The term “technical debt” usually refers to shortcuts or suboptimal approaches during software development. It manifests itself as poorly designed code, lack of documentation and outdated components. While properly written code and documentation are timeless, components and approaches are not. Software and its components can become technical debt over time. Since the software industry flourished in the 1980s, around 40 years ago, it is a relatively new phenomenon that we encounter completely outdated software concepts, processes and systems now.
Technical Debt is a problem for the entire economy now
Technical debt can be small software components, libraries, code or algorithms that are simply made obsolete by newer knowledge in computer science. Beside software code or components, that can also apply to entire system designs and architectures. In fact, in todays world, there are numerous cases of entire industries relying on processes, technology, communication protocols and other technology components that can be defined as technical debt. There’s no industry on the planet that currently does not suffer from technical debt, outdated processes and systems. Outdated systems doesn’t mean the software has reached its end of life, but merely the processes and algorithms inside it have.
Financial services: payments and investing
You think contactless payment is a modern technology? Look twice. Yes, the NFC technology is relatively new. However, there are still the same old protocols under the hood: ISO 8583 and compatible equivalents. Your iPhone and Android devices still “emulate” a credit card capable of communication with network protocols dating back to 1987, more than 35 years ago. EMV or smart card payment even dates back to the late 1960s. Contactless payment through NFC is more or less just added as an extension (ISO 14443) to the existing standards.
Card payment has changed very little over the past 20+ years
While arguably, card payment works and drives our economies, there are very few alternatives. Getting into the card issuing or payment processing business has also long been a very challenging and highly regulated affair. Only with the appearance of Stripe, Adyen, PayPal and other…