The Money 2020
We were somewhere over Barstow on the edge of the desert when the drugs began to take hold. First of all it was the coffee. I had probably had one cup too many, as I just couldn’t fall asleep. I just sat there in my cramped seat, wired and staring straight ahead. But it was the gin and tonic that really did it. I should’ve stopped at one, but I’ve got a fatal character flaw, an addictive personality and I just couldn’t resist. I ordered the second and that is when I could feel reality beginning to slip away…
We were on our way to check out The Money 2020, some crazy out in the desert payments thing. I don’t really know why. I’d been sitting minding my own business when the Finance Director called. “You’re going to cover The Money 2020, with Howard”, he told me. I didn’t have time to think. “There’s a suite at the Venetian” he told me. And expenses? “Yes, expenses”.
I called Howard. He picked up the phone. “What’s up, Gonzo?” he said. So I told. him. I told him I was frightened. It’s a zoo. There’s like 10,000 people there and they all care about payments. That’s like, crazy.
“We need to go, Gonzo” he told me.
“Why?” I said for the tenth time, “What’s the story?”.
Be the story, he told me.
This isn’t about consultancy, this is about gonzo consultancy. Next thing I knew I’m in the lounge. I saw this guy, looked like he wanted to go with us. Said his name was Tim.
He came along in a seat up front. He must have been more loaded than we were. Started babbling about digital money. Tibado, he might have said. Or Tibadoo or tip ado. Or something. I figured there would be a lot like him out there, under the desert sun, getting ready to change the world by making a marginal reduction in transaction costs for a limited subset of monetary interactions. I’ve heard it all before, mostly from me. Zzzz zzz zz.
Was I dying? My brain was shutting down, like they say it does when you’re at the end. I was feeling numb and I couldn’t think straight. All I could see was a bright light. Oh well, I thought, it was a good run. I saw the great Wall of China and I saw the launch of Mondex in Swindon. It’s my time.
Suddenly, Howard was there. He turned off the reading light. I could still see. “Howard,” I said. “I’m going. I’m slipping away”.
He looked at the pile of paper in front of me. “What did you do? You idiot! You’re not supposed to go through it all at once!”
He picked up the in-flight magazine and waved it in my face. “These are meant for emergency use only! If the plane is going down, then you open up the in-flight magazine and start reading it from beginning to end. You’ll be in a coma long before it hits the ground. Otherwise: no more than a page or two a time!”
I realised immediately that he was right but I was out of control and I glanced down at the page in front of me. “Morocco: Land of Contrasts”. I started feeling drowsy again almost immediately so I decided to take matters in hand and I stood up and began wobbling unsteadily towards the back of the plane to try and find something to bring me down. A nice cup of tea maybe. I wasn’t sure at first, but then I realised it was Emily Baum standing in the aisle in front of me. Smart lady. I always take her seriously. She looked panicked, distracted. “They’ve run out of vodka” she told me. I sensed her pain.
The tea and the KitKat stabilised me and got me as far as the immigration line. But when the cop asked me what I was doing here I couldn’t remember. My knees turned to jelly for a moment and while I was thinking what to say I remembered something that Howard said about how all of our clients would be there. But where? And then I remembered, and I told the cop about The Money 2020 and he let me through.
I caught up with Howard again in The Venetian. He was thinking about ordering something to eat but I told him as his Director of Innovation I advised against it. We’re both going to dinner tonight, was my thinking, so maybe just a coffee is enough. I told Howard that I was still feeling the effects. I hadn’t slept at all. The suite was great, but my head wasn’t. And just when I thought I was going to drop off, the alarm went off to remind me that it was time for the Manchester derby. My suite had two huge televisions in it and I couldn’t decide which one to watch so in the end I turned on both of them and watched them grind out a nil-nil.
Afterwards I’d walked through the casino which had turned out to be a bit of a mistake because the flashing lights everywhere were very confusing. I stopped for a moment try and work out what the blackjack dealer was saying but then I realised that the blackjack dealer was some kind of robot on a screen and the woman I thought was talking to me wasn’t a blackjack dealer but just someone playing a slot machine. “Are you having a good time?” she asked me. “Yes, yes” I told her, and then I told her why. I began to explain just why it is that network tokenisation is much more important than chip and PIN.
“This whole thing” I said, waving my arms around, “is to celebrate it”.
