Money & Millennials - The Changing Contours of Innovation for the Mobile Generation

In 2005, LG launched a phone for kids - the cute, colorful MiGo with geo-fencing, etc. This was after years of planning and research; it was a huge flop. Then there was a 'senior phone' with big buttons, simple UI, etc. Guess what happened to that? It never launched! And then we had music-optimized phones designed like MP3 players and video-optimized phones designed like camcorders, and many other 'segment-specific' innovations. Mixed results at best, especially compared to the grand unification that came with the iPhone - there were no further attempts at this slicing and dicing of mobile handset feature sets to cater to particular groups of users.

We are witnessing a similar pattern in payments innovation, along with the early failures. Kid-friendly banking products with 'parental controls' have come and gone, with and without mobile. There is talk of specialized payments and banking products for seniors and ethnic groups, but none have yet attained critical mass. There is the obvious problem with 'senior-friendly' and 'kid-friendly' products, which is that most seniors and kids don't want to be seen as seniors and kids. However, the problem is more nuanced than that.

There are now plenty of payments startups catering to SMBs, most of them using prepaid accounts under the hood. Some also have a mobile angle to them - and that in itself is a problem. There can be no such thing as having a 'mobile angle' if you want to be successful with any innovative solution. Mobile is not just an angle; it's the backdrop; it's the foundation; it's in the ether everywhere around the innovation. Yet, for a variety of reasons, the payments world is still influenced by the parochial DNA of cards and rails, of regulations and processes, of interchange and rate cards.

The payments and banking world needs to speak a different language internally: of APIs & SDKs, not just KYC and AML; of authentication & identity, not just fraud and CNP; of middleware not middlemen. It will also benefit from a different language externally when talking to the new customer, to the mobile generation of millennials and in fact everyone - regardless of demographics - who is tech-savvy enough to know that most customer services reps probably know almost as much about you when you call as when you call 911. This is the generation that expects instant gratification: if you press a button that says 'transfer money', having to wait 3 days for it to happen is 3 days too late. This is the generation that has a higher bar: you just can't send someone who lives in an apartment a coupon for a lawn-mower; I expect McDonalds to send me a digital mango lassi coupon on my birthday because i signed up for their loyalty program.

The mobile generation expects true innovation, not appeasement. It expects a better ability to multi-task, to save time & money, to live life without unnecessary overhead, and to pay attention to experiences like eating out or enjoying a vacation or sending a gift or saving money on a shopping spree than spending mindshare on the associated utilities like the mode of payment or the number of SMS messages allowed in the data plan.

The mobile generation is broader and savvier and more demanding than any generation before it. Its expectations are based on the rapid collaborative innovation that the mobile ecosystem has allowed, and it's easy to see the evidence that the innovations in money and commerce can emulate the same path. Let's Talk Payments and The Money Event conducted two 24 hour hackathons recently, in Bangalore and Charlotte, and they demonstrated how APIs and SDKs were used to create compelling innovations for the mobile generation, literally in a day!

Yes, it can be done!

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