Our analog history seems so simple now.
For any given behavior in the analog era, you had a couple of options. For news, you had a choice between a couple of local rags. The Boston Herald or The Boston Globe? For TV, you had network channels, cable or recorded video played through physical media (VHS, DVD etc.).
To pay for something, you had plastic cards, cash or check.
If there is one thing that the information age has created, it is surface area. News can come from thousands of sources, all accessible with a few key strokes or swipes. Video is available everywhere you look in hundreds of different forms.
And payments now take many shapes.
Companies like Mastercard understand the concept of surface area. The biggest obstacle was adapting payments to work—safely and securely—from the analog options to the digital multitudes. This was accomplished with the advent of tokenization (creating digital tokens that are representations of plastic card numbers) and the creation of Mastercard Digital Enablement Services.
The next step was to weaponize MDES for the digital era, which Mastercard is attempting to do through its digital wallet Masterpass. The next step? Apply the lessons of MDES and Masterpass … everywhere.
“We have always said that the world of digital payments is exciting because of the new interaction model,” said James Anderson, executive vice president of digital payments at Mastercard. “That way that we can expand beyond our historical footprint of POS and websites.”
The Inevitable Horizontal Movement Of Payments
Thus we see announcements like Mastercard’s introduction of Masterpass into Facebook Messenger bots to make transactions for what is being called conversational commerce. Want to order groceries from a bot? Maybe make a Subway sandwich? Sure, those are easy bot activities. Want to get to the moment of truth where the consumer actually forks out money? There’s Mastercard.
“We think that this is an interface for commerce that certainly has legs and potential,” said Anderson. “But we are only going to realize that potential by doing stuff and getting out and seeing if it resonates with the consumer.”
But here’s the thing: the fact that Mastercard chose to enable bots as a sales channel is not really relevant. More or less, Mastercard is just covering its bases because there is a possibility that people actually do decide that bots are the next mass interaction model. Now that Mastercard has created the means for digital payments with tokens and MDES, the edge case options don’t really matter.
Make payments in virtual reality? Apply tokenization and Masterpass. Augmented reality? Tokens and Masterpass. Voice assistants like Alexa? Bots? Apps? Websites? Brain interfaces? Tokens and Masterpass.
“I think it is a good proof point to the strategy of what I call the till model, or the horizontal model within payments,” said Anderson. “We built MDES to build a bridge to get the accounts out of analog land and into digital land. We built Masterpass, which came out of MDES, to to give them new interfaces. Obviously, we do interfaces for app and contactless and now we can start adding on different interfaces with just a little bit of API work and fit the different purposes of context.”
Bots As Another Layer Of The Stack
Some people like to think that every new platform created will be the next great consumer hit. We have been spoiled over the past couple of decades when this has generally been true. The Web comes along and it becomes an essential aspect of human life. Apps come along and displace some of the Web’s dominance and create an adjacent platform and become another dominant interaction model.
Coming down the path we have bots, virtual reality and voice platforms. Are these the next mega platforms that replace what came before?
The answer is no. Despite what techies like to tell everyone, apps didn’t displace the Web. The two coexist in a complex, meaningful and robust ways. Apps added to the digital stack that started with the Web.
“I think any new use case and experience, it takes time to see what makes sense of that interface,” said Matt Miller, vice president of project management at Mastercard. “There are things that work great on mobile and on a touch screen and have totally revolutionized how people interact with that brand and that capability. And there are things that things that still work better on a website, that have a better experience on the desktop/Web.”
The same thing will happen with bots. Instead of overtaking the previous platform, bots will become another part of the stack. Will some functionality work better on a bot than in an app? Sure. But the opposite will also continue to be true.
“I think bots will replace some functionality,” said Miller.
Should you business go out and build a bot right now? If you are a company like Mastercard that has a mission of fulfilling all the potential surface area of the world with payments, yes you do. Or maybe you build a bot if you need help with customer service or mass consumer interaction. Bots are very good at handling scale and helping people get information and make decisions. Will bots be necessary for everybody? No. Just like apps weren’t necessary for every company, bots will be perfectly suited to some use cases and not suited to others.
Each company must decide on what elements of the stack—that ever expanding digital surface area—make strategic sense for their businesses. The mistake of the apps economy was that every company rushed out to build an app even though many didn’t need to. Bots should be the same way: a strategic choice to fit a specific goal.