I was guessing, really. I couldn’t think what else it was about it.
I was telling Howard all about this but I had to admit I couldn’t remember which things were real or imagined, dreams or nightmares. I thought I saw something out of the corner of my eye and I told Howard that I thought there might be some lizard people here disguised as payments experts. “Lizards?”, He responded sceptically. “Well” I told him. “I couldn’t say for sure that they are lizards, but reptiles of some kind. I think I saw claws”. I didn’t tell him that I knew there must be people trying to destroy the system from the inside, and their reptilian nature might explain their poor strategic planning. Mobile payments, I thought. Or said.
Then I told Howard that when I’d woken up yesterday, I’d made some toast, and the toast had come out with my face on it. “You’re going insane” he told me. “There’s no shame in it. But you need help. Think about it: you can’t put people’s faces on toast!”.
“As your Director of Innovation”, I told him, “I have to advise you that you are wrong.”
See! See! It’s not a nightmare it is real. And I showed him. “But”, I told him. “There are some nightmares that won’t go away”.
“Like what”, he asked.
“Well, I heard some voices on the plane and I heard them saying that in America they are going to deploy EMV using chip and signature! Crazy ha!”.
“Sorry, man” he told me. “That shit is for real”.
A Toast to Them All
I was following Howard down the long, long corridor disappearing off into lights and chaos at the horizon. He was urging me on, telling me it was time to go and to be the story, so I followed. I’d already told him that, as his Director of Innovation, I advised against going to breakfast meetings at 7:30 AM but he was insistent.
It was about this time that we had our first business meeting. Howard said that I should go blend in, but I couldn’t see how. “Come on!” I told him, “think about what you’re saying! I’m a middle-aged overweight balding white guy — I’ll stick out like a sore thumb!”. A better plan was needed, but we were out of time. A woman who looked like she knew what she was doing came up to me.
“I understand that Consult Hyperion has leading-edge expertise in tokenisation and that they have been working for issuers in a number of different countries helping them to develop tokenisation strategies, procure tokenisation infrastructure and launch new products and services for both Secure Element and Host Card Emulation financial applications?” she said.
“Yes, we have” I said. “And to prove it here is a piece of toast with my face on it”.
I guess this whole business thing isn’t as hard as I’d thought. And the good thing about toast is that you don’t run out of it. The recipe is quite simple.
“Quick,” Howard told me, “get your act together man”. He was pointing down the corridor and telling me that guy in the grey jacket works some kind of scheme and that they had launched some cool products for The Money 2020 and that we should check them out, especially the stuff about issuer-authenticated tokens for loading into wearables.
I decided to take things by the scruff and I strolled over to him to find out if he could put tokens in the chip in my toaster. I offered him some of my peace toast as a show of friendship and he took it. Give peace toast a chance, I told him.
“Gonzo!” Howard was shouting.
“I’m in the kitchen,” I told him, “I’m making toast for peace”.
I went back to the kitchen to make some more toast for peace when I heard a commotion in the room outside. I heard a woman. “No,” she was whimpering. “The madmen, they finally did it. It’s war.”
My blood froze. I didn’t want any part of the The Man’s war, but the terrible coffee coursing through my veins turned my fear into a thrill.
“What? What happened?” I said, wanting to turn and run but fascinated to stay and see.
“They did it” she said. “They dropped the bombshell.”
Oh my god, I thought. I’d written about the possibility for a resurgence in three-party schemes before, but I wasn’t sure anyone would really do it. Yet the Generals in the J.P. Morgan Chase war room had gone for a first strike and launched Chase Pay. There was sure to be retaliation. Why? Best I could think of is that deep agents for MCX had been activated.
So what to do?
Then we had the idea. If I was going to be more of the story, then we should use the fact that I stick out like a sore thumb to stick out like a sore thumb.
“Leave it to me. I know people”, I told him and went downstairs to find my old friend Jonathan Weiner. I slipped a Benjamin in his pocket like the Amazing Randi and reminded him that he owed me for that Danish thing. Like magic I was in the green room and before I knew I was out in front of the conventional conventioneers.
Well, that worked out pretty well. I just asked a couple of questions that I found scribbled on a napkin at the lectern and these smart dudes on stage talked about them.
