Jeff Russell CIO/VP of The Members Group at the 2008 Partnership Symposium

Jeff Russell of The Member's Group just finished his session on the future of payments.

Here are some Highlights.

People have things that they want to sell and there are people that want to buy them.

What roll do we play in that transaction.

If we don't pay attention to our roll as intermediary we have no right to be the intermediary.

The primary driver of payment convenience is however the people choose to interact.

Check usage is dropping by up to 18% each year.

There has been a digitalization of life. We don't need a physical instrument to move money.

Does anybody really want a card, or do they just want what it buys. "I don't want a hot water heater, but I want hot water."

18-24 year olds write 1.6 checks per month. Only 44% have written a check in the last 30 days.

Tomorrow's members may never have a checking account or even know what to do with the checks.

The mobile channel is key. Text message banking, the shift of online banking to mobile platforms and the ability to transact on a mobile phone will be a growing driver of payment systems.

Paypal is betting that some years down the road, mobile will be the big method of payment for consumers.

The current mobile payment system is a closed system. When will it be open.

2009 MasterCard will allow P2P transfers. Visa will launch a P2P payment system this month.

New model for payments is location based, knows your preferences, and automates the payment process via the exising mobile infrastructure without physical currency or a card changing hands.

The mobile phone is no different as a payment instrument from a mag-strip card.

Implications

• Define your own payment strategy.
• Stay on top of new trends.
• Look for collaboration.
• What do we do about the loss of interchange income?
• What's our role in the future of payment processing?