Payments innovation is keeping consumers safe

Convenience and security.

When it comes to payments, this is what the average consumer cares about: is it easy to make a transaction, and is my money and data safe?

{mosads}While Silicon Valley start-ups, block chain geniuses and entrepreneurs may generate buzz with the VC crowd, the financial services industry continues to be the engine driving the future of payments because the system simply doesn’t work if it isn’t safe and secure. 

So we have to ask ourselves two questions—how do we innovate, securely throughout the entire payments chain, and how do we bring those secure innovations to scale?

Today (or was it yesterday?), we sign our names to endorse checks or punch in a static PIN at an ATM.  But yesterday’s technologies are just that – outdated.  The next generation of methods for consumers to identify themselves will be ubiquitous soon enough: thumbprint biometrics, voice recognition, gesture recognition, and even authenticating the identity of a person by listening to their heartbeat. Some of these technologies are already quickly coming online to the masses and the financial industry is the only way to bring these innovations to scale, safely and securely.  

In a few weeks, the American payments system will hit another inflection point, signaling a shift to more secure payment cards.  By the end of the year, most consumers will be equipped by their bank with new and highly secure chip-enabled credit and debit cards.  This technology will play a key role in securing the point-of-sale from the type of fraudsters that perpetrated the breaches at Home Depot and Target.  

While adding an extra layer of security for in-person transactions is helpful, more and more business is moving online and mobile.   The financial industry is driving the adaptation and development of tools, like tokenization, that are making this possible.  A great example is Apple Pay.

My iPhone 6 by itself is great.  My iPhone 6 storing a token that renders my sensitive payment information useless were it to be stolen, checking both boxes of convenience and security, is even greater.

This impossibly rapid evolution of the payments system is only occurring because of the decades of innovation and investment by the financial industry that has taken us from cash, checks and static PINs to technologies that only a few years ago were the stuff of science fiction.  And it all makes for a better and safer user experience.

As policymakers in Washington watch the rapid evolution of our payment system, we hope they will work with us to keep the system safe for everyone, at every point in a payment’s life.

It’s no accident that America has the most vibrant and innovative payments system in the world, and through ongoing investment and continued technological advancements, the financial industry ensures that U.S. consumers stay in the drivers’ seat.

Kratovil is vice president of Government Affairs for Payments at the Financial Services Roundtable.