Transcription:
Chiro Aikat: (
All right guys. Um, there's nothing like having a panel discussion on point point a interaction at, uh, what eight 30 in the morning. And I saw a lot of, a lot of people last night when I was coming in going out. So I'm not sure what the, the participation will be this morning, but we'll make it as exciting as possible. So, you know, um, let me first thank, uh, the opportunity for digital banking to invite us, uh, to the stage, to have a discussion on what I think is a really fascinating topic and thank you some to, to join us as well. Uh, before we get started, um, some good news to share some, but, uh, uh, used to be the chief revenue office of a Verizon, but I think effective July, you are going to be CEO of Verizon business to, uh, reporting directly to Han chairman and CEO. So congratulations. Thank you. Great. Uh, great move.
Chiro Aikat: (
So some, and I have done this, uh, couple of times, so we, we thought this will be a great, uh, a great platform to talk about both organizations and what we are seeing come in the stage. When you think about point a interaction, a lot has changed. And I think many of you sitting in this room have experienced that as well. If you think about the traditional point of sale, it was very linear, right point of sale device, a hardware at, at the physical terminal. And that shift has completely changed over as we've seen the onset of new technologies like cloud computing, 5g, and others as well. And what's interesting is not only has the technology changed, but the consumer mindset has changed as well. Mascot's payment index. Uh, we did a survey and we saw 87% of consumers are looking or willing to emerge in some sort of digital payments, right?
Chiro Aikat: (
And so it becomes about choice consumers. Don't wake up every morning and lie to people in this room and think about payments. They wake up every morning and they want to know about how they can make their experience better. They want to be able to have the choice they want be able to pay the way they want to pay. They want to be able to have a better experience and they want to have speed, right? That's important for them. And as we look at these technologies coming into, coming into play, and as also with what has happened with the pandemic, which has really accelerated the change in consumer mindset, but also the adoption of these technologies. We are seeing a dramatic shift in the, in the, in what I would call change from point of sale to point of interaction. It's about consumer experience. It's about technology. It's about combining all of those together to drive a better consumer experience forward. So with all of that, some one question for you is as you think about all of these things coming together, what are you thinking from your own business standpoint, from Verizon as to how you're planning for this future and what are the assets that you think about bringing to bear?
Sowmyanarayan Sampath: (
Yeah. Look for us. We are a telco, a very proud telco, very big telco, a successful one. So we think there are three trends that make us over the next decade, cloud mobility and broadband. Those are three businesses we are in. We don't want, we are not distracted. We don't want to win the Emmys. We don't want win the Grammys. We are focused on delivering cloud mobility and broadband and in a payment, uh, and a point of interaction base. I think that three things we see the first is rich data, you know, earlier point of sale was an narrow band transaction that required a certain thing. Now it's a very broadband transaction, cuz the surround around the data is massive. Uh, you know, rich media integration of loyalty integration of other eCommerce assets into that. So it's a much more broad brand transaction. So I think that's one big trend.
Sowmyanarayan Sampath: (
Uh, we see the second one is speed. Uh, I mean, if you look at cart abandonment rates at as high as 70, 80%, you've done a lot of work for 80% of your people to leave you at the last leg. It's literally like being, let go at the altar. You know, we've worked all the way and being, let go. So speed is important, you know, 25% of them don't like it because the speed's too complicated. So speed latency is the second one. The third one for us is security. Yep. And look, the payments piece has always been very secure. The payment trails you guys know well has been a secure transaction, but the thing surrounding the payment trails has been less secure. So those are three things, but look, cloud mobility and broadband is alive these days.
Chiro Aikat: (
Yeah. And I think to that point, I think, uh, one of the, one of the big topics that, uh, on top of mind for all of us is how does cloud play into the point of sale interaction, right? And then when you think about it for a second where we were 10 or five years ago now where we are, if you think about your smart refrigerators, think about your smart cars. Some, I have a joke like, you know, if the ice cream is getting low, the smart refrigerator can order it and, and, and have it automatically shipped. We only care about the dessert piece of what's in the refrigerator and nothing else, but it's, it's really interesting to see where that technology and all of that technology is being funneled is being supported by cloud and, and, and 5g as well. So, you know, as you look at the horizon, uh, what are the technologies that you've seen, uh, excellent over the last two plus years?