I tried hard to remember what they said because I thought I might interest Rolling Stone in a thousand words on but as soon as I stepped down and saw the free Haagen Daz my brain kind of scrambled. The Bank of America woman said authentication is a big deal and that they had a million customers who used it for fingerprint login, the FIDO guy said that it was standard, the Samsung Guy said they chose FIDO because standards grow markets, the Payfone guy said that mobile handsets were the best solution for most people and the Oberthur guy said that tamper-resistant hardware made it all secure. Cool.
Afterwards I had another drink and headed off to find some grown-up Vegas relaxation. I saw some kind of massage therapy service and figured hey that’s just what I need right now, so I went in through the discreet door.
But when I got inside, it was just a bunch of people talking about chips and stuff. The nightclub was advertising a band called Intel, but I couldn’t stay and wait for them to play so I just tried to make friendly with the hep cats hanging down there. I asked this guy why there was such a fuss about putting a Trusted Execution Environment inside a POS terminal but didn’t understand what he told me (something about security, or maybe he was calling security). Then I heard someone behind me order another gin and tonic (I think they got the idea from me) and say something about getting toasted. “Man,” I told him. “I’ve got just the thing”.
Them I remembered about the party invitation. I wasn’t sure if it was a four-party party, but I was in the mood.
Tapas Rites and Tapas Responsibilites
When the instructions to the party had first turned up in my inbox I was a little suspicious. “You’re invited”. What does that mean? What were they trying to tell me? I’d been made a kind of honorary member of the Payments Illuminati (our motto: someone you trust is one of us) a year or two ago, but I didn’t realise at the time that membership came with responsibilities as well as an eight course meal with matching cocktails tapas rights. I stared at the menu. And stared some more.
What did they want? I didn’t want to attract attention so I told Howard that I was going to go have a glass of water and compose some calm reflections on Early Warning’s acquisition of ClearXchange and that I might be some time, because I needed a way to portray bank consolidation and an attempt to stay in control of the underlying platforms for future commerce in a funny way. But Howard was already heading down to the bar with a blonde, so turned and went through the door with the initiates.
I went in and sat down under the watchful gaze of Illuminati puppetmaster Bruce Parker. The guy opposite me said, with a hint of a Czech accent, “What is your favourite payment mechanism?”.
Wow. That set me thinking. On the one hand, I’m very fond of the Mayan cocoa-bean mechanism of exchange that was in use in from pre-Aztec times through to Central America in the 19th century, which had the particular merit of having a kind of demurrage built-in, because the beans were unsuitable as a long-term store of value. I took another sip of the rum-based rocket fuel had put in front of me.
On the other hand, I started to think, I do have an enduring fondness for the stone currency of the island of Yap both for its role in Milton Friedman’s well-known treatise and for its resurgent role as a narrative mechanism for introducing the concept of Bitcoin to people with no knowledge of mathematics. Damn.
I really didn’t know what kind of answer he was looking for and I didn’t want to show any kind of weakness or hesitation. I needed them to believe I was an insider, a payments yogi. I took a sip of rum and I said “Apple Pay, but only in a terminal that says Android Pay, because I don’t follow The Man’s rules.”
Then I thought I’d better try to make conversation so I asked him, how about you? “ELV” he told me, which I think gave away more information than he wanted to. While still trying to figure out what this payments state-within-a-state was up to I realised that I wasn’t sitting up any more and that this might not be the kind of behaviour expected of a gonzo consultant.
“Transparency is the new black”. I don’t know if I thought it or said it. I adjusted my posture, and sat up at the dinner table to pay attention. That was when the cherry Mescal arrived. Game over man.
Things turned nasty. I’d hardly finished the next gin-based cocktail before someone started going on about Nasdaq and the blockchain.
“A blockchain”, I said.
“Yes, that’s what I said” the guy told me. “The blockchain”.
“If you don’t know the difference between the blockchain and a blockchain, then you are a blockhead” I told him and started sniggering uncontrollably.
It went to and fro. Circular. Going nowhere. So Jonathan Levin asked me draw it on the back of a napkin. So I did. And here it is. A bit crumpled, but can just make out the scribbled replicated distributed shared ledger taxonomy. Or reptile disturbing seared dodger taxidermy, if you’d prefer.
