ISSUE NO. 75– March 2020
Expect the Unexpected in Covid-19's Wake
In the uncertainty that surrounds the coronavirus, Silvio Tavares, CEO of industry trade association Cardlinx, shared perspectives with member executives around the world. Among topics discussed? Travel’s stalled, with hotel occupancy at just 15% and properties slated to close; credit card use is down, impacting the U.S. and other countries where consumer spending accounts for 70%+ of their total economies; and payment networks like Visa and American Express are taking significant market cap hits.
The news is bad, but it’s not all doom and gloom. There’s a surge in ecommerce spending, growing demand for gig services—and heightened interest in money-saving offers. As consumers shelter in place, online sales growth is expected to increase by 50%. Employment opportunities are increasing as Amazon and others continue to hire. Ride-sharing and delivery companies will grow to meet consumer demand. And card-linked offers will fare well in the near future as consumers become more price sensitive.
Listen to the inaugural Fin-Tech Fridays podcast and learn more.
Collinson Valuedynamx Launched
CardLinx Member Collinson Group Ltd today announced the creation of a new business unit. The global loyalty and benefits company has launched Collinson Valuedynamx to deliver on the need for an integrated and secure platform to enable personalized, low-friction earn-and-redeem experiences.
The new entity was created to drive innovation where data, payments, technology and rewards intersect: Consumers, retail/merchant partners and client loyalty programs all stand to gain by establishing and growing mutually beneficial relationships within the ecosystem.
By creating a separate entity backed by its 30-year track record successfully delivering customer-based loyalty solutions including Priority Pass, Collinson has set itself apart. Consumers will benefit from more opportunities to earn and redeem points, miles and currency. Retailers and merchant partners will benefit from targeted and permission-based access to millions of affluent customers. And loyalty programs in travel and financial services sectors will benefit from the ability to drive deeper brand engagement.
Ant Financial Buys Minority Stake in Klarna
As part of a global partnership, Ant Financial, the payment affiliate of Chinese e-commerce giant Alibaba, has invested in Klarna. The companies announced that Ant Financial has purchased a <1% ownership in the Swedish financial technology start-up, known for offering shoppers interest-free financing over monthly installments.
Ant Financial is an affiliate of Alipay, China’s largest mobile wallet and largest fin-tech. The investment in CardLinx member Klarna follows a disciplined playbook of strategic investments by Ant Financial around the world including in India and Japan. The move indicates that consumer lending and payments have become one and the same business (whereas previously payment networks operated separately from banks and consumer lenders). Increasingly digital lending, offers and installments will become a part of every merchants’ and mobile wallets’ offering to consumers.
Amazon New "Cashierless" Payment to Face Slow Merchant Uptake
Amazon announced the availability of its Just Walk Out technology to rival merchants. Shoppers use credit cards to enter the store. Items are selected and automatically billed to the card—with no scanning, checkout (or waiting in line) required. The tech is similar to that used in Amazon Go stores.
Amazon’s new cashierless technology will face an uphill battle for acceptance by merchants. Most merchants will not adopt the technology because they view it as a “trojan horse” for Amazon to collect valuable consumer data that Amazon will ultimately use in its own stores. The only types of merchants that will likely adopt the technology are those that don’t compete directly with Amazon, including gas stations, airport stores and fast convenience stores. Instead, most retailers will likely fast track their own “cashierless” solutions embedded in mobile apps and emerging mobile wallets.
The Top 10 Mobile Wallets Gain Share Because of Offers
10 MOBILE WALLETS THAT LEAD THE INDUSTRY
After years of false starts, mobile wallets are finally gaining traction in the global marketplace. Offers have become the de facto “killer app” for mobile wallets, driving their increased consumer acceptance and usage.
Mobile Apps give consumers digital access to their payment cards, cash balances, coupons and rewards via smartphones and other devices. Using smartphones, smartwatches or tablets, online and offline shoppers are increasingly using mobile wallets to take advantage of personalized offers.
The CardLinx Association is a non-profit trade group with members in 17 countries and on four continents (www.cardlinx.org). Members include Microsoft, Rakuten, Samsung, UBS and RBC to name a few. CardLinx recently evaluated mobile wallets worldwide based on four key factors:
Read on to find out what these category leaders did to make the list.
THE TOP 10 MOBILE WALLETS:
With more than 400 million users around the globe, the Alipay mobile payment platform powers millions of transactions per day. Owned by online merchant Alibaba and an affiliate of fintech provider Ant Financial, Alipay supports Visa, Mastercard, Japan’s JCB and Singapore’s Diners Club cards—and enables card-linked offers and push notifications based on buyer behavior.
2. WeChat Pay
This mobile payment application is integrated into the WeChat messaging and social media platform used by more than 1 billion people in China and beyond. Using WeChat Pay, merchants can develop personalized business strategies, customize card-linked offers, and provide easy access to coupons and rewards that drive sales and loyalty.
3. Apple Pay
Apple Pay is a mobile payment and digital wallet service that lets consumers make secure purchases in stores, in apps and on the web using iPhones and other Apple devices. Users can also send and receive money from friends and family, as well as take advantage of 3% cash-back offers linked to Apple Pay and Apple Card. These cash back offers are available for many US merchants including Duane Reade and Walgreens.
4. Samsung Pay
Samsung Pay is a mobile wallet service that lets users make payments using compatible phones and other Samsung-produced devices. Accepted at millions of places, Samsung Pay works in-store, in-app and online, allowing shoppers to load payment, loyalty, membership and rewards cards onto their devices and check out with a tap.
