Al Gore, Vice President turned entrepreneur, Apple Board member, Senior Advisor to Google, and Nobel Peace Prize winner, has something on his mind. Well, actually on his Global Mind. It’s a concept that he’s been toying with for the last eight years or so, as he contemplated the answer to a simple question: What drives global change? His new book, “The Future: Six Drivers of Global Change” answers that question and lays out a prescription for how to harness that change to transform just about every aspect of the global village Gore calls Earth, Inc.
And, we should listen because the once VP has been working closely, over the last decade, with two of the most transformative companies in the world – Apple and Google.
One of the six drivers Gore has identified has its roots squarely in the payments and commerce corner. It’s the concept of The Global Mind. The Global Mind is what happens when technology connects people and information in ways that makes us, well, global – and pretty much inseparable. This global network of information and access has the power to transform just about every aspect of our lives – from being able to see and talk to relatives halfway around the world, to enabling a fisherman in Finland to sell his fish to a restaurant in Fiji – all in a nanosecond using devices that are smaller than transistor radios were in the 1950s.
But to hear Gore describe this concept, is to also understand the obligation that comes along with such opportunity. “The Global Mind,” Gore says, “represents what is arguably far and away the most powerful tool that human beings have ever used, [so] it should not be surprising that it is beginning to reshape the way we think in ways both trivial and profound – but sweeping and ubiquitous.”
It might just be that it is the notion of the Global Mind — and all the power and potential that it represents — allows us to ignite something in payments we call the Second Internet Revolution. This revolution rapidly blends the physical and virtual worlds to create new ideas, new businesses, new business models, and new opportunities for innovation in payments, commerce and beyond.
The Global Mind | Create. Destruct. Repeat.
We believe that nowhere is the potential for the Global Mind to transform, disrupt, and create greater than in the payments and commerce. It’s the industry behind every single exchange of value everywhere in the world between people and businesses, and people and people. It’s massive — $4 Trillion in volume in 2012. It’s pervasive. It’s critical.
- The Global Mind is giving birth to an entirely new class of consumer. According to the OECD, in 2000, 83 percent of the world’s population — or 5.1 billion people — lived in developing countries, but represented only about 18 percent of global private consumption. In 2012, 85 percent of the world’s population lived in developing countries but their share of global private consumption has jumped to nearly 30 percent. Thanks to access to the Internet — and the mobile devices that connect to it —this emerging middle class is accessing, building, and driving commerce at both the local and global levels in ways that has raised the standard of living for everyone in those markets.
- At the bottom of the pyramid, more than half the world’s population lacks access to a bank account – and in many cases – even a bank. And they live on less than $2 a day. But, now more than 80 percent of the world’s population now has access to a mobile phone and nearly a third has access to a smart mobile phone, thanks to the introduction of low-cost devices into important global markets, which means that these people finally have access to a bank – but a bank without bricks and mortar. The result is nothing short of transformative. Over the last decade, roughly 100 million people have been given access to a “bank” account thanks to mobile technology and analysts expect that number to double to 200 million by the end of 2013. The Global Mind has delivered not only access to financial services but the financial dignity that will lift people and economies out of poverty.
- In 2012, mobile commerce worldwide represented but a pin drop of all commerce activity (less than one-half of one percent) since most of it was actually done “online” and not in a physical store. That said, it managed to contribute about 25 percent of all eCommerce sales, and helped to chip away at on/offline retail spend ratio (7 percent/93 percent). These smartphone and tablet shoppers drove more spend too, not surprisingly, given the current price points of both and the income levels that implies. But, over time, as smart phones become more pervasive everywhere, the combination of mobile devices and technology will blur the distinction between mCommerce, eCommerce and retail commerce as people move and transact seamlessly from one channel to another and just conduct commerce with merchants anytime and anywhere.
