Finetics™ Studio at Money20/20: Marilyn Bochicchio

Finetics Studio | Payments | 12/2/2015 8:09 PM

Nothing in payments is revolutionary, according to Hidden Brain's Marilyn Bochicchio. In her conversation with PaymentEye's Sarah Gill, Marilyn digs into payments evolution, touching on everything from mobile payments to blockchain technology.


Sarah Gill, Reporter: I'm joined by Marilyn Bochicchio, CEO and founder of Hidden Brain. Do you feel like we're at an inflection point in the payments industry, or does it kind of just feel like that?

Marilyn Bochicchio: I think we're totally at an inflection point. And it's probably going to be the most major thing that's happened in payments ever. I think the interesting thing though about the inflection point is that it's not going to happen tomorrow. What we have is a situation where we have so many components coming together. And it's not a matter of whether we will advance with these. It's just how long it will take.

And I think because I've had that long span of experience, the thing I know is that nothing in payments is revolutionary. Payments is a very big ship. It takes time to turn it around. There are many players, a lot of regulatory considerations, a lot of interactions with value players; players in the value chain.

So we're still going to be talking about some of these things in 20 years. But it has begun. And there is no doubt that the payments environment going forward is not going to really resemble what we've known today or five years ago.

Sarah Gill, Reporter: Okay. I mean what do you expect the sort of key innovations to be in the next sort of 10 years?

Marilyn Bochicchio: Well, I mean I think some of things that are coming together that are real game changers are of course mobile payments. I mean the mobile phone, the smartphone has changed everything. But it's almost like today the smartphone is almost becoming old school. And we're really talking about mobility and the ability to use any number of devices that you're hearing about at Money2020 being used as payment mechanisms.

We have, I think in our future, a lot different kinds of forms of authentication that are going to make transactions safer. We have very exciting aspect of tokenization of transactions, also speaking to the security issues. And I think that we really can't forget about the new players in the space who have made it so exciting, and the potential for block chain technology over time, really reshaping how we do business.

Sarah Gill, Reporter: It really feels like there's kind of a new-- maybe rhetoric is the wrong word. But people are talking about payments and finance in a different way, and maybe putting the services back into financial services. I think one of the most exciting things is financial empowerment and that sort of thing.

Marilyn Bochicchio: Yes. And I think the interesting thing in that is it puts banks in a very different situation. Because at the end of the day you still need a bank, an insured depository institution to be the transmitter of those funds. And I think that that is where a lot of attention will need to be placed going forward to make sure that as all of these innovations come to market, as we're able to pay through so many ways that those underlying deposits remain safe.

And banks will change. And perhaps they will become more the utility supporting the mechanism. And it will be really important for them if they choose to maintain that consumer focus to be out in front with consumers.

Sarah Gill, Reporter: Looking to the next 12 months, what do you expect the kind of biggest innovations or trends to be?

Marilyn Bochicchio: You see, I don't really think innovations or trends really happen in 12-month cycles.

Sarah Gill, Reporter: 12 years.

Marilyn Bochicchio: 12 years. That's actually-- that's actually quite a bit better. I think that there will be far fewer plastic cards in use. But no payment mechanism ever goes away. So we will continue to have plastic cards. There will be a part in the payments ecosystem for them. But a lot of payments will be moving to mobile phones, as well as other mobility items.

I was talking to a man here yesterday who is looking to get funding for a Bluetooth device that you put on your car window to pay for your hamburger when you go through the McDonald's drive in.

Sarah Gill, Reporter: Even faster food.

Marilyn Bochicchio: Even faster. So I think we really need to be open to the trend of payment through a whole lot of electronic devices. And I think that will happen.

I think on the bitcoin side, I probably have some contrarian views on bitcoin, per se. But with respect to what it has done for the industry is I think it's done a couple of really important things. And one of those things is that it's really pointed out a need that the current system is not supplying. And that is for faster payments being executed in certain dollars on the FX side, and being done at a reasonable cost and quickly. So I think that is one of the big benefits that bitcoin has introduced to all of us.  

And the second, of course, is the underlying technology of the bitcoin. And that is the block chain. And I'll freely admit that I am not so smart that I can really understand how the block chain is going to be implemented. But I know at the end of some period of time, through a gradual transition, we will have a new way that financial data and significant other data will be processed. And that is going to be transformational.

But again, it is over time. Maybe the 12 years, or maybe it will go out for the 20 years.

Sarah Gill, Reporter: Yeah. I mean it's exciting. There's been a lot of big banks sort of making moves to at least start piloting, at least start experimenting and see what could happen.

Marilyn Bochicchio: And I think even more significantly is the central banks of a number of countries, including the US, including in the UK, are looking at the possibilities of bitcoin. And the reason I think that is so important for them to be examining the technology and the block chain, is because the regulatory environment in a decentralized system is going to be so different from what we're looking at today.

And if I could encourage, what should banks be doing, I think they should really be encouraging their regulators to start getting their heads wrapped around the bitcoin processing ability, and how they're going to look at that in terms of regulation. Because we don't want to get to a point where the regulatory environment is actually holding back a technological innovation that could be very advantageous.

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