Sowmyanarayan Sampath: (
Yeah. Look, I think the first for us is around 5g and uh, Alta of course talk a little more about it is ubiquitous availability of broadband. None of the things we want to do in this room, in this conference more broadly works. If you don't have UBI disconnected to your broadband. And historically it's been a wild line play, you know, we have fiber running, but interestingly in the last two years, wireless broadband has become real for us. So what used to take 20 days to get someone set up with broadband now happens overnight. You can call us at 8:00 PM tonight and we'll get your set up with good quality broadband by 8:30 AM the next morning. So I think broadband it's old stuff, but it's stuff that continues to develop in that. The second thing for us has been, of course the five GPS has been, uh, the edge compute. Uh, we are seeing lot more compute happening at the edge for latency sensitive applications and most things around e-commerce digital payments tend to be latency sensitive applications. So we are seeing a lot of edge compute happen. Uh, so the next decade we think is the decade of the edge fuel. So I think those are two technologies we are quite excited
Chiro Aikat: (
About. Absolutely. And I think to, to, just to piggyback of that, you know, how many in this room, just, just a quick question, what is the average number of devices that are connected to the internet that has a capability of making payments in a us household? Anybody take a stab at it it's eight, eight to 10, right? That's huge. If you think about it at any point in time in our households, we have eight to 10 devices that are connected. And so to sums point, the latency becomes a really big challenge. The amount of data being flown through becomes a important element as well. And as we look into experiences, we look into consumers wanting able to shop the way they want choice and not being, uh, you know, held hostage to one way of payment or one way of device that, that technology becomes so important. You know, some but one of the things that, you know, you have educated me so well over the last couple of months is 5g is not 4g faster, right? That's been a little bit of a, a misnomer in this market. Talk to us a little bit about what really makes 5g different, the very different architecture. And why do you think that is the foundation of everything that we are building on as we get into the next generation of POI?
Sowmyanarayan Sampath: (
Yeah. That is a great question. Uh, chiro look, I think what every technology one G two G 3g, 4g has been about speed. Remember back in the day, things were very slow. It's moved faster and faster has come. 5g is definitely faster than 4g, but that's only a small portion of it. We call them currencies or visa capabilities. What else can 5g do? For example, the biggest one is latency. Yeah. We think today in a typical transaction, it's 140 hundred milli, 50 milliseconds of latency. We want to bring that down to barely double digit latency. 5g networks can do that. The way the architecture is set up. So that's one thing. Second is power consumption. The third one is device density. And you're like, why does device density matter? Let's say for the SoFi stadium at the, in a NFL super bowl where we have our network there, primarily you have 60,000 fans. Each of them having two, three devices, all of them streaming at the same time, nothing drops. It's perfect call. So 5g supports device density. Second is power consumption. We can take power consumption down significantly further. One is security. Security is built into the stack. So you don't need a lot of overlay technologies on it. So 5g is a very different technology. It's a foundation of trillions of dollars of enterprise value that will be created over the next decade on this.
Chiro Aikat: (
Exactly. Uh, you know, our companies are doing a lot in terms of bringing payment experiences and, and partnering with you and others on, on 5g technology. Um, you know, we think the, the future is tremendous and the opportunity is a huge, tell us a little bit about as the convergence happen of 5g and cloud computing that we spoke about, what does it in your opinion mean for consumers and businesses?
Sowmyanarayan Sampath: (
Yeah. So let me break this down into two things. 5g is the network piece of your interaction and it's around speed latency, power consumption device density, similar to what I spoke about today. And what is interesting is 5g is available across the country. You know, you today 35% of all our users are on 5g handsets. And we are barely into the launch of the product at the same time in 4g, this number was less than 20%. So we are already almost double where we were in terms of growth, as far as LT is concerned. So that's the 5g portion. By the end of this year, we expect that number to, you know, almost grow up to 50%. So we see a very strong trajectory in that motion on 5g deployment. On the other side, on the cloud piece, what we are seeing is, uh, we are moving from centralized clouds to a lot of edge clouds.
