Morals and economic issues of ‘seamless’ payments; some thoughts.

Slight departure from the usual security fare this post, but hopefully you’ll find it interesting!

This week I attended the ‘Cards and Payments’ summit.  This was pretty interesting, and it was certainly good for me to attend a conference not purely focussed on security to see what the wider payments industry is talking about at the moment.

I’ll provide a brief overview in another post, but I wanted to write my entirely non security and non technical thoughts on a particular topic that was discussed numerous times over the two days;  How to make payments as seamless, transparent and friction free as possible.

On the face of it this seems like a great idea.  Who wouldn’t want to be able to securely pay for goods and services without any friction or interruption to what they are doing?  Indeed I’m even involved in some work around how we can use things like device ID, location, behaviour etc. to improve security while lowering friction.

However the other side of this coin is the fact that people have been proven to spend far more as they get further from transferring actual cash to someone else.  Since the inception of credit and debit cards, people in properly controlled studies spend more, will value the same good higher and will tip more with a card vs. making a cash payment.

This trend further continues as you move online, the more transparent payments are and the less involvement the consumer has in the payment process, the more likely they are to spend.

When you consider this fact in the overall picture of many countries where people have a clear propensity to overspend and carry more debt than they can manage, is this trend a good thing?

From a moral perspective should we really be creating ways that have been proven to psychologically increase spending when many people are already in a lot of financial difficulty?

You could of course argue that people need to be responsible for themselves, which is an opinion I often tend towards.  However I think industries do need to be held to some level of responsibility for their customers, especially when there are clear and impartial studies highlighting the risk and psychological triggers that are being used to change behaviours.

On a macro level I would also argue that the economy as a whole would be better off in the long term if consumers are managing their money better as they will always have money to spend.  The reality of ongoing over spending is longer term economic troubles.

One of the presenters who was promoting the benefits of completely seamless payments with seemingly no controls on how much you spend was from sky <betting and gaming.  He unsurprisingly disagreed with me and spoke of making the process as seamless and excellent as possible.  This seems particularly dangerous as they are clearly combining potential habit and addiction issues with technology designed and proven to make people overspend..

To be fair to him he did mention having other things they offer to help with gambling problems, but he was very clear these should be separate from the actual gambling and payments process – which does kind of miss the point in my opinion.

What do you all think?

Is some affirmative friction a good thing in payments?

Should business have some obligation to look out for its customers rather than just doing everything to make them spend?

Regardless of the moral question, should businesses have some view to the longer term health of the economy?

If not business, is regulation the only answer to drive good behaviours from them?


It would be great to hear your thoughts!

We’ll be back to security stuff for my next post..