Payment Companies Embracing a New Way in Digital Pay

Phil Schwarzmann

IMG_5908Equinix Vice President of Digital Payments, John Knuff, hosts the Interdependence Day panel.

The opportunities are big in the digital payments business, but the industry is complicated.

Ovum projects that by 2018, nearly 5 billion people worldwide will be using mobile payments, and every single one of their transactions will require instantaneous, secure interconnection between multiple parties in separate ecosystems to meet customer expectations for a smooth experience. Last month as part of the Interdependence Day speaking series, Equinix and the Business Development Institute brought together representatives of several of the ecosystems that need to collaborate to make digital payments happen.

The panel was moderated by our digital payments guru John Knuff, Equinix’s vice president of global ecosystems. We spoke to him about the audience, their top issues, and some of the insights the panelists offered:

Can you talk to me a little about the audience and what they were most interested in?

It was a business-oriented group from various companies in the digital payments industry ̶̶ ̶ payment processors, banks, mobile wallet companies, business-to-business payment companies. They were mostly senior thought leaders with a stake in their company’s strategy for moving forward, and they were looking for ideas. The Equinix model was new to them – the idea of being able to colocate infrastructure and peer with partners inside a facility, in a campus environment. They were beginning to understand the model could help them deliver a very streamlined digital supply chain for their products, and that all the banks, the networks, everything they need is on the same campus, and they can interconnect with them.

What’s happening in the industry that has people thinking about how to do things differently?

The APIs have opened up these new relationships between companies, which are creating interdependencies between companies to deliver a product. The beauty of APIs is that they are easy to implement, since the companies make them available via the public internet. But once these companies reach hundreds of thousands or millions of transactions, they realize that relying on the internet for these connectivity relationships with critical vendors isn’t a way that they can scale their business. They just can’t deliver a good end user experience, especially when this interplay between companies has to happen in real time.


So the discussion was, “How do I take advantage of what Equinix does to create a robust, secure global platform?” And they were asking some of the key companies (on the panel) who’ve done this why they aren’t choosing the traditional route of going out of the MPLS network. Instead, they’re establishing these points of presence inside Equinix and creating a new model that hasn’t existed in this space previously – basically fast, secure, direct connection to partners on the same data center platform. Just as we see the largest cloud providers creating local points of presence in dozens of cities around the world (they’ve earned the label of “hyperscalers”), we’re now assisting a handful of wallet providers, card networks and payment processors deploy in key global markets. I think we’ll look back at these pioneering industry leaders as the first hyperscalers for payments.

So there is a real emphasis on better collaboration, better interconnection with partners?

Absolutely. And that’s really just the nature of the beast in the digital payments industry. One panelist noted that for every single digital transaction, there’s probably a minimum of four to six companies involved. People know it’s no longer feasible to try to build entire solutions yourself. Companies that are agile in the space are specializing and interacting with companies in this space to create kind of an end product. No one who is winning in this game is trying to do it from end to end.

Some of the panelists did share what’s working for them. Can you talk a little about that?

It was interesting because you had companies coming from really different places talking about very different experiences with the same interconnection model. You had a startup company on the panel that builds mobile wallets for merchants that needed to build up network connectivity to their end points, and they said, “Let’s go to Equinix.” They know we’ve got the cloud provider they began with and that some of their key customers are with us already. They know they can take advantage of our ecosystems and our global reach to build up their network in a cost-effective way.

Another company on the panel was coming from a different place. They talked about being deployed with us globally and establishing the edge model. This company is expanding its base of partnerships in the industry, while at the same time integrating several different acquisitions. So, for instance, by bringing an edge node into one of Equinix’s dense financial ecosystems, they saw they could interconnect to the banks inside Equinix right there, instead of trying to get those banks to provide long-haul circuits back to their original data center locations. You’re talking about installing a cross connect in one day inside of Equinix, as opposed to trying to get a circuit completed in 2-3 months. And they could also use this edge node to be an on- and off-ramp for all of their products, including from companies they have acquired. So the Equinix model worked for them. It brought them right next to the partners they needed.

Read this Equinix white paper about the evolution of non-cash payments.

Enjoy these photos from the event: