other echoes of this approach, with the rise of the ‘API economy’, though this is more about the value of streamlined enquiries, than it is about taking action. Business-to-business conversations about what’s needed and whether it’s available are brokered by APIs, payments take a different path.
And it’s a convergent path - because while E-commerce waned, and APIs waxed, payment had its revolution courtesy of the consumer sector. Both Amazon and PayPal have established a contest for commercial payments of all types to be satisfied without credential exchanges, agreed procedures, deep technical handshaking between systems, or any of that fundamentally obstructive rigmarole.
The last piece of the picture is a bit of smart analysis for the payments manager. Having a single means of payment usable for a wide variety of purposes requires snappy and intelligent analysis of the transaction stream, and that’s been surprisingly slow in coming.
Rather like the way that e-commerce sent businesses to sleep, so banks own internal abilities to analyse client activity has been a brake on rolling that ability out so the customer can get a bit of transparency into the payments management process. This is something that needs to change.