Sowmyanarayan Sampath: (
All the three hyperscalers have a version of the edge cloud, where they have computed the edge that has access to the same developer ecosystem as their core cloud platform has now. So imagine you bring these two worlds together, low latency, high bandwidth networks, and low latency edge computes together and control them on a single plane. In other words, you can set security network and cloud all control from a single plane. The use cases are tremendous, and that's what 5g is going to do to the cloud. Look early use cases are in factories. You know, you don't want your robotics in the factory controlled by a server sitting in Virginia. You want it sitting there because the latency, similarly, if you're doing some surgery, you don't want your thing to be, you know, in a remote cloud somewhere else. Uh, same with ports. We work a lot with ports today. You know, when you move these gantry cranes around, you don't want that control from somewhere completely different. So low latency applications together with the networks make for piece that's one. Now this is a foundation element to it. This is exactly where it LTE or internet was 10, 12, 14 years ago. You're gonna create trillions of dollars and chiro. I, I have to admit when 4g was being rolled out, I thought the only viable service was Napster.
Sowmyanarayan Sampath: (
I actually built a business case to invest tens of billions of dollars on the back of Napster. I still have my job. That's the good part. and, and, and part of that has to do with almost the trillions of dollars of value that's been created by developers and companies there, whether it's Uber, whether it's Netflix, whether it's Shopify, all of them have been back of mobile. Broadband created 5g is exactly in that shape right now. I don't know what the killer applications are. I think it could be AR VR. You know, for example, in the, in Arizona state university, a lot of the kids study their biology, one on one through these AR VR, where they can navigate through the body. I don't know why that's interesting, but you know, we can navigate through the body. So those are some early use cases, but I'm gonna be wrong always on this. So I'm gonna let the market decide.
Chiro Aikat: (
And that's a, it's a, it's a great point. I think, uh, it's the foundation on which innovation will happen. Like nobody can predict what that innovation will be, but it's a perfect foundation for as, as more and more, we look at consumer experiences merging together with payments, just from a payments perspective, there's more innovation. One of the examples of that is also tap on form. One of the things that both organizations have worked together is to take, think about this for a second, take your mobile phone and turn it into a, a point of sale device, right? That's powerful. You take the secure element of, of the kernel or the EMV acceptance, and you take it out of the hardware. You put on the cloud and use the 5g technology to drive that speed and increased data site. Now you have made every consumer who has a smartphone, being able to accept payments that in itself will open up so much of innovation, right?
Chiro Aikat: (
That's huge for small businesses that use for consumers. And, and some of the things that, you know, we have been doing at our, our, our co-innovation centers. Uh, and we would love to invite those who are interested to come to our innovation centers for Verizon and mascot, both and, and, and, and, um, and Boston, as well as in New York and other places to look at how we are thinking about the innovation of the next generation. But think about a use case. You walk into a grocery store, you pick up your groceries and you start to stand in checkout line, right? And you're waiting in line to get checked out. What if through the cloud computing, you already have been able to ring up what your, what, what is in your basket. And all you do is when you get there, you just initiate the payment.
Chiro Aikat: (
So the ringing of the items, the 20 minutes that takes for the, the, the checker to, you know, scan new items, think about the speed at which that can happen. Think about the fact that your medical profile is secure in a cloud environment, where you go to a pharmacy and you decide to get your medication. And it can say, wait a minute, this medication is not, it contradicts with what you already have. That kind of intelligence that can now sit in a cloud environment, gives consumers so much tremendous daily value. And that's where some puts point is so much innovation can be done on that space,
Sowmyanarayan Sampath: (
But even for, uh, you know, payment providers as well, uh, you know, for example, fraud. Yep. Uh, it's a big one today. You guys know what you guys pay for it. Uh, if you are able to put more of your fraud scoring and your fraud management system at the edge, you get a huge latency benefit from that. And what can that do to the speed of transaction and preventing fraud from happening? It's a big one. Another one is just the adjudication, the authentication piece, the closer to the edge you save between, you know, a hundred and 110 milliseconds. What does that do to card car abandonment rates as well as others? So I think this edge compute together with 5g and payments is, is, is a perfect recipe for a very nice looking cake, I think.
