Finetics™ Studio at Money20/20: Steve Kirsch

Finetics Studio | Payments | 2/26/2016 1:54 PM

Token CEO and founder Steve Kirsch joins us in the Finetics™ Studio, live from the exhibition floor at Money 20/20, to discuss developments in payments technology with PaymentEye's Sarah Gill.


Sarah Gill, Reporter: I'm joined by Steve Kirsch, CEO and founder of Token. How about we start off with talking a little bit about what you're building at Token? Why did you start off on this journey?

Steve Kirsch: Well, I saw a lot of problems with payments, and people always said, "Oh, payments are really hard. You shouldn't get into it." And so that seemed like a great opportunity for someone to fix that problem. And so it took a long time, but I realized that the Internet enabled people to easily transmit data between parties, and the invention of the Worldwide Web allowed people to now exchange information and also structured data very easily. But there was nothing, really, for money that provided the same amount of service.

That's why it's easier to pay for something offline than it is online. I mean, how many people will go to a store and say, "Wait. I don't want to take out my credit card. I'm instead going to go and navigate to your website, fill in 14 fields, and click Okay to make my purchase." It never happens.

And the reason is that there's a lack of infrastructure to bring payments into the digital world. And so what we do is we took a very old paradigm, the token that was invented 2,600 years ago, and we added all the latest, modern-day techno-wizardry like identity security, cryptographic signatures, property lists, and all these things that have been invented sort of since, in the last 2,600 years. And we updated this really old, simple paradigm that people used to exchange value, and we updated it to a modern paradigm that people now can use to exchange value in a very seamless, easy way that's never before been possible. And that's the huge breakthrough. So this is as important to fin tech as the Worldwide Web was to fin tech from a data perspective, but this is to a value transfer perspective. So it's huge. It's a huge breakthrough.

Sarah Gill, Reporter: Great. And then, and what's kind of the most interesting thing you've learned along the journey of building Token?

Steve Kirsch: I think that when we first started off, we had an idea for the technology and what we wanted to do. But it's been quite challenging to explain that to people. And I would talk to people in the payment space and I'd talk about ISO E583 and all these things, and I would assume that people knew what I was talking about, and I found that, oh, gee, it's so specialized that people in payments, they're--and even people in payments for 25 years, I'd talk about, "Oh, and of course, we use NSS to do the settlement in the US," and they're saying, "What's NSS?"

And so these--so people told me, "Oh, you have to dumb it down." And then so I dumbed it down, and then people said, "Oh, but you have to then dumb it down even more." And that's because payments are actually, even though it seems very simple for people to use, the underlying technologies and the systems and how we do settlements and how we do foreign exchange and so forth is actually fairly complicated.

And when I said, "Oh, you know, we can do FX very, very simply, and we can do it instantly cross-border," people would--who are experts in payments--would look at me and say, "Well, that's impossible. How could you possibly do that? Don't you have to involve the central banks?" And I said no. And he said, "Well, how do you do that?" And I said, "Well, do you have a--" and this is a guy in the UK. I said, "Do you have a five-pound note?" And he said yes, so he pulled out a five-pound note, and I said, "Well, here's a five-dollar bill. Can I have your five-pound note, and I'll give you my five dollars." And he did it. He was maybe, probably shouldn't have done that, but he did that.

And I said that, "See, we just did that without any central bank involvement, and the banks didn't get involved at all, and that's how Token works. It takes things that you can do in the physical world, that's very easy to do in the physical world, and it translates those paradigms into the digital world so you can do things as easily in the digital world as you could do things in the physical world." And that's the thing that was game-changing.

And it was really learning how to explain those paradigms to people in a way that they could understand. And once we did that, then everybody said this was awesome.

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