Meanwhile, news had filtered through that Nasdaq were in fact launching a new platform for trading shares in private companies. Goddam. So now it’s a blockchain, not the blockchain. The Man was in control. I thought the blockchain was going to be the LSD of this generation, freeing their minds and opening up new ways to run the world outside the bounds of the senile oligarchy presiding over our corrupt corporatist nation. Damn The Man. “No!” I shouted. “This bar is permissionless! Get me a gin and tonic!”.
Later, much later, I was having a very pleasant conversation with the guys next to me, swapping stories ago getting pulled over by the cops in different states in different circumstances when I saw the shadowy figure of the reclusive Shamir Karkal over at the bar. So, I started thinking to myself, I think someone is pulling the strings here…
“I’ve got to go, Bruce!” I said and stood up to leave only to find myself face-to-face with the Tapas Madonna. Her bright red lips were the focus of my entire world and the cascades of black hair falling to her shoulders were a frame for the kind of transcendental beauty that you can only see when you have been awake for pretty much an entire day.
“Make a distraction and I’ll follow the entrepreneur” I whispered…
“Would you like the last sea urchin roe on toast?”, she asked me.
“I didn’t want the first one” I replied, and walked towards the exit as if I was on slow-mo.
The Republic of San Marco
Howard told me to get down to the hacker phone (at least I think that’s what he said) in the ballroom and see what the kids were up to. I can’t say that I know what a hacker phone is but it sounded like the sort of thing I would enjoy because it was time for a change. I figured that I would be able to blend in, but he wouldn’t.
“As your Director of Innovation,” I told him, “I advise you to stay upstairs with the legacy minds”.
Off I went. As I made my way into the vast, cavernous ballroom, I saw the unmistakable figure of the Energy Magnet. Try as I might, I couldn’t stay away. His French charm and droll Gallic wit drew me in. The frenzy of coding (yes, I saw kids, hunched over keyboard, typing in strange languages) began to recede and a strange calm settled over us.
I awoke to find myself in 19th century Venice, in the Republic of San Marco, where I am responsible for organising the defenders against the invading Austrian forces. The prolonged siege by the invading Austrians has led to shortages and privations inside the walls (for example, only one flavour of Häagen-Dazs was available during the afternoon break) but the morale of the people remains strong. Field Marshall Radetzky is at the gates with cannon, but I am sure our gallant leader Daniele Manin, restored as the President of the Executive Power will see us through. I walk across to bridge over the Grand Canal and urge our men to remain strong.
One of the key issues for a consultant is how to be where the action is. How to tweet to where the puck is going to be. The hallmark of a gonzo consultant, though, is to be the puck that people want to tweet to. This means working out the right place to be at the right time, being an expert in conference calculus. Working out where is something going to happen and the selecting the trajectory to get you there.
After prospecting the prospectus, I set off and hit Twitter gold at the great Bitcoin / Blockchain face-off.
No-one was talking about Bitcoin much, as far as I could see. Man, I feel sorry for those guys. Everyone was talking about the blockchain. Real businesses. Wall Street.
I followed some of the Bitcoiners down to the trash and helped them ditch their placards. “End the Fed” said one of them. “Hey Hey EMV, Don’t You Stick Your PINs In Me” said another. “Fractional Reserve Banking — Nein Danke” said another, showing that the Europeans were in too. I broke another useless outdated placard in half.
“What do we want!” I shouted, trying to raise morale
“A means of exchange suited to the online world and a store of value independent from nation state control and monetary policy established by democratically-elected governments” they shouted back.
“Why are you jumbling these things together?” I shouted. Nothing.
Then I followed them back to a huge room where there was a discussion about Bitcoin going on. Somebody onstage made a comment about the concentration of Bitcoin hashing power in the hands of Chinese miners, whereupon an actual Chinese miner with rigs in China, Mongolia and Tibet (accounting for around 10% of total network hashing power) came to the microphone and made an impassioned plea for miners outside China to pull their fingers out and start doing some proof of work. His point was well made. So long as the majority of the hashing power remains in these pools, the Bitcoin blockchain will remain unattractive for a great many mainstream industries and this is not in the interest of Chinese miners since they are expending a lot of effort producing Bitcoin and want the price to go up.
