The Innovation Project™, powered by PYMNTS.com℠, has established the Payments Hall of Fame™ and Lifetime Achievement Awards to honor the giants of the industry on whose shoulders all innovators stand. These are the men and women who have created the foundation of the payments industry and have made it possible for new innovators to pursue what’s next in payments®.
We proudly announce the 2014 inductees into the Payments Hall of Fame™. The inductees will be honored on March 20, 2014 during our Innovator Awards at the Innovation Project™ 2014. Congratulations to all of our 2014 recipients!
2014 PAYMENTS HALL OF FAME™ INDUCTEES
Arthur Hahn | Inventor of the Magnetic Stripe
Thanks to Arthur Hahn, we’re all pretty spoiled when we go shopping at physical retailers. The card swipe that today takes literally nanoseconds is made possible because of something that Arthur and his small team of engineers at IBM did to incorporate a coded mag stripe on the back of a plastic (or paper) card. Until then, credit cards were plastic but they had nothing with which to encode data that could be used to authenticate a user or a transaction and to streamline the check-out process.
That meant that going to a store and presenting a card was sort of like writing a check. When a card was presented, cashiers had to check a book, well actually three or four different books depending upon which card was presented, to see if the card was lost or stolen. Books were updated and sent to stores weekly. Depending on the amount of the transaction, a phone call was made to the bank to provide an authorization. It took forever, and then some.
Hahn, working with a small group of engineers at IBM, found a way to incorporate a coded mag stripe on these cards that not only streamlined the shopping experience but made it possible to get money out of an ATM or present a ticket to ride the subway. As significant was Hahn’s power of persuasion in convincing the National Retail Federation to accept it as a standard that all merchants would accept, greasing the skids for issuers to upgrade their plastic cards and improved the transaction process. When used in conjunction with the electronic terminals
Robert W. Selander | President and CEO of MasterCard From 1997 – 2010
Bob Selander took the reins as President and CEO of MasterCard in 1997 after a twenty year career with Citibank where he was credited with developing its global branch network and managing its Diners Club International credit card business. But the mark that he made on payments goes well beyond his accomplishments in running the world’s second largest payments network.
Selander was the visionary who decided that life as a publicly traded company was the best way to unlock value for its issuers, merchants and customers as payments would continue to evolve. So, in May of 2006, during MasterCard’s 40th anniversary year celebration, his goal was accomplished – MasterCard became the first publicly traded payments network. The $2.4 billion raised during that IPO was one of the largest public company offers in 2006 and changed its governance structure from one that was owned by banks and financial institutions to one owned by and accountable to shareholders.
But that wasn’t the only thing that changed. MasterCard’s decision rubric no longer focused solely on what was good for banks and FIs but rather its shareholders, overall. That provided MasterCard with the ability to create an innovation roadmap that has seen MasterCard break new ground on a variety of fronts as the digital payments age has taken hold. The stock market has rewarded it handsomely, too, with a cumulative 500% return on the value of its shares since it debuted now some 8 years ago.
George Wallner | Inventor of the Modern POS Terminal
George Wallner‘s plan to transform payments as we know it was hatched in his kitchen. The year was 1978 and he and his brother Paul, both engineers, had been tinkering with a few ideas focused on developing large telephone systems and data collection networks. The problem they admit to developing by just “playing with technology” was a system to deliver credit card authorizations to merchant terminals at high speed. The Wallners recognized that merchants needed a way to expedite consumer payments at the point of sale using the mag stripe cards that they now preferred. And the company that they formed, Hypercom, to solve this problem was the first ever to enable the electronic payments that are the bedrock of the modern payments industry.
Hypercom grew into a global provider of POS terminals and support networks. Wallner served in various roles, there including CEO, Chairman and Chief Technologist, taking the company public in 1997 and retiring 7 years later. One might assume that he had nothing really left to prove in payments, but one might be wrong.
In 2006, Wallner went on to invest in ROAM Data, a leading vendor of mobile card acceptance equipment and software that was later acquired by Ingenico in early 2013. His latest venture, LoopPay, really comes full circle. It has developed a practical mobile payment solution that enables smart-phones to be used for card present payments at the point of sale without requiring merchants to install any new hardware or software – leveraging the technology standard that powered the point of sale terminals he invented some two decades before.
2014 LIFETIME ACHIEVEMENT AWARD
The Payments Lifetime Achievement Award is an award presented to someone who has truly left a mark on the payments world over a long period of time. This year, that award will be presented to the family of Frank McNamara, the founder of Diner’s Club.
