My notes from the Fireside Chat with Peter Donat at UL on August 25, 2015 in San Francisco

Bay Pay Forum’s August  Social Mixer was held at UL’s office on Battery Street in San Francisco sponsored by the Transaction Security division of the company.

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You are likely familiar with UL (Underwriters Laboratories), they test practically all items being sold in the USA against relevant standards, and their mark is everywhere – on appliances, computer equipment, smoke detectors, life jackets and more. Their job is to protect us by ensuring that products meet certain standards. The Transaction Security division is responsible for any kind of electronic transaction, such implementation of contactless and mobile payments (NFC/HCE/BLE), data security (PCI compliance), and EMV migration - checking for security, compliance, and global interoperability. They are the ones poking at EMV POS devices and the EMV chips to make sure that they are hacker proof! (

It was a full room, and UL provided a nice spread of refreshments.  Too many people present to talk to everyone, I talked to interesting people from Google, RS Sofware, Robert Half, US Trust but I understand that there were people present from other companies (See full list here at the bottom of teh page).

The guest speaker for  the event was Pete Donat from First Data Ventures. He and Daniel Chatelain pulled up chairs for a fun, casual “fire-side chat” discussion.  Peter is a native of Berkeley, but has lived all over the world, and spent a lot of time on the East Coast.  In his college days, he was a “political hack” for Al Gore back when he was campaigning for presidency back in 1988.

Peter first entered the payment space consulting with Marakon Associates. AmEx was one of their clients, and he helped them with their annual planning by building a tool called “SQP”  for Strategic Quality Planning, this effort provided him insight into the importance of the payments industry. After that he spent 7 years at MasterCard and another 9 years at Visa in business development.

While at MasterCard Peter had a hand in building the Mondex eCommerce solution ( In 2001 they partnered with Chase to get Mondex working on 14 terminals, the user experience with the POS systems wasn’t the success they’d hope it would be.
Now Peter works for First Data where he is the head of their Venture Unit, where his job is to find small innovative companies, and invest in a selective few that they feel are really have disruptive solutions.  

Daniel posed a number of questions, and Peter also fielded a number of questions from the audience. Questions aren’t listed here, but some of the insights that Peter provided are captured below:

Changes in Payments Industry: The elements required to be successful  in the payments haven’t changed – like having a critical mass of consumer & network buy-in, and an infrastructure to support the safety of transactions, to manage risk, ensure uptime, handle disputes, etc. - big  businesses have spent a lot of time and money building these out.   What has changed is the technology, and the pace at which new solutions are introduced. Smaller companies are able to get access to funds and come up with payment solutions in a mere matter of months, but it would take them years to get the same level of infrastructure as the big companies. There needs to be a partnership between the more established companies and these newer disruptive companies.

Wallets: Adoption of using a mobile wallet to replace a physical wallet in the US has been slow. We need to keep working at this, and ensuring that devices can accept the payments.

Bitcoin: It’s all about the merchants – we don’t have many merchants asking for the ability to accept bit coin.  Blockchain is the relevant technology for payments and for commerce.   First Data has Gyft, a pre-paid product that also supports bit coin, this functionality was already built in when they bought it, so they continue to support it, and can gain learnings from it. There are still many open questions about BitCoin – is it an infrastructure play? Is it a consumer play? Will merchants use it as another network?  In order for it to be truly interesting, it has to have sufficient adoption.

NFC: They spent a lot to roll out the technology, but didn’t really see adoption.  From the customer’s perspective, the tap vs. swipe experience isn’t compelling enough to make them switch behaviors. However, the ability to link commerce to the phone, where a customer spends much of their time – online, downloading, shopping – there the experience of doing a tap&pay may be easier and quicker than the swipe of the card.  

EMV: It works in Europe. When will it take off in the US?  EMV has been in planning for a long time. When Peter had been working at MasterCard, he had predicted that EMV would be fully deployed by the end of 2005! That did not manifest.  Payment security is part of the EMV solution, but it won’t prevent all fraud, and it won’t stop data breaches.  There are “3-legs to the stool” – Encryption, Tokenization, and EMV and it’s surprising how many merchants store data “in the clear” violating the spirit of PCI compliance.

First Data Investments:  First data isn’t a perfect organization, they want to invest in new technologies and entrepreneurial companies, but also want to be careful not crush the spirit of what makes them successful. They buy companies like Clover and Gyft, and basically let them function as a stand alone, but work together where they have an infrastructure that supports the acquired company.  

Example of disruptive company: First Data can’t invest in all companies that look interesting to them. They have to be selective and pick companies that really stand out. One company they really liked was “Bookers” – they had a solution where you could do a google search for a business (eg. Hair salon, or yoga school) and be able to book the appointment right from the search results page.

Trends in Payments: SKU based solutions – being able to provide item level detail on purchases, API-“ification” taking data from the terminals to use for different solutions

And so ends another great event at Bay Pay Forum. Looking forward to the September 1st event on Bitcoin, Blockchain and Exchanges.

See you there!

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