Unlocking the payment experience: Future imaginaries in the case of digital payments

Abstract

This article explores sociotechnical imaginaries of digital payments. Drawing on a decade of reports from industry consultants, the analysis of stories on digital payments identifies three sociotechnical imaginaries that shape the banking and payment industry: data monetization, the growth of digital payments, and the payment experience. The article argues that these imaginaries have contributed to the banking industry’s move toward becoming payment platforms, which restructure financial services based on a “re-personalization of money.” In effect, digital payments play a central part in the current economic transformation, led and promoted by global tech giants, that builds on the tracking, production, categorization, and classification of digital data. The article zooms in on recent and current expectations and imaginaries in the banking industry that, in the short run, shape economic decisions, while, in the long run, are set out to change how people interact, and how they are tracked, scored, and categorized.

Keywords

Data monetization digital payments industry consultants payment experience stories of the future

We are currently witnessing an unprecedented increase of new financial services. When paying at stores, we can now not only choose between cash, credit, or debit cards, but we can also pay using apps on our smartphones. Apps for digital payment promise us customers to ease and to enhance our lives: they keep track of our spending, offer us discounts, help to reduce or completely eliminate the time we spend at a store’s check-out. Their use is significantly transforming how we shop and pay for our purchases. Apps, platforms, banks, and retail companies, which enable such digital payments, track and collect those data points for security as well as profit-making purposes. Thus, an inquiry into digital payments not only offers insights into changing everyday economic activities. It also presents a pivotal case of how we are becoming digital citizens.

This article systematically explores how professional evaluators, in this case, banking industry consultants, view, interpret, and shape developments in the world of digital payments. The inquiry thus takes the particular perspective of consultants in making sense and narrating expectations of the emerging field of digital payments over the past decade, in order to obtain better insights into how they envision and construct the future. These expectations have a real influence on decisions and actions in the present while they motivate, organize, and coordinate action oriented toward the future (Beckert, 2013, 2016; Mützel, 2010). In tracing such stories of the future, the article identifies three sociotechnical imaginaries that shape the banking and payment industry: data monetization, the growth of digital payments, and the payment experience. The article argues that these imaginaries have contributed to the banking industry’s move toward becoming payment platforms. In turn, this move has restructured financial services based on the re-personalization of money. The article concludes that digital payments play a central part in the current economic transformation, led and promoted by global tech giants, that builds on the tracking, production, categorization, and classification of digital data.

The article proceeds as follows: The first section introduces digital payments and their pervasiveness around the globe. The article then discusses sociological concepts on payments. The third part introduces the analytical frame of stories of the future to capture expectations and imaginaries. The next part analyzes 11 reports from industry consultants from 2008 to 2018. Based on a qualitative text analysis, it traces the stories of the future and carves out three imaginaries on data monetization, the growth of digital payments, and the payment experience. In a fifth part, the article shows that these payment imaginaries, embedded in a platform economy, have contributed to driving the digital economy toward the re-personalization of money. The article contributes to a growing field of social science scholarship on the role of platform and fintech innovations in shaping people’s everyday lives and their interactions with others. In particular, it points to the salient role of future expectations and imaginaries in shaping the “payment experience.”

Digital payments

The use of personal, electronic device–enabled payment possibilities differs vastly around the globe according to cultural–institutional and demographic contexts. For over a decade now, mobile payments via text messaging services have been widespread in some parts of the worlds. For example, in Kenya 97% of all households use M-Pesa to transfer money from one mobile phone number to another, in effect allowing money transfers for those who do not have access to bank accounts (Jack and Suri, 2014; Suri, 2017).

In China, India, South Korea, Japan, and also in Finland and Sweden, over 60% of all payments are currently conducted using digital payments (Capgemini, 2018). Digital payments refer to transactions conducted using a smartphone at a point-of-sale, for example, a kiosk terminal or another type of small device, via an app using near-field communication (NFC), a QR-code or blue tooth–based transmission—allowing so-called “contactless payment” or “tap-and-go payment.” These user-enabled apps are connected to banking instruments such as direct debits, credit cards, or online value accounts and allow for immediate payment and, more recently, for instant consumer loans (Ash et al., 2018). Using the technological and social infrastructure of social networking platforms and the giant tech companies behind them, digital payments are particularly ubiquitous in China, where more than 700 million people use Alipay (Alibaba) or WeChat Pay (Tencent) to pay using their smartphones (statista, 2019: 9). Elsewhere, the app Swish, backed by main Swedish banks, is widely used in Sweden, a nation on the verge of going cashless in retail purchases (Sveriges Riksbank, 2018).¹ Yet, adoption rates of digital payments vary widely across Europe, with German-speaking countries particularly hesitant. Currently, almost all global tech giants, that is, Alibaba, Amazon, Apple, Baidu, Facebook, Google/Alphabet, Samsung, and Tencent offer unique digital payment options for everyday retail transactions. Market research expects a sixfold increase of the global digital payment transaction value from currently US$532 billion to over US$3100 billion within the next 6 years (statista, 2019: 4).

Payments: infrastructures and digital data

Payments have been studied in economics, sociology, and anthropology. Seminal marketing research on mobile and digital payments has focused on trust, technological solutions, and the market for such payments, with the intention to optimize technologies (e.g. Au and Kauffman, 2008; Hampshire, 2017; Hillman and Neustaedter, 2017; Liébana-Cabanillas et al., 2018; Mallat, 2007) and their adoption by consumers (Dahlberg et al., 2015; de Albuquerque et al., 2016).

Research in sociology and anthropology has long shown that economic transactions are also social transactions within particular contexts, creating social relations (e.g. Granovetter, 1985). Money is a socially contingent phenomenon (e.g. Mizruchi and Stearns, 1994); it is incorporated into webs of personal and professional relations, where it gets earmarked as belonging to different categories, for example, for spending or saving; the meaning of money is thus tightly connected to social relations (e.g. Dodd, 2016; Zelizer, 1989, 1997, 2010). Studies on credit and debit cards and their everyday use similarly emphasize the de-atomized, social nature of money. They show that “plastic money” is at once more immaterial and more personalized and traceable than cash (e.g. Evans and Schmalensee, 2005; Guseva and Rona-Tas, 2017). Such perspectives thus present alternatives to the rational, atomized market exchange of goods and services of economic and sociological classics.

Money as a currency for economic exchange has received much scholarly attention (e.g. Baker and Jimerson, 1992; Carruthers, 2010; Maurer, 2006) including old and new alternative currencies (e.g. Dodd, 2018; Evans, 2009; Ferreira and Perry, 2019). The act of payment, however, exists independently of the type of currency. Payments are one element of an economic exchange and refer to the form of transaction. An exchange requires a calculation of value, for example, on the basis of a price, between exchanging partners. In a payment, value is transferred after such a calculation has already taken place. A payment thus sequentially follows calculation and encompasses the transfer of value. Moreover, from a sociological and anthropological perspective, payments are also fundamentally grounded in social ties: payments as forms of transferal create and define social relations between interacting actors and imbue interactions with meaning (e.g. Maurer, 2012, 2015; Zelizer, 1996).

For payments to take place, technologies of transfer are needed, including a diversity of things, from paper tokens and coins, to checks, plastic cards, and electrical impulses (Maurer and Swartz, 2017; Zelizer, 1997). Digital payments also require particular devices for checkout transaction, though no longer cards, type pads, or physical wallets, but rather “card networks, point of sale device manufacturers, payment processors, billing companies, wire services, application developers, mobile network operators, and government-mandated systems, too” (Maurer and Swartz, 2015: 223) that change the act of payment itself. Having previously enabled a payment option on our smartphone by connecting our banking information with a payment app, we now need to touch a button, enter biometric information, look into the camera, or wave the phone to pay for our purchases. To be sure, none of these technologies were intended for payment; rather they involve the adaption of existing infrastructures (Maurer, 2017).

Furthermore, these “things of payments” are more than mere technologies. They are “market devices” that shape the economy (e.g. Callon, 1998; Muniesa et al., 2007) because they produce and collect essential elements of the digital economy: digital data. In addition to the actual transaction and its associated cost, retailers, banks, and other intermediaries benefit from digital data because they are key for data monetization. Just like social media platforms (e.g. Gillespie, 2010), banking, credit, and payment apps track and log users’ personal preferences, time, and location (e.g. Deville, 2019; O’Dwyer, 2019). However, while banks typically have only access to senders’ account transactions, that is, where, when, how much was paid, non-bank regulated payment services can also generate data detailing the networks of connections between senders and recipients—and link those connections back to data points from online platforms and their ecologies. These large amounts of individually and relationally produced digital data points then are used in corporate analyses to yield aggregated and patterned preferences, for personalized recommendations, targeted marketing, credit scoring (Kear, 2017), insurances (McFall and Moor, 2018), and even prices (Moor and Lury, 2018). Certainly, monetary transactions and products purchased have been recorded and analyzed for many decades, yet the digital data produced in digital payments are “qualitatively and quantitatively different” than before (O’Dwyer, 2019: 8). Produced by users, sorted, analyzed, and sold for access by corporations, digital data have opened up new markets in data collection, data trade, and data analytics (e.g. Beer, 2018; Milyaeva and Neyland, 2016; Zuboff, 2018).

