David Wolman is author of The End of Money
Thinking about money and security, a jumble of anecdotes come to mind—plus one Tom Cruise quote. I’ll share a quick story here, and look forward to sharing others next month at MasterCard’s Global Risk Leadership Conference in Key Biscayne, Florida. Come to think of it, we won’t be far from Cuba. But I digress.
A few years ago, a banker told me about a robbery at the branch he managed. Being held up at gunpoint is nothing new for a bank; worldwide, that happens thousands of times a year. No one was harmed in this case, thankfully, but the police still had to cordon off the building to conduct their investigation.
While standing in the lobby dealing with whatever post-holdup things bankers have to deal with, the man noticed an old woman gently knocking on the glass front door. He met her there, unlocked the door, and explained what had happened. “There’s nothing to worry about,” he told her. “The bank will reopen just as soon as possible.”
The woman asked only one question: “Did they get my money?”
It took the banker a few moments to comprehend what she meant, after which he politely reassured her that no, the thieves didn’t, and essentially couldn’t, get her money.
We sometimes forget that this is the starting point for so many people, that most users of money don’t know, or have never paused to consider, the digital reality of most money. Even fewer people stop to cogitate on the completely faith-based value of currency (cows notwithstanding). For one thing, it’s unsettling, as The Onion reminded us a few years back with this lovely parody involving Ben Bernanke and a cigarette lighter. It’s also just so heady, all that nature of money and machinations of commerce business. Let the economists have a field day with it if they want. The rest of us are too busy trying to earn a living and getting the kids to bed.
But some of these very baseline aspects of money and public perceptions about it could have a major impact on transaction innovation. Because while all of you are down there in the weeds, striving to increase security and reduce risks (and thank goodness you are), risk’s nasty twin, perceived risk, can cause a boatload of trouble in its own right. In this age of incredible fintech invention, reengineering, and experimentation, we need to keep in mind that perceived risk, if not handled carefully, could delay or even halt the adoption of new technologies that otherwise could have improved prosperity for businesses and households alike.
A run on a bank is a classic illustration of the hazard posed by perceived risk, but here’s an example more germane to this discussion: As you all know, mobile wallets are more secure than tactile ones, thanks to tokenization and authentication requirements. Yet a survey from last year found that just 1 percent of respondents felt safe about third-party mobile payment services like Apple Pay or Google Wallet. I’m the last guy to doubt the wisdom of consumers, but it does appear in this case that consumers have it backwards.
And that’s understandable. Mobile payments are still new, or pretty new, to most people. Besides, trepidation about new technologies is as old as innovation itself—and will often wear off. But what if it doesn’t? Or what if a few episodes of fraud become distorted by the media to such a degree that they catalyze the impression of high risk where there is in fact only a small one? As I see it, this kind of study serves as a worthy reminder that when it comes to payments and transactions, or even the future of money in general, psychological forces cannot be overestimated. Put another way: We really do have to talk about our feelings.
Think of it like that line from the movie “A Few Good Men,” but in reverse. Tom Cruise, playing the hotshot young Navy layer and getting all up in Demi Moore’s face, barks: “It doesn’t matter what I believe. It only matters what I can prove!” When it comes to fintech and getting the public on board, it doesn’t (only) matter what the engineers can prove. It matters what the people believe!
The other takeaway from studies highlighting irrational concerns or behaviors is that new technologies won’t win the day without thoughtful communication. (Yes, of course I’m biased. But I’m also right.) Smart, persuasive, story-driven communication about transactions and the tools securing them need to speak not only to CFOs who worship at the altar of homo economicus, but also to the everyman, in all his frail, irrational, and confused glory. People like that woman standing outside the bank branch, worried about what had happened to her money.