- The Global Mind is a treasure trove of data. Google and others showed us the power of data a decade ago — organizing all the information on the web and helping people find needles in this gigantic virtual haystack of information. That has spawned innovative ways of using data to help people find things to buy that will improve their lives and to help merchants find people who might want their stuff. The Second Internet Revolution though is taking that to another level as mobile devices bring the power of search, and Big Data, into the physical world. Just look at people using their mobile phones in stores or being served coupons based on their physical location to stores offering them — primitive ways of using the Internet to power physical commerce, and only the very beginning.
Six captains of the global payments industry will contribute to The Innovation Project’s Global Mind on payments innovation by sharing their thoughts, insights and ideas on the future of payments around the world — as they see it and are doing it. They’ll share the tradeoffs that they faced as they said “hello” to innovation and “so long” to the status quo. They’ll tell us why they did what where, and what markets they think have the most to contribute to the notion of the Global Mind and when. They’ll put in context the opportunities made possible by the richness of the technology that is now available to us and the obstacles inherent in this vast global infrastructure that never make that journey as simple or easy as it may have looked at the start. They’ll respond to Vice President’s Gore challenge to make the Global Mind work for everyone by sharing just how what they are doing will democratize the commerce opportunity for those living in developed and developed economies.
- Roger Hochschild, President and COO of Discover, is squarely focused on the consumer. “We believe that consumers want something different from a credit card company – something that addresses their specific needs, treats them fairly and gives them what they deserve,” he says. And, Discover has delivered on that promise, ranking #1 in customer loyalty among credit cards for 16 years in a row. But its recent decision to license its network shows its commitment to something else too: enabling the innovation of others to touch consumers well beyond the Discover brand and at the same time, expanding the global reach of commerce. We’ll hear Hochschild talk about how Discover’s innovation ambitions make it easier for commerce to be exported so that innovators in one country are able to see their innovations take shape all over the world.
- Jeff Jordan, Partner Andreessen Horowitz and former CEO of PayPal, is pretty sure of one thing: physical retail is dying. “The piece of the pie left over for physical retailers is rapidly shrinking. And what’s worse for them, competition from their online counterparts is starting to push them towards suicidal tactics like matching the prices of competitors that have much lower costs. For many,  might be their last holiday season.” He chalks this up to “inefficient physical businesses” saddled with bad business models. These retailers, one might say, are ignoring the potential of the Global Mind and the implications for the payments industry are chilling. Sure, people will still buy things, but how they behave online may be very different then how they behave when they walk into a brick-and-mortar retailer — as are the economics of those transactions. As an investor, Jordan and his colleagues also recognize how technology democratizes innovation and drives a explosive growth in the supply of entrepreneurial talent as a result of lowering the barriers to entry — just witness the explosion in apps for the Apple and Android platforms. Jordan will share his insights on how the Global Mind has and will set contribute to the creative destructive of commerce as we know it today for the benefit of Earth, Inc. moving forward.
- Karl Metha, Former CEO of Visa PlaySpan and White House Technology Fellow, knows a thing or two about creating global economies. As the CEO of Playspan, he created the gaming industry’s first publisher-sponsored in-game commerce network, bringing, he says, “aw, order and commerce to a massive industry” which lacked all of the above. “The lifeblood of the online world is a good in-game economy,” Metha says. “Prior to PlaySpan, gamers had to go to various unsanctioned sites to buy in-game items and currencies…at huge risk as the vast majority of these sites are infested with fraud, account theft, and no guarantee of delivery.” Metha’s work is not only the basis for Visa’s V.me massive push into the digital wallet world, but the 20 percent Initiative, a White House program that will transition “the last mile” of international development assistance payments from cash to electronic methods. Metha will help us understand how innovating the gaming industry has informed the largest payment network in the world’s innovations in payments and the biggest economy in the world’s focus on improving financial access while reducing costs.