Research shows that the further use of such data raises great ethical concerns: even in aggregated form, they provide little anonymity (e.g. de Montjoye et al., 2015); the systems producing and storing such data are prone to leaks, theft, manipulation, and possible unintended re-utilization. New laws and regulation for the digital era are much needed (e.g. Crémer et al., 2019). For the people analyzed, results of data analytics, in particular, results of categorizations and classifications, may yield detrimental consequences of exclusion and discrimination (e.g. Campolo et al., 2017; Eubanks, 2017; Noble, 2018; O’Neil, 2016; Pasquale, 2015; Tufekci, 2015).

For individuals, these digital data profiles present a new, transcending type of capital, übercapital or eigencapital, that is, “a form of capital arising from one’s position and trajectory according to various scoring, grading and ranking methods” (Fourcade and Healy, 2017: 14) that “may converge to produce an ostensibly ratable self” (Fourcade, 2016: 190). As we respond to targeted offers and promotions, we become formatted, iteratively, according to our intermingled individual and relational choices, and their algorithmic calculations. This is at the core of the major shift toward a targeted, also so-called “personalized economy,” in which we see a re-personalization of prices: digitally, we pay a price according to our digital profile that is based on “individualizing and deindividualizing practices” (Moor and Lury, 2018: 502) of our individual and also relationally embedded choices. Analogously, such “individualizing and deindividualizing practices” of digital payments also contribute to a “re-personalization of money” (Moor, 2018). In the long run, new, rather opaque markets of optimization for persons and citizens may be developing, in which digital payments play an integral part.

Future imaginaries

This article argues that the sociotechnical imaginaries prevalent in the banking industry at times of an uncertain future helped to shape the current practices that have contributed to the “re-personalization of money.” To get at the development of these imaginaries, their shifts and drifts, the article examines the analyses, the recommendations, and future visions of industry consultants on the banking and payments industry, tracing them as they were happening. Consultants’ stories of the future help to shape how the world of digital payments has been and will be developing and, in turn, how we are shaped by the industry as persons and citizens.

As “promissory organizations” (Pollock and Williams, 2010, 2016), industry consultants observe and comment on what they see going on in the industry. They are integral for sensemaking and providing evaluations of the present, yet their analyses also provide bets on the future. Over the past decades, a transdisciplinary field of science and technology studies and the sociology of expectations has focused on such bets, as a driver for capitalism (e.g. Beckert, 2013, 2016) or in technological innovation processes (e.g. Brown and Michael, 2003; Brown et al., 2000; Jasanoff and Kim, 2009). One of the core ideas is that expectations are “composed of creative as well as willful foresight” (Mische, 2009: 697). These expectations may not become true; they may need to be adjusted as time passes. Yet, while being oriented toward the future, such “imagined futures” have a real influence on decisions and actions of involved actors in the present as they motivate, organize, and coordinate action (Beckert, 2016, 2019; Beckert and Bronk, 2018; Mützel, 2010; Pellandini-Simanyi and Vargha, 2018).

These expectations of possible future trajectories of action are narrated in the form of stories. “Expectations, and stories about the future in general, reduce essential contingency in a non-deterministic sense, by providing blueprints that can be used in action” (van Lente and Rip, 1998: 217). As such, stories provide a “narrative infrastructure,” that is, the “rails along which multi-actor and multi-level processes gain thrust and direction” (Deuten and Rip, 2000: 74). While the future is uncertain and unpredictable, past or present empirical evidence can be extrapolated into the future, because stories provide reason and rationale, interpretation and evaluation of what is going on—for oneself and for other actors. Such stories of the future, with their imaginations and expectations about what the future holds, provide orientation “despite the uncertainty inherent in the situation” (Beckert, 2013: 222). They do so by offering “convincing” accounts of the future, which are comprehensible and plausible, thereby momentarily “overlooking” and suspending uncertainty (p. 222). In doing so, stories of the future help to orient and motivate to act because their offered future seems plausible, believable, and desirable. Empirically, such future-oriented stories can be found in situations in which a field is undergoing changes and new practices, products, technologies, and actors are “emerging” and when it is unclear, which strategy amid this uncertainty about the future is best to follow.

