Welcome!

News Feed Item

How To Design Innovation In Payments

This is not a news flash: Payments is about the most complex platform industry there is and igniting innovation in payments is anything but a given these days, even if a company is doing it within the construct of a successfully operating platform. The complexity, as we all know, rests with the discipline of having a strategy that can create the delicate balance across all stakeholders, deliver traction in a relevant timeframe and drive profits.

But this perhaps is: “An abundance of evidence suggests that greater attention to the ways in which organizations and incentives shape the innovation process can produce significantly better results,” remarks Josh Lerner, Harvard Business School Professor and author of The Architecture of Innovation. This new book sheds new light on how corporations should organize their innovation initiatives in order to produce the best results: getting innovation to market and ignited. The implications to the payments industry are real and they are relevant.

This topic, The Architecture of Innovation in Payments, is one of several interactive keynote sessions at The Innovation Project 2013, a two day gathering of senior executives in payments who are driving innovation in the payments and broader commerce ecosystem hosted by PYMNTS.com.

Lerner makes the case in the book that Corporate R&D doesn’t necessarily yield the desired outcome. He points out in his book that as recently as the end of the 1990s, for those companies that organized innovation that way, R&D-driven innovation contributed less than 25 percent of the value of what investments in traditional assets would have produced for that company (e.g. supply chain efficiencies, cost reductions, etc.). Venture investing isn’t seen as the panacea either. Investments made by the entire venture capital sector over the course of any given year amount to much less than the R&D budgets of a single giant pharmaceutical firm like Merck or a automotive giant like GM. And, in 2011, venture-backed firms represented less than 10 percent of all publicly traded firms in the U.S.

So, what would? Well, surprisingly, what many have already started to do. Simply stated, it involves having corporations invest in promising start ups, usually through a separate entity, and then creating an operating model that is helpful enough to the venture without drowning it in the corporate bureaucracy that would only slow things down – or worse.

There are two forces of nature that are moving the industry in this direction. First, the largest players in the space are today funding dozens of “innovation experiments” focused on driving payments into the mobile realm, and more broadly expanding the reach of electronic payments. At the same time, access to new technologies and the availability of IP-enabled devices such as the smart phone and tablet reduced the barriers to entry for many an emerging venture to make a play for something new, innovative and game-changing. Hundreds of millions of dollars of venture money poured (and are pouring) into the sector to foster the “next” new thing in payments. In 2012 alone, more than $1 billion was invested in emerging payments firms by VCs. But as good (and well funded) as their great ideas might be, most of these ventures will need distribution and scale to ignite and access to the “incumbents” to make that happen in any sort of meaningful way. They’ll also need access to the people inside the organization who can “school” them on what it means to be in the payments business. Many of them have no clear idea of its complicated inner-workings.

Those two forces, Lerner believes, sets up exactly the right environment for the right model for innovation in large organizations – corporate venturing – something that takes the best of both worlds and devises a structure, a framework and a set of incentives for advancing strategic goals and generating good returns on those investments.

The Innovation Project 2013 interactive keynote session on The Architecture of Innovation in Payments will tackle this topic head on. Lerner and Diane Offereins, President of the Discover Network, will engage four C-suite innovators — all pioneers in designing and deploying innovation in payments — on a wide-ranging discussion of incentives, partnership strategy, innovation design, ignition obstacles and more. Offereins is credited with coming up with the idea to license the Discover network to other innovators to propel their innovation agenda four years ago. She will give Innovation Project 2013 delegates a peek inside the strategy that was used to develop and deploy this strategy internally, and use that to engage the panel on the impact of that strategy on innovation inside of the payments sector. Panel participants include:

  • Chris Gardner, co-Founder and CEO of Paydiant, a cloud-based solution that enables banks and merchants to accept payments via the mobile phone. Gardner will share his thoughts on how he and Paydiant have aligned incentives for innovation with some of the biggest bank and merchant partners in the US.
  • Mike Kennedy, Chairman of ClearXchange and EVP for innovation at Wells Fargo, will describe ClearXchange’s blueprint for getting the three biggest banks to the table around a new idea, and how that framework may change in order to take ClearXchange to the next level of innovation in mobile payments.
  • Chitra Narasimhan, Managing Director at CitiVentures, will offer her insights about how to structure and incent innovation inside huge financial institutions and provide support to emerging ventures without overwhelming them in corporate bureaucracy.
  • Mike Pasilla, CEO of Elavon, will describe how innovation works at Elavon and explain how he attracts and retains key partnerships while balancing the requirements of his bank parent company, and payments regulatory environment.

The Innovation Project 2013 is being held on March 20-21 at Harvard University. For information on how to register and for a look at the entire programming line up, please visit theinnovationproject2013.com.

About The Innovation Project

Over 2 days, more than 100 speakers and 500 senior members of the payments industry will change the way that the payments and its broader commerce ecosystem thinks, talks, delivers and ignites innovation. On March 20th and 21st the greatest minds in commerce and payments will assemble at Harvard University near Boston to kick the conversation about innovation up to an entirely different level at a program called The Innovation Project. Speakers and delegates are among the most senior executives and elite innovators from literally every established payments company worldwide, along with the CEOs/founders of the most innovative start-ups. One of its five modules includes pairing industry CEOs with external thought leaders such as Al Gore (former US VP), Steve Levitt (Freakonomics), Eric Reis (The Lean Start Up), Rosie Rios (US Treasurer), Russell Simmons (Rush Card), Raj Date (CFPB), and Josh Lerner (Architecture of Innovation) to challenge the conventional wisdom around what it will take to get merchants and consumers to adopt new ways to shop and pay. Warren Buffett is the program’s keynote. The Innovation Project also hosts the industry’s 2013 PYMNTS.com Innovator Awards, given to 15 of the industry’s top innovators over dinner, which this year will be emceed by B.J. Novak of The Office and will introduce delegates to 40 of the hottest “next generation” payments innovators. The ThinkAThon will challenge a small group of delegates to frame solutions to tough industry problems and compete in front of delegates and judges for the title of “Master Payments Guru 2013.”

