The Mobile Payments Long Con

A simple, semiserious trick for predicting the future of mobile payments with 100% accuracy.

In the booming world of FinTech investment, no group of entrepreneurs have received as much funding as those focused on mobile payments. In fact, according to TechCrunch, committed capital to payments companies has hit a five-year high with 59 startups raising $429 million in Q1 of 2014.

With so much activity happening in the world of mobile payments and with so many different acronyms—NFC, HCE, BLE, QR, EMV— being hailed as the answer to consumers’ unspoken payment problem, it can be hard to keep track of all the potential solutions…let alone predict which one(s) will end up succeeding in the market.

However, I think I have found the answer to predicting a winner. To all of you unknown FinTech consultants out there looking for your ‘Nate Silver moment,’ consider this my gift to you.

The System

Let’s start with an example.

Last month, a random Twitter account gained some attention online when it appeared that the person behind it had perfectly predicted the outcome of the final World Cup game, down to Mario Götze scoring the only goal. While it initially appeared to be proof of a massive global soccer conspiracy, the ‘prediction’ was eventually revealed to be a hoax. Essentially, what the Twitter user had done was Tweet dozens of different possible outcomes for the match the day before and then deleted the predictions that hadn’t happened immediately after the game. All that was left was four perfect predictions that ‘proved’ FIFA had rigged the contest. The hoaxster made one critical mistake—they forgot to make their Twitter account private while tweeting their initial guesses. This allowed the mythbusters on Twitter to quickly find and post screenshots of all the deleted predictions.

Successful variations of this trick have been pulled on people for centuries. A mentalist by the name of Derren Brown was able to convince a woman to hand over her life savings for a bet on a horse race after convincing her that he had a ‘foolproof system’ for picking winners. He convinced her of this by sending her five consecutive winning predictions for previous races. Little did she know that he had also sent random race predictions to 7,775 other people and that her set of predictions turned out to be the only one that was completely accurate.

Payments Roulette

The global payments industry is obviously a little more complex than a soccer match or a horse race. There are a lot more possible variations and outcomes and there is no defined time limit for the competition over consumers’ wallets. We might not know who ‘won’ the mobile payments battle for many years.

However, the idea of making small bets on a lot of different outcomes might be a sound strategy for banks and VCs looking to jump into the mobile payments arena. As Jim Marous recently wrote:

The best bet is to make several small bets in the game of ‘payments roulette,’ where the only winners are those who get engaged and take advantage of opportunities as they present themselves. Those organizations who sit on the sidelines will not only miss the opportunity to ‘win,’ but may actually be left behind as competitors take market share from demanding digital consumers.

Or if that sounds like too much work, you can always just create a new Twitter account and spend a couple dozen hours posting every possible mobile payments prediction you can think of (just don’t forget to make the account private).