To obtain insights into how the banking industry as a field copes with encountered uncertainty, this study analyzes prominent and publicly available industry consultants’ reports on the payment industry, using 11 Capgemini’s World Payments Reports, from 2008 through 2018. The examination of stories of the future on digital payments, along with the evolution of technological developments, focuses on one particular perspective from industry consultants, addressing the banking industry, from a global perspective. To be sure, the current perspective does not cover perspectives of other actors in the payment space, for example, customers, banks, non-banks payment providers, retail companies; however, it does allow for a first systematic, narratively grounded view onto the field.² Each year, the reports examine the status quo of payment transactions worldwide, present forecasts on developments, discuss key regulatory aspects, and advise banks on how to best position themselves in a changing field. The analysis presented here rests on a qualitative text analysis (Miles et al., 2013). All reports have been read multiple times and have been hand-coded according to codes conceived from the existing literature as well as from the texts’ own sensemaking. As a first step, the analysis reconstructs how the industry consultants themselves categorize payments over time. In a second step, the close reading of future expectations is sorted into themes, which resonate with current research.

Stories of the future in digital payments

Throughout the years analyzed, one thread of stories of the future tackles the question, what constitutes digital payments? What are digital payments about and what is at stake for the banking industry? In effect, consultants are involved in categorization processes of novel technologies and their usage, a process that develops in three phases: from fear to realization that banking infrastructure is still needed to current enthusiasm for digital payments.

Categorizing digital payments

Phase 1, 2008–2012: rising fears of competition

In the early years, payments initiated via a mobile phone are called m-payments. They consist of sending short message texts for a payment request, which is then billed by the telecom provider. At that time, m-payments are part of the telecom industry. Industry consultants view m-payments as a “prime instrument for low-value payments,” for example, in unattended environments such as parking lots or vending machines, “providing a more secure, less costly, and faster way to handle such payments” (Capgemini, 2008: 1). They are most prominently used in Japan. In other parts of the world, technological hurdles exist: only a couple “wireless operators” enable pay-by-text and only very few phone models are NFC enabled (Diop et al., 2008). In addition to payment developments in Japan, the 2009 report also points to bank and telecom mobile payment initiatives launching in China and India (Capgemini, 2009: 17).

By 2010, consultants’ expectations of a change in the industry become more pronounced: m-payments will “complement rather than substitute existing payment instruments and provide an alternative to cash payments” (Capgemini, 2010: 18) and in developed countries, the industry moves into a “formative stage” (p. 16). At this time, consultants begin to see banks and their traditional cash and non-cash payment services as challenged by both telecoms and so-called “alternative payment service providers” (PSPs), for example, Paypal, which allow people to keep money in a non-bank account. The consultants’ advice to the banking industry is to develop partnerships “while avoiding major investment in infrastructures and/or capabilities” (Capgemini, 2010: 38).

Banking industry consultants realize that “mobile is evolving as a ‘channel of channels’ and becoming a potent alternative to telephonic, Internet, cash and card payments” (Kumar, Pappu-Subrahmanya-Venkata, 2011: 5). “Know-your-customer protocols” to identify customers and to provide for security is key for the payment industry, yet in that regard many technological hurdles for a mobile use exist (Capgemini, 2011: 52). The much less regulated, non-bank PSPs, such as Google checkout, Amazon payments, and Facebook are “making the current payments universe more complex” (Capgemini, 2010: 3).

The 2012 report notes that smartphone and app stores are “game-changers” and have led to an increase in the number of m-payment users (141 million in 2011, Capgemini, 2012: 16). The report expects the introduction of NFC-enabled wallets for payments as the next most important step for m-payments to be “altering the overall payments landscape by enabling users to execute payments anywhere, anytime” (p. 29). Indeed, payments using digital technologies challenge banks’ status quo. Consultants advise banks to re-orient themselves toward customer-centric innovations since “non-banks, with new platforms and no legacy-system constraints, are leveraging unique business models to drive innovation around specific customer solutions to generate revenue” (p. 37). Although banks are less flexible and more regulated than new payment providers, they do have their customers’ trust and offer a variety of services (p. 37). Moreover, consultants suggest that banks can help retailers to drive personalized advertising and special offers by “gathering payments data from shopping histories” (p. 41). The report thus stresses the important role of customers for the banking industry, and the potential innovative ways to store, move, and analyze payment data for retailers.

