Looking beyond our successful hackathon, Money20/20 was quite interesting as, for once, all of the major players in the industry were gathered under one roof. Here are my main takeaways:
Tokenization is hot! Apple Pay was of course on everybody’s mind, but people were already thinking ahead. While the technology has been around for a while, Apple finally managed to productize it and advertise it to the masses. It’s going to be much easier now to build new tokenization products. This is very timely as we have been working on an open-source tokenizer, more on that very soon…
Bitcoin, while being the cool kid on the block, hasn’t started to make a dent in the whole financial industry. At the hackathon, a third of the projects were Bitcoin related (I counted 20 Chain.com projects and 23 Blockchain.info ones, and there were around 120 teams). For those among us who have been in the industry for a while, this makes perfect sense: as a 16 year old, why bother integrating with a legacy and crufty SOAP API, when you can play with Go and distributed systems? That being said, the legacy giants (PayPal, MasterCard, etc.) are fully aware of it and have been working on opening-up and modernizing their infrastructure. And while the rest of the conference featured a few Bitcoin companies, hardly any of the hallway and late party discussions involved crypto-currencies. I feel the technology (i.e. bitcoind, the reference implementation) needs to mature and prove it can scale before it is seen as a serious player in the industry.
There is space for open-source payments. Telling the Kill Bill story to the major players (FirstData, TSYS, Heartland, etc.) definitely sparked some interest. There are already countless payment gateway solutions for ISOs and Agents (1stPayGateway, Intrix, iTransact, etc.), but all take pride in their proprietary codebase, and how each of them can provide competitive advantages. Truth being told, most of them actually offer the same features: multiple payment processors support, tokenization, Hosted Payment Pages, Shopping Carts integrations, etc. We took a different approach with Kill Bill: as the only open-source gateway, it not only supports these basic features, but can also integrate with any player in the industry (we demonstrated in our hackathon that the Feedzai integration took less than 24 hours), while still being a platform you can build upon: an ISO using Kill Bill can write proprietary plugins, which truly become unique to that ISO.
Finally, my main takeaway is how complex the space has become. While we always had ISOs, payment processors and gateways, these definitions become more and more blurry as companies consolidate. The recent Vantiv acquisitions are a clear example: the major merchant processor bought Litle & Co. (e-commerce payment processor), Element Payment Services Inc. (ISO) and Mercury Payment Systems (Integrated payments provider). Everybody is trying to get a piece of the payments pie, even the Associations (Ryan McInerney from Visa announced that the network will become more and more open).
And as a matter of fact, because of how complicated the payments world has become, we decided to start a white paper explaining the current state of the industry. If you’d like to help reviewing it, drop us a note!