Podcast

Podcast tackles pros and cons of cashless society

Host Will Hernandez, editor of Mobile Payments Today, talks with Ankit Kumar from Gemalto about the ramifications — both positive and negative — of a cashless society.

September 14, 2018

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Transcript

Intro & News

I'm in Chicago right now for the Bank Customer Experience Summit. We are already 10 episodes into the podcast and as I mentioned before, this was something that was a long time coming probably about three years, but sometimes it takes having the right people in place to make it happen. 

So shout out to John Vinson Page Hobbs and Brittany Warren down at our world headquarters in Louisville for making something like this happen. Meantime, news is a bit slow because I think companies at the moment are holding off on any big news Money 20/20 next month. And this is something that happens every year. A lot of payments companies wait until everyone, media included is assembled in Vegas for this thing. And then we get hit with an avalanche of news and the four days that we're there. And it's very overwhelming. But it can also be fun at times as well. 

So in lieu of the news this week, I wanted to give you an observation slash rant on something that came to mind while I was sitting in the rain Sunday at Metlife Stadium watching the Giants lose their home opener to the Jaguars and it's something that plays into our guests and conversation for this week's episode. So for all the talk about cashless societies, we still have the vendors accepting only cash payments and the thing that boggles my mind is that it happens at stadiums that have huge advertising agreements with companies like Visa and First Data. And a company like First Data has a big agreement with the Mets in New York City. There's a lot of First Data signage throughout the city field where the Mets play. The Mets actually a couple of years ago, renamed their primary Spring Training stadium First Data Field. And every food stand at Citi field actually does have a POS. 

But the vendors still only take cash. And I'm often left wondering why is that the case? You would think you would want these vendors carrying around less cash on them. Now? I'm not sure if there's some logistical reason why. Then there's our cash only, but when I'm at a Mets game giants game or a New York City football club game like I was on Saturday, it's a noticeable thing for me. I wonder how much more money a team can make in concession sales if carry some kind of mobile POS. Now when you're sitting in the club seats in some stadiums, the servers have a way to capture orders on a mobile device of some sort. Where usually with those club seats, your food is already included in the price you pay for the ticket. At least I know that's the case at a place like Yankee stadium. 

Yes, I'm a Mets fan, but I do occasionally go to Yankee games. That's what I get. Free tickets. So that was the situation, I don't. Anyway. When it comes to that scenario, all you have to do is put your order in the device and the food is delivered to your seat. I know some stadiums right now are experimenting, I should say with mobile food ordering at stadiums and that's a great thing. It's great to innovate and it's great to add this technology to the stadium experience, but I do think overall the mobile food vendor, which is what they are, it's a staple of the stadium experience. It's a staple of the arena experience and I think it's about time technology matches that experience and on that note, my guest this week is Ankit Kumar who is the marketing and business development manager at Gemalto.  Ankit and I get into a conversation about the cashless society, the security behind it and how smart cities are playing a role in the US. 

Q&A - Ankit Kumar - Gemalto

Will:  I am here with my guest this week, Ankit Kumar. He is in business development and the marketing manager specializing in digital payments and mobile financial services at Gemalto. Welcome to the show. Thanks for joining us this week.

Ankit: Thanks for having me, Will.

Will: This topic that we're about to dive into here is one that is constantly discussed these days and I'm talking about just the idea of this cashless society. I might not be a fan of it necessarily for a few reasons, but I think that it's something that is inevitable. Where do we stand on this idea in 2018 with the cashless society, particularly here in the US.

Ankit: Gaining momentum globally and this has to do with the fact that many of the developing countries are increasing the coverage of population to reach have a backyard now. But in addition to that, the other factors like a introduction of PSD2 in Europe, there are a lot of innovative solutions being pushed into market and with all sorts of digital wallets coming in. 

You see a launch of digital wallet into the market and these kind of volatile trying to solve the acceptance problem to an extent. And if you look about, if you talk about us, most specifically, you know the volume of a castle transaction in yours is relatively high as compared to a global figures, but lately there has been an upward trend because more and more industry players are focusing on making it more convenient for the end user to use cashless channels by offering a smoother experience and in some cases also providing additional services like other head or access to a loyalty program. I'm quite optimistic.