Phase 2, 2013–2015: realizations

Capgemini's 2013 report starts out by responding to the confusion within the banking industry of what constitutes m-payments vis-à-vis e-payments. It offers definitions:

We define m-payments as a form of payment where the mobile phone is used as a payment method—not just as an alternative channel to send the payment instruction—and the payment information flow takes place in real-time. Such payments occur primarily across four applications (ordered by estimated size of volumes): peer-to-peer, consumer-to-business in retail stores using a payment application, and especially in Africa, business-to-business as well as business/government-to-consumers. (Capgemini, 2013: 14)

The report notes that not only the number of m-payment users has grown to 212 million in 2012, it also expects the numbers of m-payment transactions to grow, from 11.1 billion in 2011 to 29.2 billion global transactions in 2014 (p. 15). Despite such enthusiastic forecasts, the report calls for cautious optimism and argues that more reliable, statistical data are needed from non-bank payment providers, “unregulated non-banks,” and “unconventional players,” since “reporting standards for e- and m-payments suffer from a lack of clarity, challenging attempts to confidently estimate the true market size of these payment modes” (p. 18). The report requests “centralized data collection” for all involved in payments (p. 53). Moreover, there is a lack of clarity due to the increasing convergence between instruments: typically, more traditional payment instruments, such as credit or debit cards, form the basis for m-payments. This “blurring of product categories in retail payments as access devices and channels are becoming interchangeable” (Capgemini, 2013: 18) also presents a challenge for central banks who monitor payments.

The 2013 report thus indicates that some of the initial fears of the banking industry may not be warranted: non-bank PSPs are “‘piggy-backing’ on the existing infrastructures of banks and processors to complete the transactions” (p. 44); after all, they rely on established bank infrastructure, telecoms, and established payment tools like credit cards, guaranteeing banks and other established financial institution a part in the payment value chain. Yet, consultants also point to the entry of non-banks as a catalyst for innovation altogether:

Some new entrants have been arguably more successful than banks in developing customer-centric, value-added payments innovation in some parts of the value chain. Customer-centricity captures users’ imaginations and generates loyalty, ensuring a closer and longer-term relationship with customers. (Capgemini, 2013: 41)

The report acknowledges that the role of customers, their payment behavior, the analysis of large-scale data points (“big data”) as a value-added service to provide insights on customers for personalized advertising and marketing has become central.

The 2014 report notes that the numbers of m-payment transactions continue to grow “at a rapid pace,” from 18 billion transactions in 2013 and an expected 47 billion global transaction in 2015, of which non-banks will increase their share of transactions from 2.2 billion in 2013 to 7 billion in 2015 (p. 13). “The mobile payments space is increasingly competitive, with banks and non-banks striving for insightful data, market dominance and consumer loyalty” (Capgemini, 2014: 13). The growth in smartphone use has led many banks to develop their own m-payment apps. Yet the report also warns the banking industry of unrealistic expectations:

The high growth in m-payments predicted by many industry analysts may be premised on the unproven potential of contactless payments as well as the underlying hypothesis that a yet to be launched innovation will drive large scale adoption of contactless technologies in mature markets. (Capgemini, 2014: 13)

Indeed, at this time, technologies are rather limited: there is no large-scale adoption of NFC technologies in smartphones; similarly, technologies at the point of sale are not very developed.

The 2014 report strongly advises the banking industry to collaborate with non-banks, while also forecasting that “the role of banks in the payment industry may change radically” (p. 39). Banks may no longer be at the center of payment governance. Some banks may need to change their business model entirely: they may move away “from selling financial products to activities that enable commerce, such as selling data” (p. 52).

