Let's say you and a group of your friends have decided to go to tonight's concert and you've found a great deal online. What does the payment process look like for everyone? This is one of those classic situations where multiple consumers need to make a single transaction with the vendor. There's definitely room for improvement here, and in my recent experiences, we're starting to see some of those improvements come to fruition.
Whether it's a musical, concert, or a sporting event, we want to sit together as a group of friends and enjoy it together, ticketing systems need this to be a single transaction. Of course, it might not be an issue for some people. If there are eight people total and it costs $150 a ticket, you might have a friend who's willing and able to front $1200 on his credit card. Then, everybody will give him the cash, which he has to carry around for a night and feel pretty nervous in the process.
Wouldn't it be great if we could split the payment during that one transaction between all the individuals that are involved? I think this is one of those scenarios that we talk about in terms of people wanting to spend money and make transactions in a way that suits their needs and not in a way that suits a ticketing system.
Just recently, I had an experience of buying some concert tickets with friends where we had the option to enter multiple credit card numbers. Now, that's going through an existing payments network that would involve multiple payments taking place. From a ticketing perspective, I guess that's one transaction on their end for that block of tickets that we were acquiring. However, I start to wonder what would happen in this situation if one of those card payments fails. What would happen to that block of transactions?
You don't want to end up in a situation where you're in a half-pregnant phase. What if someone in your group of friends drained their debit card for some reason and they need to give you a different card number? You'd want to make sure that the entire transaction is either successful or not, and a failure in one payment would bring down all of them. You'd need a good understanding of where you stand in that situation because it's typically an atomic decision. Either yes, we're going, or no, we're not going (and we definitely all want to sit together).
We don't want to have multiple transactions. We want to make sure that nobody makes a transaction in-between us, making it where we don't all have consecutive seats. How do we get to that point? There are a number of options out there, but I think as we're evolving to the next generation of payment platforms, you'll see the emerging standard throughout multiparty transactions.
There are already some standards that I'm aware of in Australia that involve this capability. From a financial standpoint, the transaction involves more than two people and it can also involve non-monetary things. Let's say that I'm purchasing a car and the third-party in this scenario is the DMV. They are going to be involved in the transaction to do the title transfer the moment funds change hands. This is one of my favorite examples of multiparty transactions new standards can accommodate.
The big question here is when these standards will be widely adopted. We're just seeing North America jump on the EMV bandwagon, and that's really because the industry regulators have avoided the cost of change for some time. It's got to the point where fraud levels have become unacceptable. I think what's going to happen here is the next wave of payments in North America, Europe, and Australia is going to focus around real-time settlement, having data-rich transactions, and multi-party, non-monetary transactions as well. The thinking behind it is certainly underway, but the rollout to adoption is still some time off. It's probably going to be another case where regulators mandate things like near real-time settlement to drive the next wave of change. More than likely, I think it's another five years away.
