Change: We're All For It....As Long As It's Familar!

My son, who is doing Masters work at the Johns Hopkins SAIS School, alerted me to a Brookings Institute forum this week on the "Future of Consumer Payments: a Discussion on Business and Public Policy" (www.brookings.edu/events/2008/0916 comsumer.aspx). Some really smart people were scheduled to speak including Ken Chenault of American Express, Dick Schmalensee of the Sloan Institute and Vijay D’Silva of McKinsey. I would have loved to attend and hear these and other speakers comment on what they see as 'the future' for our industry.

More provacativley, however, I was reminded of how many of these types of forums I've attended over the years seldom include the real game changing agents. Somehow, the Elon Musk's of the industry, who built a huge consumer data base of online transactors by offerring ‘free online checking’ via x.com using what at the time seemed like obscene amounts VC money, don't get the invitation to share their visions. They're just too scary and represent too much change to be included in the intelectual excercise.

Musk wasn't a banking maverick; he was just a maverick who believed he had a better idea about moving value between two parties. If you don't know the story, Musk went on to convert this huge new community of consumers into the world of PayPal, today the single largest global base of monetary transfer. As PayPal came on stream, the traditional networks (Amex, Visa, etc) and their constiuent institutions comforted themselves by repeating “Its only auctions, its only auctions” without acknowleging the true reality of PayPal's ability to seriously change the rules of the game down the road. If, or perhaps more aptly when, PayPal decides to "go retail" it could well represent a massive C-change in the retail payments landscape and potentially shift the control of payments question back toward the payee.

In the end, Chenault and company are admitedly smart guys. But, its also in their personal self interest to not change too much or too fast. Otherwise, they risk disenfranchising themselves and their networks. We all like change, if its something we’re familiar with!