The World Payment Report 2015 continues to show the growth of digital payments. Particularly, the Chinese market is growing at an accelerated pace with 190 million Alipay users in 2014. The report emphasizes the growth of the “hidden payment market,” whose unreported transaction volume is estimated to be between 25.5 and 40.9 billion. Among these hidden payment transactions are closed loop cards, virtual currencies, as well as digital payments, that is, digital wallets, apps with stored monetary value, including the 2014 launched Apple Pay. The report views the stark increase of the payment types due to customers’ demand for convenience and faster payments transactions as well as the non-financial regulatory environment for non-banks. The 2015 report sums up the banking industry’s concerns:

The growth of the hidden payments market poses concerns regarding data privacy, and information security for all stakeholders in the payments industry: banks, non-banks, customers, and regulators. The lack of coherent data related to such payments makes it challenging for banks and non-bank PSPs to develop relevant new payment services. Customers face challenges because consumer protection regulations related to information security, dispute resolution, and deposit insurance have not evolved for hidden payments. Regulators face challenges because this is a relatively new and fast-growing method with opaque governance. (Capgemini, 2015: 17)

Phase 3, 2016–2018: new challenges and enthusiasm for digital payments

The 2016 report points out that while the use of digital payments increases, the use of cash especially for small amounts does not decrease. While some countries and national banks are discouraging the use of cash, for example, in Sweden, the report expects cash to “remain a significant payment instrument, even in markets that offer advanced digital payments” (Capgemini, 2016: 11). The 2016 report also indicates that the fintech industry challenges banks:

they are able to innovate more quickly and prove a better customer experience by making use of the most advanced technologies. Additionally, banks are challenged by FinTechs due to their ability to shape and drive customer expectations at a rate with which banks cannot keep up on their own. (Capgemini, 2016: 35)

The 2017 report picks up the cash/digital payment conundrum again. While the share of cash in the total payment volumes is declining in the majority of countries, the amount of cash in circulation remained stable or has even increased. The report expects cash to “continue to stay in the system for a longer term than expected” (Capgemini, 2017: 5). At the same time, reportedly because of different sets of demographics and cultural–institutional contexts, the use of digital payments has also increased. Indeed, in emerging markets, initiatives to promote cashlessness and financial inclusion continue to drive the growth of digital payments transactions. For instance, the payment habits of users in China are moving directly from the use of cash to digital payments offered by the giant Chinese tech platforms, with 25.7 billion transactions in 2016 (p. 10). By 2020, the report expects it as “highly likely that emerging economies will be the power houses of global non-cash transaction volume growth, with China most likely challenging the US as the leading market” (p. 12).

The 2017 report also enthusiastically speaks of the “evolution of next-generation payments,” which technological innovations, such as blockchain and biometric data, may bring about. It expects digital payments “to grow at a compounded annual growth rate of 21.8% from 2015-2019” (p. 14), from 49.5 billion transactions in 2015 to an expected 108.8 billion transactions in 2019 (p. 15). Given these developments, the consultants urge the banking industry that it is “time to update payments business models” because of customers’ demands for personalization, new technological possibilities, and regulatory initiatives while keeping data safe (p. 28).

In 2018, the industry consultants continue to be enthusiastic with regard to the growth of digital payment possibilities. In particular, the use of wallets as digital payment platforms offered by the global tech giants, such as Alibaba, Amazon, Apple, Baidu, Facebook, Google/Alphabet, Samsung, and Tencent, highlights the role tech giants have in the rise in digital payments: 71% of all transactions were conducted using one of their payment apps and wallets (Capgemini, 2018: 12). The tech giants’ focus is on “customer interface and experience” as well as the “utilization of data,” which banks, to the dismay of the consultants, are only “starting to recognizes the importance of” (p. 13). Consultants view the impact of social networking platforms as most important: they advise banks to move toward a component-based, platform approach to banking and they notice that “platformification” will continue to alter the traditional banking and payment industry in the future (p. 37).

Future imaginaries

The sensemaking of industry consultants on what these new types of payment forms are and what the competition from social networking platforms/tech giants mean for the banking industry in situations of uncertainty have shown three phases: at first, new technologies and new non-bank entrants were seen as threats to the banking and payment industry. With the realization that some of the technological and economic infrastructure of the existing industry, and in turn credit card and debit card transaction fees, continues to thrive with these digital payment instruments, the consultants turned their attention to promoting the new technologies as an opportunity for innovation needed in the banking industry. The future imaginaries told in the stories of industry consultants concern a better, more profitable future for the banking industry, reaping the benefits of the digital transformation, if indeed banks significantly change their business model and act more like social networking/tech companies or at least in collaboration with them. Indeed, social networking platforms and their diversified consumer ecologies are competitors but also provide the industry consultants with the key reference on how to innovate in the banking industry. Underpinning this story of a better, profitable future—once the banking industry has transformed its core digitally—the analysis shows three future imaginaries, which cut across the categorization phases just outlined: data monetization, the growth of digital payments, and delivering the payment experience.

