Q: What’s next for money? A: Interconnected Commerce!

John Knuff


Money has always changed with the times and developments in technology.

For example, China’s switch from coins to paper money in 600 B.C. was driven at least partly by improvements in papermaking. By the time the European explorer Marco Polo visited the country in the 13th century, printing technology was making its presence felt. So much so that where US banknotes today say “In God We Trust,” the Chinese imperial notes allegedly carried the threat, “Counterfeiters will be decapitated.”

Today, the way payments are made is changing faster and more fundamentally than at any time since the invention of money. And it is again being driven technology. Specifically, by the imminent and explosive arrival of the interconnected world.

It’s a real and increasingly visible phenomenon. For example, smartphone penetration is becoming almost universal in G-20 countries and web access worldwide continues to grow at a staggering rate. Over 42% of the global population already has Internet access, and pundits predict that it will approach 100% by 2020. 2

That picture has serious implications for commerce: especially in the Asia Pacific, where mobile and online commerce is exploding even faster than in any other region, according to our recent whitepaper “Interconnected Commerce – A Revolution in Value Creation”.

Creating an Interconnected Commerce Ecosystem

While the current payments ecosystem is robust, stable, reliable, and mature, it lacks flexiblility, fluidity, and extensiblilty. But one thing is becoming clear: while the core payments processing system is really good at payments, it’s not very good at much else.

Leaders in several different payment organizations have begun discussing an interconnected commerce ecosystem for services that support payments and commerce.

The rationale is that, before the introduction of a common protocol, smartphone development was limited to specific devices networks. However, since the arrival of open platforms, smartphone development has exploded, and now millions of apps work across the major mobile platforms.

In much the same way, an open commerce platform supporting commerce and incorporating payments is a logical next step in payments evolution. As currently envisioned, the interconnected commerce platform would be a network of companies, processes, and systems connected on a common, open network.

The network could provide a wide array of capability to every participant in the ecosystem, linking to online and offline commerce, the IOT, mobile service providers, small-to-midsize- business services companies. Connecting to any organization where the effective delivery of products and services enabled by commerce and payments has value, whether that might be healthcare, insurance, hospitality or professional services.

And, just like payments, the commerce ecosystem would benefit from the network effect – creating incremental value with every additional node.

The Roadmap to Network Nirvana

The implementation of this vision will require a cooperative effort from participants across the ecosystem, working with organizations capable of developing and managing a network of millions of nodes and billions of connections.

A “meeting place,” a central hub that can interact with and manage access to the disparate platforms and systems, is also needed. While the potential of interconnected commerce is powerful, without a central hub to manage the network, the result would be chaos. The vision also requires standard protocols that allow systems to communicate with each other.

The effort could be led by small group of companies across the commerce spectrum: network service providers, merchant acquirer/processors, hardware and software developers, issuers, and other organizations.

For example, Equinix is already providing dense interconnection points where enterprises and their service providers physically meet to efficiently exchange data.

Like international airports, which serve as neutral connection points that allow airline carriers, retailers, restaurants and other service providers to compete for business, Equinix provides neutral interconnection points where telecommunications organizations, cloud-based service providers, and enterprises come together to efficiently exchange data.

It’s a complex undertaking requiring significant resources and time to implement. However, the benefits could be world-changing, creating a network of commerce enablement that, linked with the payments infrastructure, could actually redefine global commerce for the 21st century.



John Knuff
John Knuff General Manager, Global Financial Services