For a cryptocurrency marketer, selling payment innovation to the average banker is like trying to play charades with a blind person. But, communications of this sort do not have to be problematic. With patience, respect and understanding one can learn from interacting with those who experience the world in such a different manner.
When it comes to being a patient marketer in the field of payments, we are listening carefully to local bankers since they are are the minority controlling our money. It also makes sense to try to learn certain perspectives from a “blind” person because he “hears” a lot more than the average person. “Blind-in-understanding-future-payments” small local bankers are naturally better communicators with the general public who — along with this analogy — only possess a sense of smell and lack both sight and hearing.
What follows is some of the research and insight we have learned from these bankers:
Most people never needed Paypal, ApplePay and other online payment platforms. But marketing is strong and the pressure from providers was enough to get the ball rolling. People were okay with cheques — not because they liked the tactile feel of a piece of paper — but because of the user experience and feedback earned by paying a recipient by cheque. You share your wealth where you got it. You invite to your bank instead of asking where your counterparty has an account (which is none of your business) or making her or him have an account within the network you use.
Cheques are expensive, they are slow, and they present a huge possibility for fraud. Enter the blockchain with its relative cheapness, speed, and unparalleled security.
Blockchain community: why not develop a paperless cheque platform?
People care about decentralisation — they don’t really trust the Federal Government or global corporations including VISA and PayPal. They certainly hate large bank bailouts and other potential causes of inflation. But, this concern does not translate into a demand for single-layer distributed payment networks or “be your own bank” products. People have no issues with trusted (often local) financial institutions who help them to finance their business or store their assets. The sort of decentralization that people actually demand has been around for decades.
Blockchain payments and cheques share the same direct competitors: large centralized services like VISA or PayPal.
Revolutions are not pretty and despite all the romantic notions of overthrowing corrupt regimes the average person prefers crooked-stability over chaotic-justice. Financial innovations should not be disruptive and must be evolutionarily justified. The average consumer doesn’t crave new currencies; even if they promise deflationary benefits. No one cares that payments and currency became one on the blockchain. People still like their dollar and their flag. Innovations need to appear at the right speed, have a sense of continuity, and — preferably — offer some reasonable backward compatibility.
Despite a general perception that cheques are dead they are still quite dominant. Even in retail they comprise 10% of transactions.
While nobody believes that cheques are “the payment method of the future”, business-to-business payments via cheques are as strong as ever. As far as formally calculated averages are concerned, half of business payments are done with cheques. If you take giant corporations out of the stats, only 10% of payments are non-cheques! (See The Future of B2B Payments by BC Krishna.) Yes, we know it is almost 2017 and we know it’s “only in the US”. Well, yes. That actually makes the point stronger because it refers to 80% of global payments in this case.
Payment solutions must be built around the core asset of every business — its accounting & enterprise resource planning system — not the other way around. Businesses are not stupid nor too stubborn to use cheques, they’ve been trying to find an alternative for a long while. ACH, Bill Pay, NvoicePay, Intuit, Ariba, Dwolla, and other could not provide one for businesses of all sizes.
Private keys have a lot in common with physical signatures and are the closest analogues across the entire industry segment.
Diagram source: The State of Payments 2016 Survey
Blockchain and cheques are the only payment sub-segments that have a decent image these days. The image of cash has been purposefully spoiled by authorities. The image of cards is bad due to relations to debt. It is not clear why any blockchain startup would want to use words like “cash” or “card” which do not have much power in terms of marketing. The clear solution is to build blockchain cheques instead!