Future imaginary “data monetization”

The central future imaginary is that of “data monetization.” Beginning with the 2012 report, consultants realize that personalized services based on user-generated data are vital: “Banks have an opportunity […] to analyze customer activities and payments patterns to deliver a more personalized customer relationship experience and proposition” (p. 39). For this user-generated data model to succeed, data on payments are key:

gathering payments data from shopping histories can help retailers to drive personalized advertising/marketing and special offers. This more targeted advertising, and greater visibility into customer behavior, could help retailers to improve their profitability and supply chain management, as well as provide higher value to customers. As one leading financial firm said, ‘The battle in innovation is in understanding customers, and the best place to do that is at the point of transaction—which is also a lead to the huge advertising market’. (Capgemini, 2018: 41)

Traditionally not seen as such, data on payments are transactional data between a sender and a recipient. This information on linkages should be monetized by banks just as user data are monetized by tech giants. Tech giants’ data-centric business model serves as an important catalyst for innovation in the “payment space.” The imaginary of “data monetization,” to effectively harness transactional data, becomes a driver for the banking industry, to focus on “value-added services,” such as targeted advertising, customization of special deals, and loyalty management, which are based on data analytics.

Other analysts of the digital economy similarly point out that “digital payments form the core of monetization” (Lipton et al., 2016: 12). Banks “own rich reserves of raw behavioral data, which can provide valuable insights into future customer choices” (p. 14). Their advice to innovative banks is to follow the examples of tech giants. The innovative bank

should consolidate data across deposits, consumer finance, and other transaction accounts for a unified view of customer activities. […] It is imperative to be able to evaluate collected customer transactions in real time and connect them for prediction of future customer behavior using deep learning and other probabilistic algorithms. It is important to build in safeguards of customer privacy in accordance with their preferences and legal requirements. (Lipton et al., 2016: 14)

In turn, the future imaginary “data monetization” also pushes the banking industry to consider what constitutes a bank and what services a bank should provide. First assessments of collaborations between banks, payment industry, social networking platforms, and retailers show indeed new types of data monetization arrangements (e.g. World Economic Forum, 2017). The Capgemini reports strongly advise banks to change their institutional logic to focus more on payments because they yield rich, user-centric data, to harvest the transaction data they already hold, and to offer a platform approach to banking (“platformification”).

Future imaginary “growth of digital payments.”

Another future imaginary is the “growth of digital payments,” both in terms of transaction and spending volume. As an example, in all reports, data visualizations show sharply upward bending curves starting with current and then moving into expected digital payments transactions.

Consultants are particularly observant of the potential growth of payments in China. By 2016, China is the dominant driver in non-cash payment growth worldwide, banking on the rails of social networking platforms. To be sure, this imaginary is careful to not advocate copying the Chinese system in general, an “all-encompassing financial panopticon” (Scott, 2018: 151) given the existing state surveillance and social credit system (e.g. Chong, 2019; Kostka, 2019). However, “growth of digital payments” imagines a future in which payment platforms promote the growth of payment transactions by offering social networking possibilities, interlinking several sources of transactional data, while also guaranteeing privacy and data security. Such social data–enhanced payment platforms, the analysts imagine, would increase consumer consumption and could provide for easy direct consumer credit all in one.

Future imaginary “the payment experience”

A third future imaginary is “the payment experience” of users of such payment instruments. Although the analyzed Capgemini reports are written for the banking industry, banking customers intermittently enter the analyses, for example, when the report envisions the “integration of payment into daily life” (Capgemini, 2013: 45). With an easy-to-use, so-called “seamless payment experience,” in which the transfer of payment gets delegated to the push on a button on one’s own smartphone, retail customers are expected to save time and profit from secure, immediate, and transparent transactions. The idea is that with these new technologies, the moment of payment itself moves into the background, practically becoming imperceptible. Payment as the transmission of monetary value becomes “ambient” and “seamless.” With that, the tracking of data points, fundamental for shaping one’s digital übercapital, moves even further into a vanishing background. Instead of the economic transaction, the “payment experience” of social and communicative interactions with a seller, the product, and potential future buyers moves to the center stage. In that sense, payments become a “theatre of experience” (Tkacz and Velasco, 2018: 39). Moreover, payments become experiences that are sharable with peers (Nelms et al., 2018) and get crafted as “user experiences,” bonding together retailer, brands, and consumers (Kremers and Brassett, 2017).

