“D” is for Disruption and Payment Innovations, Too

The evolution of the payments industry was the centerpiece of PYMNTS’ Innovation Project 2016, a thought leadership event attracting industry leaders to talk about the future of payments solutions, platforms, and devices. Peter Diamandis, CEO of Singularity University and Chairman of the XPrize’s challenge, tackled all of this and more in his keynote speech, The Three ‘Ds’ Of Payments Innovation.

Prepare for Imminent (and Exponential) Disruption

To set the stage for his commentary, let’s acknowledge that technology is driving rapid change in retail—and naturally, this extends to include payments and financial services.

Diamandis cautions, “If you don’t disrupt yourself someone else will.” Companies can’t get too comfortable with the status quo. All it takes is a seemingly minor player today—an agile new market entrant with a better way to meet peoples’ needs, for instance—to change everything as soon as tomorrow.

Read Payments Innovations Set to Disrupt the Banking Industry for insights into consumer-driven changes in the financial services marketplace.

Diamandis contends that owing to the exponential nature of modern tech growth, whatever becomes digitized eventually goes through deceptive and disruptive growth, and then dematerializes, demonetizes and democratizes industries. Let’s take a closer look at what this means:

• Dematerializes – this is the shrinking of technology and the consolidation of features and functions into a single device. The smartphone of today is actually at once a telephone, typewriter, calculator, and more.

• Demonetized – once products and services are dematerialized, they’re essentially commoditized. For example, Craigslist put classifieds ads online, taking money out of newspapers’ pockets.

• Democratized – once demonetized, products and services “belong” to the people, skyrocketing the potential for online commerce and financial services.

This phenomenon is at the heart of why industry decision-makers of today need stay on their toes if they intend to stay relevant and competitive. Companies should focus on the value they bring to their customers and what they’re in the business to help people achieve, rather than merely sticking to whatever product or service happens to be their current cash cow.

The fact is that tomorrow, their product or service, however beautifully crafted or functional, may no longer meet consumers’ needs; by tomorrow, a competitor may be offering a better way to get from point A to point B, or even to point C. If leaders are not looking out for what’s next—or at least anticipating who’s coming around the next corner—they might miss opportunities to thrive in the rapidly changing marketplace and serve the customers of the future.