Ahead of one of the financial service industry’s biggest annual events, we sat down with Endava consultant Nick Telford-Reed, to pick his brain about what he thinks of the Money2020 agenda, what he has learned over his career and what advice he would have had for his younger self.
Nick is a passionate and award-winning technology innovator who has a strong focus on ensuring great customer experience. For close to two decades, he has worked to develop compelling visions of the future, to build strategies to help businesses achieve their goals. He is currently working with the World Wide Web Consortium, leading a global initiative to develop a common standard for making and taking payments over the open web, alongside stakeholders including Google, Microsoft, Apple, Facebook, Alibaba, Visa and Mastercard.
1. Ahead of Money2020 in Vegas, what are you most looking forward to hearing about?
The two key themes that I think are emerging ahead of Money2020 in Las Vegas are the rising importance of real-time bank to bank payments (direct credit transfers), and the continued debate about "invisible payments", including how much friction is needed in a good payment experience to provide both ease of use but also the right level of consent.
To be honest, I've been pretty sceptical about bank-to-bank push payments, but I'm seeing huge momentum out of China and Southeast Asia and it's really interesting when you consider how much enthusiasm seems to be building in North America.
But the truth is that when it comes to Money2020, I’m most looking forward to all the unexpected bits: the impromptu meeting with an old friend, the debut or hint of a new product on display on a stand, the presentation you walked into by mistake but end up really enjoying. It's like a massive mosh pit of payments professionals, except that the music is a bit quieter, and the drinks are more expensive.
2. Anything you were expecting to see on the agenda that’s missing?
It's clear that a dose of reality has been applied to the domain of cryptocurrencies and distributed ledgers. A couple of years ago, that's all there was to talk about, and although there's still a lot of buzz, I think a lot of people are now looking for a large-scale implementation that does something significantly better than the existing tech - a kind of "blockchain supremacy" moment - similar to Google’s recent quantum computing feat - before things really kick off again.
Looking at the Agenda, it looks like there's less presence from Google, Apple, Facebook and Amazon this year, though Google continues to push hard on payments in its browser, Chrome, Apple have obviously launched their card, and Facebook made a big splash with Libra. Maybe I'm just not invited to the right kind of Money2020 parties...
3. 18 years in the payments industry, what have been your career highlights?
The world of payments has changed enormously in the last twenty years. The balance has completely shifted to online, I think the pre-eminence of the major schemes is being challenged like never before, and the pace of change has accelerated from slow and steady (think how long contactless took to embed itself) to breakneck (crypto start-ups everywhere, the xPays, WeChat and Alipay), but the biggest change is how sexy payments is now. When I first started, payments were a kind of necessary back-office capability that banks offered their business customers. Now, Stripe, Square and Adyen are genuine rock star unicorns and payments processors are worth billions of dollars.
Personally, I'd highlight three things as major highlights in my career.
The first is moving Worldpay's payment gateway out of RBS and into its own data centre after the sale in 2010. It was a pretty small team that lifted the gateway out of the shared RBS infrastructure, changed to a new database vendor, engineered the capability to build and run the system, and then migrated all the customers. There were some bumpy moments, but being part of that team, living through all the challenges, and coming out the other side with a stable, fast, robust gateway that could stand on its own two feet, was a real highlight.
The second would be leading a team that won an industry award for launching the world's first truly "downloadable" terminal - a software application that turned android phones into completely capable contactless payment terminals. The challenge was combining the novel technical architecture to manage the security of the data on a vanilla phone with the compliance challenges of doing something that existing tests and certification processes had never anticipated. We had a pretty small, determined team, who showed unbelievable perseverance and ingenuity, so when the product finally went live and was featured in the media around the world, that was a hugely enjoyable moment.
Lastly, I'd say the work that's happening right now at the World Wide Web Consortium, on building a common standard for making payments on the web (https://github.com/w3c/webpayments/wiki) is a real peak. We just met recently in Japan and saw some amazing demos of payment experiences that move with a consumer as they navigate across platforms - because your browser is common in your online experience. We've got Apple, Google, Microsoft, Mozilla, Visa, Mastercard, Amex, Stripe, Klarna, AirBnB and Shopify all involved. If we can pull it off and get a common mechanism for paying online - that would be amazing.