Will: You're under the belief that we have a lot of stakeholders in this ecosystem. They're going to need to come together to make choices. Encouraging consumer uptake rather than retaining control of cashless payments. What exactly does that mean to you and to us in general in the industry and how do you think we're going to get there?

Ankit: Payment ecosystem banks in some cases even do a third party which are interacting with the consumer and certainly when the payment transaction is performed, not each of these fears are tied together with a common goal. That is to see more and more transaction go through in order to do that, stakeholders needs to ensure that is a frictionless experience for the consumer and then there's some sort of incentive for them to pick cashless or cash machines and bank can offer some kind of a reward program or some value added services as we spoke about in the previous question, as we see more and more increase of mobile commerce.

The important role of the device maker in offering payment services that works across the devices and last but not the least, everybody in the ecosystem has to make sure they've indicated security around the payment transaction. In an ideal world, the way I see a payment transaction should be as simple as possible for a user. Everything should work in the background.

Will: Let's talk about that security part there for a minute and I know that seems to be important going forward in this conversation. Are you seeing that now with the stakeholders?

Ankit: Yes, indeed, and in fact this is also supported by a regulatory framework which are coming into the marke. PSD2 is a very good example there which was a strong security standards for all the ecosystem players. This kind of case, the confidence to to end user to the consumer so that they can rely on these channels. You know, one of the biggest concern for consumer is the security. So if that is solved by the regulatory standards by the industry players, it's going to help bring a cashless transaction to have a higher volume.

Will: In terms of smart cities, and I know this is something that we hear talked about and discussed a lot these days, especially as more things become digital and I think that you're under the impression that these smart cities are going to play a role in the cashless conversion and how do you think that's going to happen right now? What are you, what do you see happening in that area with smart cities and cashless society? 

Ankit: Well, in my opinion, the two important factors that can be assisted by plus one is security. We just spoke about that smart cities can address a security concern of the consumer by putting in place some regulatory frame work for strong and robust security standards. This is going to foster confidence for consumer in the payment channels and again, PSD2 is a very good example here. A second factor is interoperability. We can look at China as an example here. Services like WeChat, AliPay are accepted by even the smallest street vendors. These kinds of services would definitely reduce consumer reliance on cash.

Will: In terms of actual smart cities. Right now I know Toronto is a city that comes up often in this discussion. Is that a good example? Are there other examples out there in terms of what cities are doing to make themselves a more digital and more smart per se?

Ankit: Yes. Globally. Some example from the Nordic countries, Norway, Sweden, Finland, all of these countries are moving very aggressive towards a cashless society. And what they're doing is, is really facilitating, the merchant, even the smallest one so that they can accept a cashless transaction as long as a consumer has a confidence that when they go out and do some transaction to the merchamt and then be able to survive without cash, this is really going to promote the culture or the cultural shift even in the consumer so that they can start to rely on digital channels more often than cash. And this is kind of going to break the habit. So smart cities have a very important role to play there to, you know, facilitate all the ecosystem players to make sure that it is supported everywhere and there's adequate security around it.

Will: I know we mentioned security being a factor with consumers. Do you think in general that consumers are ready to embrace this and that they are ready to embrace this idea of a cashless society? 

Ankit: Consumers are ready, but they're concerned really is on the security side of it. The regular consumer or layman does not really understand the security standard being put in place behind it. Let's say a government organization or a smart city comes and tells the consumer that, you know, I endorse this solution that this is secure enough for, you can use it for your financial transaction. If that kind of endorsement comes into the picture, then this is definitely going to increase the confidence of consumer into the payment tender. So that's where the smart cities has that have a very important role to play, to educate the consumer that the security is being put in place by the industry stakeholders and somehow to endorse it in a certified way. So that end to end user or consumer can access it.

Will: Well listen, thanks for taking the time this week to join us. I really appreciate it and I am sure that we will be talking about this topic are somewhere down the road. Thanks for joining. 

Ankit: Thank you, Will.

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