Chiro Aikat: (
Yeah. Agreed. And that goes to the next point. You know, we, we have seen the effects of the pandemic. 40% of small businesses went under, uh, because of the lack of digitization and having a e-commerce presence when the, when the lockdown happened, right? And, and small businesses are important for our economy significantly important as you think about this technology and, and, and a combined effort to bring consumers and most small businesses into the digital footprint, how do you see the shape and help small businesses, not just large businesses, but small businesses as well.
Sowmyanarayan Sampath: (
This is a generational thing. Shero COVID have hero COVID has handicapped small businesses for a generation. So I think in the next three to four years, if small businesses do not invest in digital, they're gonna be left behind and look, only 50% of the country is employed by small business. So it's a pretty significant number. Uh, two things, one 30% of small businesses today do not have a digital presence. 30% my barber shop, the place where I gets my shoes, shined, where my wife goes to get her nails done, do not have a digital presence. Another 30% of them have a very poor digital presence. So two thirds of small businesses don't have a great digital presence. So I look, this is not, you're not asking them to do rocket science, it's broadband connectivity, payment systems, a basic website. They can go and track in a single integrated manner that helps them grow and get their business out. So I think this is a generation. If small businesses miss this, we are gonna pay for it as society, much larger down the line
Chiro Aikat: (
Agreed completely. And you know, one of the things that we are putting in the market is the tapon phone technology that are referred to one of the biggest pain points of small business, what getting paid, getting capital. And a lot of people think it's about small business, able to get credit is also ability to get paid, what they've provided services for and having them device that can accept payments right there, and then like a plumber rather than waiting to send you an invoice or getting a check or a cash. Having turning that device smartphone into a payment device is so important for small business at a fraction of the cost, which was made available through 5g and cloud computing, which was not available years ago, you know, small businesses. So important. One of the things I also want to just, uh, you know, mention is like, today, it just happens.
Chiro Aikat: (
We on the stage, but we also just announce a Verizon's business, MasterCard, uh, partnership with launch with, uh, Verizon as well as F and B O. So again, a lot of great access that we talked about today on this panel, bring to bear with our, our payment vehicle, to small businesses, uh, through Verizon F NBO, which helps them come into the space of digitization. My last question for you, Sampath is as you know, so what does this all mean? We talked about cloud computing, 5g, small businesses, point of interaction changes. What does it all mean for the consumer, for the small business, for the, for the payments industry and the industry in general?
Sowmyanarayan Sampath: (
Yeah. Look, I think the first one is you have new assets to play. We didn't have earlier ubiquitous available, a broadband, low latency networks, a secure environment to play. Uh, so I think we are gonna see innovation from each and every one folks here on that platform to, to do that. Uh, 5g is here. We are open for business. It's here right now. It's not something that's coming next. You know, it's not like a movie trailer. This is the movie we are in it right now. We've started, started with it. Uh, and, and I think the last one is the impact it can have on consumers and small businesses is massive. What I don't know. And it's an odd thing for me to say at the end of something like this is, I exactly don't know what those use cases are. I don't know, but I'm very confident. We have a use cases. We have it on 300 different pilots going on right now with different companies in different industries. So there's gonna be trillions of dollars of enterprise value created. You heard it here and, uh, over the next decade,
Chiro Aikat: (
I agree, Simon. I look, I think, uh, the, the, the beautiful thing about the, the, the evolution of the POI from the POS is opening up a platform democratization of the point of sale, where you give technology cost, all that drives innovation in a platform that can be, uh, you know, accessed by many. And, and so the innovation is we don't know what's gonna happen in the next six to 12 or 18 months, but we are committed together as, as two organizations to help to bring that innovation to consumers and small businesses. Because at the end of the day, it is so important. We are sitting on a generational change of technology and it's for us as a, as, as an industry to capitalize on it, to innovate and on it, and to bring our consumers the best experience possible. So thank you for your time. Congratulations, once again, thank you on your, on your promotion, but, uh, thank you.