Oct. 4, 2019 /MEDICI Americans spend about $4 trillion per year on their credit cards. That’s more than the GDP of both the UK and France. Yet, when it comes to payments infrastructure, we have not seen much improvement for decades. You may argue that if it ain’t broke, why fix it? Read on.

The most significant innovation in payments happened in the early 1970s when the card associations established their interbank network and the complementary messaging protocols. That infrastructure paved the path for instant purchases, instant credit issuance, and cross-border commerce. As long as I had a relationship with a bank that was willing to issue me a card, I could take advantage of the plumbing.

Since then, most of the payments innovation has happened at the edges (I’m unfairly discounting the efforts to implement ISO 20022 standards). Focusing on the last mile of the transaction is understandable because that is the core of the user experience, and improving infrastructure is hard and costly (for more on that, you can read my piece on payments standardization and modernization). The problem is that user experience optimization is forever hindered by the limitations of the infrastructure. At some point, an infrastructure lift is required to push the user experience to a level that is orders of magnitude better. We are at that point now.

Read more of Karim Gillani’s article on MEDICI.  

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