- Gaylon Jowers, Executive Vice President of TSYS and President of TSYS’ International Services segment, has been a critical influence in the company’s strategic decisions for the past two decades, playing a key role in its international expansion to Canada, Mexico, Europe, Brazil and the Asia-Pacific. He also helped TSYS succeed where no other U.S. payments company had been able to — China, striking a deal with China UnionPay in 2005 that helped China UnionPay meet the needs of the emerging middle class there who wanted to use credit card products. Jowers has seen the powerful impact on people and economies when digital infrastructures provide access to commerce, but he also cautions that “like time, innovation doesn’t stand still.” We’ll hear Jowers talk about why now is the time to step up the pace in innovation and who will suffer if the collective payments industry does not.
- Russell Simmons, Founder of the RushCard and CEO of UniRush is a sort of modern, more urban version of a Horatio Alger story. Simmons single-handedly turned hip-hop from a niche urban genre to music for the masses. He quickly parlayed this powerful platform, his brand and entrepreneurial knowhow into an empire comprising clothing, media/television, philanthropy and payments. Simmons felt that he could do for prepaid cards what he did for rap music – use his brand to embrace the underserved and disenfranchised. RushCard was launched in 2003 as one of the first prepaid Visa debit cards to hit the market. Its stated ambition is to offer financial empowerment to the 60+ million of underbanked Americans who have no financial services alternative. Its customer base is extremely diverse: RushCard garners strong acceptance among not only the African American community, but across the full spectrum of “un” and “underbanked” Americans. Today, RushCard boasts that its customers are among the stickiest in the prepaid business, in terms of customer retention, overcoming one of the big challenges that keep these products from being successful. For Simmons, RushCard isn’t just about new product features, it is about “improving the overall financial well-being of our members,” and allowing them to use it to “take control over their financial lives.” Simmons will explore the relevance of the “Global Mind” to the problems that exist in the most prosperous nation in the world – the US.
- Lisa Stanton, CEO Monitise North America has been with Monitise since it started in the US in 2007. Launched in the UK in 2003, Montise has grown to become the world’s leading mobile banking and transaction platforms – powering the mobile banking applications of hundreds of banks and financial services providers worldwide. Now a decade into the market, it has experienced exponential growth as both banks and consumers in the developed world embrace the mobile phone as an access tool for important financial services. More than 20 million customers drive 2 billion transactions a year across its platform. For banks and other financial services providers in these markets, the mobile device also provides a new and different way for banks to engage with consumers across all aspects of their financial lives. However, the potential to reinvent commerce is greatest in developing economies, where the mobile phone isn’t just any access device, it is the
- Gary Flood, President MasterCard Global Products and Solutions, is tasked with enabling the conversation between these amazing payments innovators and the former Vice President of the United States who has a clear vision for the future. Flood has been with MasterCard for 25 years and has pretty much seen it all when it comes to innovation in payments. “The one thing about it is, there’s something new every day,” he remarked. “You wake up in the morning and you go online, and you can see the different types of developments that are occurring around the world – by the banks, the networks, the innovators. These are people that are developing technology solutions, consumer driven solutions, the B2B solutions. If you think about the next three, five, ten years, there’s an awful lot that’s going to happen. And a lot of it we don’t really have nailed down just yet.” Flood’s job is to make sure that if nothing else happens in this 90-minute segment, that each of these luminaries articulate their views on the Global Mind, its connection to global commerce, and the call to action to each and every one of The Innovation Project 2013 delegates to contribute to this common goal.
Some of the questions that Flood will pose use to engage the panel includes:
- What can the payments industry do – individually and collectively – to increase prosperity around the world? Who will benefit the soonest and the most?
- How will these developments change the way you do and think about innovation?
- Who in the ecosystem has the most to contribute and what should they be doing? Is there a leader – and if so, who should that be? If not, how do we assure that we move together toward a common goal?
- What innovation has been entirely overlooked in an effort to create commerce opportunities for people who haven’t yet experienced it? What can be done to move it farther forward in the priority queue of the payments ecosystem?
- What’s the role of payment networks in making The Global Mind a reality? What’s the role of alternative players?