Why The Future Of Payments Is Interoperable (Not Integrated)

By PYMNTS

When one person is thinking about sending an email to another, there are all kinds of things to think about: how long or short to make it; whether or not to include pictures; whether an emoji is cute or will make them look immature.

But what no one wonders about as they tap out an email on an iPhone is whether or not the receiver also has an iOS-enabled phone. No one ever pauses to ask — wait, should I check and make sure that their carrier network can receive messages sent from a Verizon phone?

Because, as Modo Payments CEO Bruce Parker explained to Karen Webster in a recent Topic TBD conversation, that would be just an incoherent question to ask — because the data is totally irrelevant to the sender and receiver.

“If I send you a message, there is all kinds of interoperability happening in the background that is moving the data from one network to another and one platform to another. We don’t really need to know each other’s choices on that — the message just goes through.”

But in the world of payments, Parker noted, that level of interoperability is still more a future tense experience than anything anybody is routinely taking advantage of today. Moving data — like an email — is more or less platform-blind at this point.  Moving money, on the other hand, is not.

“If I bring that back to payments, say I want to use a card product on a specific network. If the person I want to transact with isn’t on that network — they are not in a position to take my payment, and they are not going to be able to complete the transaction. When it comes to payments, what people want but often don’t have is the ability to initiate the transaction in one mode and have it show up in another mode without having to worry about what is happening in the middle to get it there.”

But for that ability to be usable, Parker told Webster, the ecosystem needs to change paradigms a bit. Right now, he said, payments is dominated by questions about integrations. What it should be focused on instead is how to make payments systems interoperable.

Read the full article here.

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