Lucky for us that in 1949, this businessman both forgot his wallet when he went out to dine at a New York City’s Major’s Cabin Grill restaurant and was embarrassed enough to actually want to fix the problem for all of us, forever. In 1949, McNamara’s wife rescued him by bringing his checkbook and paying the tab.
A year later, he and his partner went back to the same restaurant. But at the end of meal, instead of pulling out cash or a checkbook, McNamara presented a small cardboard card , the Diners Club card, to the waiter that would allow him to eat that day but pay later. At that time, only a handful of people had a card and a handful of restaurants would accept it. But it wasn’t long before Diners Club ignited as did the concept that paved the way for the general all- purpose credit card that drives trillions of dollars in spending around the world.
THE 2013 HALL OF FAME
We proudly announced the 2013 inductees into the Payments Hall of Fame™ on March 21, 2013 during our Innovator Awards at the Innovation Project™ 2013. The Awards Ceremony was emceed by B.J. Novak, writer, producer and star of The Office, and the dinner awards gala was the capstone of the Innovation Project™ 2013 event. Congratulations to all of our 2013 recipients!
2013 PAYMENTS HALL OF FAME™ INDUCTEES
James Goodfellow for Developing The Pin
James Goodfellow is the genius who among other things came up with the idea of using a personal identification number (PIN) to verify the identity of the person trying to take out cash with their card. He came up with the idea of the PIN and other core aspects of ATM technology in 1966. Today, the PIN is used at ATMs and POS devices around the world and is used to authenticate billions of consumers every day.
Goodfellow is a Scottish-born engineer. Working at Smith Industries, Ltd. in the mid 1960s Goodfellow was assigned a project to develop an automatic cash dispenser in 1965. In 2006, the Queen of England award Goodfellow the Order of the British Empire for his development of the PIN and his service to banking.
Max Levchin for Creating Web-Based General Purpose Payments
Max Levchin is one of the founders of PayPal and was the key architect of many of the innovations that helped make it the most widely used web-based payment method. Fifteen years after starting the company PayPal is the most successful electronic wallet, with more than 100 million active users, and what everyone else is chasing.
Levchin founded the predecessor to PayPal in December 1998 with Peter Thiel. After pursuing a few other innovations in payments they settled on web-based payments. They found a natural application on eBay. The rest as they say is history. Born in the Ukraine, Levchin emigrated to the US in 1991, and was trained as a computer scientist before starting PayPal.
Philip J. Purcell for Founding The Discover Card
Philip J. Purcell conceived, started, and successfully ignited the Discover Card which, in 1986, was the first new general purpose payment card brand started in the United States in two decades and in 2013 the last. A senior executive at Sears at the time, Purcell saw the potential of leveraging the Sears proprietary store card into an innovative general-purpose card with no fee and cash back on spend. It grew quickly and within five years established itself as a significant competitor to the three major brand brands.
Today, after acquiring Diners Club—the first general purpose card system—Discover Card has become a global brand. It has also opened its network to key innovators in payments including Google and PayPal and is helping these innovators pursue their own visions. Born in Salt Lake City, Purcell graduated from Notre Dame and the University of Chicago Business School.
2013 LIFETIME ACHIEVEMENT AWARD
Dee Hock for Founding The Visa Bankcard Association
Dee Hock conceived and helped give birth to the modern bank-card association which has become the model for most payment card systems around the world and which helped fuel the rapid and widespread deployment of cards worldwide.
Hock convinced Bank of America, in the face of strife between it and the banks that had franchisees to issue the BankAmericard, to move to an association model in which Bank of America and the other banks would all be members. He then led the creation of governance model and operating procedures for this bank association. He went on to lead many of the early innovations in payments in terms of products and information technology.
While his work helped turn Visa into the most widely used card brand in the world, his achievement lies in business model, product, and technological innovations that are at the foundation of the payment card industry globally.
THE 2014 INNOVATOR AWARDS
On March 20, 2014, PYMNTS.com℠ will hold a closing dinner gala as part of the Innovation Project™ 2014, honoring both new and seasoned payments executives, including inductions to the Payments Hall of Fame™ plus 16 best-in-class awards. From hundreds of submissions, our panel of judges — and our PYMNTS.com℠ readers – will select winners for each of the 16 Innovation Award prize categories including, the coveted “Most Innovative Payments Player.” Click here to learn more.