There was no competition for the prestigious award of the prize for the best question from the floor. He had won hands down and there was no point waiting until the end of the event to deliver the trophy. I found the gallant miner and after a short speech of approximately 75 minutes in which I ranged eloquently across the arguments for double permissionless ledgers such as Bitcoin versus permissioned ledgers where mining incentives might be withheld (and made a few especially telling points about the wide range of potential incentives in the latter case), I awarded Chandler Guo the magnificent Toast D’Or.
After handing Chandler his trophy, I set off find some of the Bitcoin visionaries so that I could put an arm round their shoulders and talk to them about the death of their dream. It was then I noticed Doctor of Journalism Michael Casey so I decided to go and put an arm around his shoulder. He was like “double permissionless” and I was like “permissioned” and then he was like “double permissioned” and I was like “permissionless” and then he was like it’s the “Age of Cryptocurrency” and I was like but “Identity is the New Money”. Yeah, well, just because you wrote a book about it doesn’t make you all that, one of us said.
It was at this point that I got the message from headquarters. It said that I was to go urgently to cover an Innovation in Payments convention down in Irvine California and that it would be on expenses. It was time to leave The Venetian. I showed the invitation to a few people of note, one of them also being a Doctor of Journalism.
“No way,” Bailey said, “I’m going to that convention too! Why don’t you join me in the Great Grey Manatee and we’ll make a road trip”.
“I’m in”, I said, and set off to tell Howard, but he had already packed his bags and left to go east. I sent him a message. “As your Director of Innovation, I advise you to meet me in Boston on 17th November at MIT”.
Dreams of Chip and PIN
Sitting in the ballroom, watching this whip smart Irish guy Collison. “EMV will be irrelevant in 3–5 years; NFC can do everything it does” said his guru. So when I was saying tokenisation is bigger than chip and PIN, no-one cared. But now this guru says it, it’s the news. Life. Anyway, Collison nodded and started talking. He said that the blockchain people don’t spend enough time thinking about problems that businesses actually have.
I’m sitting there watching and thinking that the kid’s a bona fide genius. Don’t see so many of them, so I’m enjoying watching him. He hasn’t just kissed the Blarney Stone, he’s fathered it’s quintuplets. I was fixed to the spot. Fascinated. Most impressive person I saw up on stage the whole week. Year, maybe.
I went back to thinking or saying that that whole NFC vs QR thing is a Red Herring.
“Are you sure it’s not the Elephant in the Room”, said the guy sitting next to me. “No,” I said. “That’s Ganesha. He’s helping me with my writing”. I don’t know how he feels about herrings of any colour.
Just then some good news arrived. My Simple card was ready for us in Apple Pay. That will come in handy for the expenses, I thought.
I couldn’t see much of the savage heart of the American payments system in the ballroom so I set off to see if I could find NFC replacing EMV. I jumped into a cab and off we went. As the cab pulled up down by the Golden Gate I fired up my Apple wallet and there it was RIGHT IN FRONT OF ME: NFC not EMV. “Cash or credit” the screen in front of me asked. I mentally reinterpreted the terse instruction as cash or physical payment cards issued by international schemes or their members and including prepaid, debit, credit and charge cards, other via magnetic stripe or RFID interface, or virtual versions thereof accessible via an NFC interface in a smart device.
I didn’t choose cash.
When the terminal lit up I tapped my iPhone against it and go out to leave. “No, man” the driver said, pointing at the terminal, “you gotta sign”.
Oh right. “You might have told me that the terminal does not support a correctly implemented CDCVM cardholder authentication method” I might have said, or thought. I imagine it’s because the terminal doesn’t support EMV transactions, only contactless magnetic stripe. Long way to go.
I was sufficiently concerned to place an emergency call to my own guru, Brian Rommele. I told him I dreamt about the elephant in the room and the red herring. “What does it mean?” I asked him. “I need a quick diagnosis and a chemical prognosis”.
He meditated for moment and then said “The user experience is a train wreck. But don’t worry about. Mobile phones will route around the damage”.
Also I might have said, or thought, that using EMV is a good idea, because of standards like that, and whether you are using it via NFC, BLE, IP or ISO7816 doesnt really matter.
I took the little stylus and wrote “Sergio Lionel Kun Aguero del Castillo” on the screen. “No, no” the driver told me. “It’s over $25 so you have got to sign here” and he handed me a piece of paper and a pen. So I wrote “What. A. Waste. Of. Time. And. Money” on the paper and set off to find my date.