Such move toward “ambient payment” then also reduces opportunities for consumers to reflect about their purchases, which may impact the need for consumer loans and in turn affect creditworthiness. While “the experience economy” (Pine and Gilmore, 1998) characteristically envisions consumption and services to become memorable, now the “payment experience” is only meant to be memorable as long as it does not disturb other valuable activities, such as spending, sharing, bonding, and communicating.

Conclusion: the “re-personalization of money”

The analysis of industry consultants’ reports over the period of 11 years has revealed how the stories of the future on digital payments capture a shift from fear of competition to the assuring realization that banking infrastructure is still needed, and eventually to current enthusiasm for digital payments. The analysis revealed three sociotechnical imaginaries, which serve as orientation to the banking industry. While these imaginaries are oriented toward the future, they motivate, organize, and coordinate action in the present and contribute to shaping the future.

This article has argued that the sociotechnical imaginaries of digital payments helped to shape the banking industry’s current move toward becoming payment platforms, which restructure financial services based on a “re-personalization of money.” Previously, the strengths of cash lay in “convenience (cash is versatile and widely accepted), control (cash is final and spending is limited to cash in wallet) and value (it’s free, at least in appearance)” (Higginson et al., 2015: 17). Now, analysts argue and consumer data show, convenience is about “personalization of payments” of how a consumer likes to pay, control is about “smart tools to control expenditures” that make payments immediately transparent in apps and accounts, and value is about personalized, localized offers (p. 18).

While the collection of data has always been central to the construction of societies and their economies using surveys, polls, and credit information (e.g. Igo, 2018) and while monetary transactions and products purchased have been recorded and analyzed before (O’Dwyer, 2019), tech giants’ business models introduced a new scope and scale of tracking, sorting, categorizing, classifying, and analyzing. This has proven transformative for the entire digital economy. Data produced in digital payments are now different than before: data tracked from digital payments are part of a larger ecosystem of trackable and traceable data, including data from social media platforms, that people as consumers and citizens produce. For us as individuals, these digital data profiles present a new, transcending type of übercapital to which we need to contribute to stay “traceable, tractable, and extractable” (Jürgenmeyer and Krenn, 2016: 179) and which constitutes a necessary requirement to participate in the digital economy. At the same time, our übercapital is also shaped relationally by others, with whom we may be strongly or weakly connected, or with whom we may only share inferred digital data profile points. According to our intermingled individual and relational choices, and their algorithmic calculations, we become further formatted for the digital economy.

These intermingled individual, relational, and calculative processes are at the core of the major shift toward a targeted, also so-called “personalized economy,” in which banks as payment platforms hope to profit from. Within this personalized economy, our data profiles are characterized by the tension between “individualizing and deindividualizing practices” (Moor and Lury, 2018: 502) of our individual and also relationally embedded choices. For payments, a tension between personalization and new types of sociality can be found: platformification and the use of transactional data promises that banks can profit, like the social networking platforms of tech giants, from establishing personal profiles, providing targeted advertising, and combining data further for other financial services such as credit scoring or insurances. From this view, digital payment systems and money become personalized in a new way and substantively different from previous interpretations of money as atomistic and anonymous. At the same time, payment and money become social in a qualitatively new way. Payment platforms based on or connected to social networking platforms are designed for social interaction and communication. As the world of payments evolves and opaque markets of optimization for persons and citizens may be developing, it thus seems plausible that digital payment may not only contribute to a “re-personalization of money” but also yield new forms of sociality.

Footnotes

Acknowledgements

The author thanks Rahel Estermann, Lisa Kressin, Philippe Saner, Markus Unternährer, Bernd Wurpts, and two anonymous reviewers for their insightful and very helpful comments to this paper.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Sophie Mützel

Notes

Author biography

Sophie Mützel is professor of Sociology at the University of Lucerne, Switzerland. She is currently working on the social and technological underpinnings of new relations and socialities in digital transactions, including digital payments. Past research has focused on network analytic theories, narratives and stories of the future in market emergence, and sociological analyses of large textual corpora.

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