by Silvio Tavares
President and CEO
The CardLinx Association
In January 2018, few people could have predicted that artificial-intelligence technology would become so commonplace in payments and commerce. But by late 2018, I was boarding planes using a facial scan and no boarding card and not stopping to pay at Amazon Go, because my items were tracked by artificial intelligence (AI).
Last year was a breakout year for payments innovation. As the CEO of a global multi-industry trade association focused on growing online-to-offline commerce worldwide through cross-industry collaboration, common standards and strategic partnerships, I have met with industry leaders, investors and entrepreneurs to discuss their strategies and expectations for global commerce this coming year. Here are the top three themes that emerged for 2019.
1. Cross-Border Commerce Accelerates
It seems counterintuitive. The U.S. is threatening new tariffs on China, and the European Union is stipulating the U.K.’s tax policy even after Brexit. Yet cross-border commerce is positioned to explode in 2019. World tourism increased by 6% in the first half of 2018, and this trend will continue in 2019 as China and other nations use their newfound wealth to travel and buy new things and experiences. New technology platforms are making it easier for tourists to access local restaurants, shops and attractions by reducing the friction in purchases through multi-language support, international payment options or loyalty benefits. Cross-border trade is also accelerating online as payment networks and tech startups address traditional pain points to make shopping on a non-U.S.-based website as easy as on Amazon.
2. The Data Reckoning
Recent scandals at Facebook and Marriott have put a renewed focus on consumer data breaches. What has not been covered well is the trend toward consumers gaining more control of their personal data. Europe’s General Data Protection Regulation, which went into effect in May, gave EU citizens the right to transfer their information from one company to another. This new right has inspired similar legislation in some states and the new Congress will likely consider this legislation in the coming year.
In 2019, companies will fall into two categories: Those companies that consumers trust with their data and those companies that consumers don’t trust due to their poor reputations. If your company ends up in that second category, your ability to compete will be damaged as consumers move their data and their business away from you. Trusted companies will abide by legislation like California’s recent consumer data privacy law, which requires consumer notification of the types of personal data companies collect and why, the right to request that personal information be deleted, the right to opt out of the sale of personal data and the ability to transfer personal information to third parties. To gain consumer trust, companies can be transparent when enacting policies that align with these principles and clearly communicate the changes and their benefits. As consumers turn toward trusted companies, these companies will continue to grow more quickly than others. You probably already know the companies that are not trusted. This will be a tough year for those companies.
3. Commerce And Offers Everywhere
It is pretty clear that 2018 may be the peak of growth for the current economic cycle. As the U.S. and global economy and stock market face more limited growth and even potential decline, consumers will look for more value in their spending. According to The Wall Street Journal(paywall), 92% of card spending in the U.S. was on payments cards that offered cash-back rewards or card-linked offers. That trend will accelerate in 2019 as consumers increasingly expect perks and clever ways to save across all of their digital experiences. Looking for a place to eat dinner tonight? Consumers expect a card-linked offer when they search on Yelp — and they’ll find it. Using a credit card’s mobile app to look for discounts at your favorite retailers? You got it at American Express Offers.
But the deals are not just in search and shopping apps; in 2019, most digital platforms will add contextual offers and discounts, including Google, cars and much more. Contextual offers can take into consideration location, branding preferences, past shopping preferences and even the weather to present coupons and discounts consumers actually want when they need them. These highly personalized offers will provide greater value to consumers while generating more sales for retailers. Card-linked offers lead to more incremental sales as well as sales among first-time shoppers, a win-win. There will be offers everywhere!
Reprinted from Forbes