About PYMNTS.com

PYMNTS.com is reinventing the way in which companies in payments share relevant information about the initiatives that shape the future of commerce and make news. This powerful B2B platform is the #1 site for the payments industry by traffic and the premier source of information about “what’s next” in payments. C-suite and VP level executives read it daily for these insights, making the PYMNTS.com audience the most valuable in the industry. It provides an interactive platform for companies to demonstrate thought It provides an interactive platform for companies to demonstrate thought leadership, popularize products and, most importantly, capture the mindshare of global decision-makers. It’s where the best minds and best content meet on the web.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Detecting internal user threats in the Big Data eco-system is challenging and cumbersome. Many organizations monitor internal usage of the Big Data eco-system using a set of alerts. This is not a scalable process given the increase in the number of alerts with the accelerating growth in data volume and user base. Organizations are increasingly leveraging machine learning to monitor only those data elements that are sensitive and critical, autonomously establish monitoring policies, and to detect...
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Most companies are adopting or evaluating container technology - Docker in particular - to speed up application deployment, drive down cost, ease management and make application delivery more flexible overall. As with most new architectures, this dream takes a lot of work to become a reality. Even when you do get your application componentized enough and packaged properly, there are still challenges for DevOps teams to making the shift to continuous delivery and achieving that reduction in cost ...
Enterprise architects are increasingly adopting multi-cloud strategies as they seek to utilize existing data center assets, leverage the advantages of cloud computing and avoid cloud vendor lock-in. This requires a globally aware traffic management strategy that can monitor infrastructure health across data centers and end-user experience globally, while responding to control changes and system specification at the speed of today’s DevOps teams. In his session at 20th Cloud Expo, Josh Gray, Chie...
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. Jack Norris reviews best practices to show how companies develop, deploy, and dynamically update these applications and how this data-first...
Intelligent Automation is now one of the key business imperatives for CIOs and CISOs impacting all areas of business today. In his session at 21st Cloud Expo, Brian Boeggeman, VP Alliances & Partnerships at Ayehu, will talk about how business value is created and delivered through intelligent automation to today’s enterprises. The open ecosystem platform approach toward Intelligent Automation that Ayehu delivers to the market is core to enabling the creation of the self-driving enterprise.
"At the keynote this morning we spoke about the value proposition of Nutanix, of having a DevOps culture and a mindset, and the business outcomes of achieving agility and scale, which everybody here is trying to accomplish," noted Mark Lavi, DevOps Solution Architect at Nutanix, in this SYS-CON.tv interview at @DevOpsSummit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We're here to tell the world about our cloud-scale infrastructure that we have at Juniper combined with the world-class security that we put into the cloud," explained Lisa Guess, VP of Systems Engineering at Juniper Networks, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
Historically, some banking activities such as trading have been relying heavily on analytics and cutting edge algorithmic tools. The coming of age of powerful data analytics solutions combined with the development of intelligent algorithms have created new opportunities for financial institutions. In his session at 20th Cloud Expo, Sebastien Meunier, Head of Digital for North America at Chappuis Halder & Co., discussed how these tools can be leveraged to develop a lasting competitive advantage ...
In his session at 20th Cloud Expo, Mike Johnston, an infrastructure engineer at Supergiant.io, discussed how to use Kubernetes to set up a SaaS infrastructure for your business. Mike Johnston is an infrastructure engineer at Supergiant.io with over 12 years of experience designing, deploying, and maintaining server and workstation infrastructure at all scales. He has experience with brick and mortar data centers as well as cloud providers like Digital Ocean, Amazon Web Services, and Rackspace. H...
The question before companies today is not whether to become intelligent, it’s a question of how and how fast. The key is to adopt and deploy an intelligent application strategy while simultaneously preparing to scale that intelligence. In her session at 21st Cloud Expo, Sangeeta Chakraborty, Chief Customer Officer at Ayasdi, will provide a tactical framework to become a truly intelligent enterprise, including how to identify the right applications for AI, how to build a Center of Excellence to ...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
DevOps is under attack because developers don’t want to mess with infrastructure. They will happily own their code into production, but want to use platforms instead of raw automation. That’s changing the landscape that we understand as DevOps with both architecture concepts (CloudNative) and process redefinition (SRE). Rob Hirschfeld’s recent work in Kubernetes operations has led to the conclusion that containers and related platforms have changed the way we should be thinking about DevOps and...
As businesses adopt functionalities in cloud computing, it’s imperative that IT operations consistently ensure cloud systems work correctly – all of the time, and to their best capabilities. In his session at @BigDataExpo, Bernd Harzog, CEO and founder of OpsDataStore, presented an industry answer to the common question, “Are you running IT operations as efficiently and as cost effectively as you need to?” He then expounded on the industry issues he frequently came up against as an analyst, and ...
SYS-CON Events announced today that Massive Networks will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Massive Networks mission is simple. To help your business operate seamlessly with fast, reliable, and secure internet and network solutions. Improve your customer's experience with outstanding connections to your cloud.