I thought the best way to attract a woman in Las Vegas would be to wave money around in a peacock-like display. So I made with a Benjamin and headed towards the brightest lights I could see. Unfortunately, I’d already had my first gin and tonic so things were starting to look a little blurred.
Well that didn’t work. Howard said we should go to the casino and drop some serious money. I told him that as his Director of Innovation, I recommended blackjack. So off we went. We found a couple of seats next to Bill and Ted and watched them drop $500 in like ten minutes. “Oh man, oh man”, Bill told me. “my gut feeling is telling me that this is not going to be my night.”
“You know what else is telling you that” I told him, “the laws of probability. You just hit a 13 against the dealer showing the five of spades. What did you think would happen?”.
He was teaching Ted how to lose some more money when I started to hit it big. Before I knew it, I was $20 up. I gave $10 to the dealer gal and $10 to the drinks gal and walked out into the morning light. “Fancy a drink”, I heard a SIM Siren call, and I turned around and went straight back in.
Time to get some more money. The preferred system was the familiar stripe, PIN and thumbprint system. Tried and tested. We grabbed the cash and went back to the tables. She has been up for 24 hours straight, and that sounds fun but I crack after 23 hours. I tell her we have to go, but she’s having fun, Howard’s having fun, Jake’s having fun. Bill and Ted have left.
“Please” I tell her. I explain to her that the hallucinations are getting worse. I’m seeing crazy things. Hearing them too. “You gotta fight, for your right, to paaaaaartttttaaaeeeee” sings the guy on stage. People are flying over my head. “It’s over”, I tell them. I just can’t do it. Twenty three straight hours is my limit. I’m not a young man any more.
I woke up and went to look for Bailey. I called her cellphone. “What should I do!” I yelled to her over the casino din. She was in Henderson, giving a talk about how you should follow your passion and act on it. “Follow your passion”, she said, “and act on it”.
OK, I told her, I’m going down to the Strip.
“That’s good” she said, “What are you going to do?”
I told her that I was going to see if there was any variation on chip authentication times between different acquirers using the VX520s.
“Stay there” she said, “I’m making an intervention”.
The Manatee was in front of the hotel in half an hour. I got in and settled back in the seat. I thought the engine was talking to me. It was saying “get processing options” over and over again.
I’m crashing. The lights of the oncoming cars have become hypnotic and dissociated from their mundane roots. My eyes just won’t open. I think she is telling me that she wants money to go tripping. I’m telling her about the fight between the Red Herring and the Elephant in the Room. “You’ve got to help me,” I pleaded. “Get me to a Denny’s, and quick. I mean, emergency quick.”
The breakfast physician triaged us into a booth. I kept my head down. My plan was to order crystal meth but I ordered a pot roast instead. When Jesse Pinkman’s crazed uncle delivered it, I ate it as if it were nectar. She had the chicken fried steak and we climbed back in the Great Grey Manatee to head out of town. First we need some gas…
With The Money 2020 fading behind us we finally came to the savage heart of the American payment system. The gas pump has a card swipe so I use my AMEX card, which has chip that the pump doesn’t use and a contactless interface the pump doesn’t use. The pump asks me for a ZIP Code, but it’s a British AMEX card so it doesn’t have one. The only ZIP Code I can think of is 90210 so that’s what I punch in but the pump says that it’s invalid and so the transaction is cancelled but not before a message pops up on my iPhone telling me that I just paid $99 for gas. So I go in and tell the cashier but I don’t think he speaks English, or at least the Queen’s English, and appears baffled by my genuflections and pantomime EMV dip. It’s clear he has no idea what chip and PIN, chip and signature, contactless, in-app, Chase Pay or NFC is. I take out my Simple card.
“How much gas do you want?” He asks me. I have no idea.
I look over at Bailey standing by the Great Grey Manatee and I guess “$30?”
So that’s what he rings up. I swiped the Simple card in about a tenth of a second and the POS asks me for my PIN. I punch it in and walk back outside. Bailey hangs up a call and we climb in and move off.
“By the way,” she says as I fiddle with the seatbelt, “it’s tan”.
We were somewhere around Barstow on the edge of the desert when the coffee began to wear off. I remember saying something like “I feel a bit lightheaded”, but then I always do after The Money 2020.
See you all next year.