4. If you could go back 18 years, what would be the career advice you’d tell your younger self?
I think the more relevant question would be whether my younger self would listen to any advice that he might get from this guy! My life's changed pretty substantially since then - kids, weight gain, hair loss. Perhaps I could tell him that the capability of the phone is his pocket is going to accelerate beyond his wildest imagination to become the focal point of most people’s digital life, so watch out for mobile payments a bit earlier, know that 3DS would get better, and to invest in a couple of start-ups called Stripe and Square! It's interesting, because 18 years ago, I don't think I would have thought much about payments at all. Now I ask waiting staff about the model number of their mobile POS, and spend hours reading PSD2 drafts, and as a payments nerd, I wouldn't change that for the world.
5. We’ve looked back, now let’s focus on the future – what do you think are going to be the top challenges and opportunities facing the payments industry over the next 18 months?
I think that the fragmented approach to authentication that we're seeing in Europe as a result of PSD2 is the biggest challenge locally. Some authorities have pushed back deadlines, others have not, and consumers and merchants will be confused about what they should be doing. The bottom line is that everyone selling something online in Europe needs to have a strong authentication journey ready for their customers as soon as possible, and to make that journey as smooth and easy to understand as they can. But there's no doubt that there will be additional friction in the process, and we might see a reduction in growth rates for ecommerce in our region. I hope not.
More generally, getting this balance of friction and consent for consumers paying for things is a challenge that exists all over the world. Merchants want things to be frictionless, payers want things to be frictionless *until they don't*. Regulators haven't really worked out yet that ensuring that an appropriate level of consent has been given by consumers for a payment to occur is a hard problem to solve, and it becomes increasingly important as more payments go "invisible". There will be circumstances when it's critical to make sure that the consumer has made an explicit decision to pay, and that decision can't be just taken away by providers trying to minimise drop-out in their sales funnel.
6. Your team won Best Mobile Payment Initiative at the Cards and Payments Awards in 2018 – what were the key learnings for you in terms of driving the launch of this, and how you led the team?
Launching our downloadable terminal was a brilliant, tangible outcome from the innovation process that we built, but the critical lesson was that sometimes you've got to be relentless - we presented the idea (at various stages) 11 times to our innovation council, making sure that we kept things moving forward every time. It would have been much easier to pivot to something simpler and less challenging to the status quo. It's also worth noting how much more resource-hungry each stage of the process was: if mocking up the idea cost 1 units, getting a working prototype cost 10, getting the security-hardened prototype ready cost 100 units, and getting into full production cost a thousand. If you plan for things to get an order of magnitude harder/costlier each stage you advance, you'll probably be not too far out.
Underlying all of this, though, it's that it's human beings that make things happen, and human relationships that enable those people to do their jobs. I wish I'd learned that lesson earlier in life - that in the end, friendships and favours are more important than plans and technology.
7. Finally, you’re now a consultant to Endava – firstly, why Endava and what are you looking to achieve in the role?
I first started working with Endava 7 years ago as a strategic partner who were brought in to help take our development process agile. What I really enjoyed about working with Endava then was how great the engineers were at challenging me and my teams to make sure that everyone really understood what it was that the business was trying to build, and why. This was in stark contrast to what we had come to expect from more passive outsourcing firms – the Endava engineers we were working with were really engaged in understanding and building the best products that they could for our customers.
That challenge culture and honest, open dialogue is at the centre of what I hoped to offer when I set up my consultancy, and now I hope to bring that same benefit to Endava as a member of their Advisory Board, and Endava's customers as a consultant. Together we will work to expand the Endava payments proposition and work with new and existing clients to explore and discuss their opportunities and threats, and face into them, so that we can build the best products that we can for users.
ConsultantNick is a passionate and award-winning technology innovator who has a strong focus on ensuring great customer experience. For close to two decades, he has worked to develop compelling visions of the future, to build strategies to help businesses achieve their goals. When he isn’t consulting, Nick can be found spending hours reading PSD2 drafts, asking waiting staff about the model number of their mobile POS, mountaineering, planning his next travel adventure or running around after his four kids.
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