5. Google Pay
Google Pay is a mobile wallet and online payment system that powers in-app, web and tap-to-pay purchases. For NFC and in-app this is on Android phones, tablets and watches. For web, GPay works across all major browsers and operating systems. Google Pay lets users pay in stores via NFC using cards authenticated and saved to their devices and in addition it also supports the cards saved to your Google Account for web purchases. It is easy to send money, store tickets and boarding passes using Google Pay.
More than 19 million online stores accept PayPal, which lets consumers send, request and collect money from family and friends; easily check out online; and pay with debit/credit/prepaid cards or digital credit line. By linking credit cards to PayPal, users collect rewards every time they use the mobile wallet.
M-pesa is a banking service that enables international transfer of funds via mobile device. With 4 million customers, 800 employees and 150+ countries served, M-pesa gives people the ability to quickly, cost-effectively and securely send money needed for healthcare, education and living expenses across borders.
This free mobile wallet lets people pay friends and family who also have Venmo accounts using money in Venmo, in their bank account, or via a debit or prepaid card. (There’s a 3% fee if a credit card is used.) Users can also apply for the Venmo Mastercard debit card which automatically earns rewards each time it’s used.
9. Amazon Pay
Amazon Pay optimizes web and mobile checkout with an experience customers know and trust. Leveraging Amazon.com consumer information, Amazon Pay streamlines the payment process at third-party (non-Amazon) sites. Shoppers access debit/credit cards and address information from their Amazon account to conveniently pay.
Masterpass is a password-free digital wallet by Mastercard. The online checkout option gives consumers a faster, more consistent check-out experience across ecommerce sites by storing all payment/shipping information in one location. Shoppers pay with any participating credit or debit card—not just Mastercard—and benefit from linked rewards, coupons and cash-back programs.
We Welcome Interac Corp. to The CardLinx Association
We welcome Interac Corp. to The CardLinx Association. Interac is one of Canada’s leading payments brands and is chosen an average of 16 million times daily to pay and exchange money. Interac has a diverse group of shareholders that includes banks, credit unions, caisses populaires, payment processors and merchants. Interac provides Canadian cardholders with point-of-sale access at roughly 2 million U.S. retailers, and ABM access for cash withdrawals to foreign cardholders in Canada. For more information, please visit: interac.ca
HOW DOES YOUR COMPANY FIT INTO THE CARD-LINKING OR ONLINE-TO-OFFLINE COMMERCE ECOSYSTEMS?
WHO ARE YOU TRYING TO REACH?
daVinci has strong strategic partnerships with the major payment networks and payment processors to offer custom payout programs for the card-linked technology providers and publishers.
HOW WILL YOUR COMPANY APPROACH ONLINE-TO-OFFLINE COMMERCE THAT IS NEW OR DIFFERENT?
The approach from daVinci is unique as our payment solutions are at the intersection of the on-line to offline commerce. We appeal to the offline merchant to drive more traffic and loyalty to the brands yet we target the online consumer as well as defined by our client base offering a unique combination of payment incentives + options geared towards enhancing a brand or a behavior. daVinci delivers virtual and physical payments via linked offers to be spent with specific retail partners or categories, virtually and physically embedded in advanced branded engagement opportunities and in multiple currencies.
WHAT ARE SOME INSIGHTS OR CHALLENGES IN IMPLEMENTING OF YOUR SOLUTION?
Being a provider of payments globally to consumers and businesses is very challenging from a regulatory and service standpoint. Since 1996 daVinci has pioneered to be an innovator within the payments space to offer a clients a breadth of options that appeal to multiple demographics. We continue to be challenged with providing the best user experience and offering a global array of payment options custom tailored to meet the unique use cases of every client. The backend for global and virtual payments can be complex from a regulatory and implementation perspective. But, daVinci has simplified the process for its partners. And while daVinci’s payments are advanced and sophisticated, connecting to them through daVinci’s API Simplified™ is quick and easy. daVinci’s API Simplified™ team works closely with partners to identify program specifications as quickly as possible. Once those are approved, the team begins loading, launching and testing API integration for a fast and smooth launch to assure we are efficient and effective with your time. Since 1996 daVinci has pioneered to be an innovator within the payments space to offer a clients a breadth of options that appeal to multiple demographics. We continue to be challenged with providing the best user experience and offering a global array of payment options custom tailored to meet the unique use cases of every client.
WHAT ARE SOME NEW PROJECTS FOR THIS YEAR?
- daVinci’s Brand Accelerator provides branded engagement during and post payments including videos, rewards, auto enrollments in loyalty and product registration, surveys and more.
- daVinci’s Payment Accelerator delivers virtual prepaid rewards in advance of an action, like visiting a retail location and are activated once desired behavior is achieved.
- daVinci is the first prepaid program manager in North America to issue the Chinese Yuan currency and delivers payments to over 160 countries.
- daVinci opened a London office to support all the work we are doing throughout Europe.
- daVinci conducts research studies on payment behaviors across a spectrum of use cases including shopping demos like Gen Z, Millennial, Women and Men.
HOW WILL THE ONLINE-TO-OFFLINE COMMERCE INDUSTRY DEVELOP OVER THE NEXT FIVE YEARS?
Our recent shopper studies across a broad spectrum of generations and even gender have found online pre-shop is significantly diminishing decisions actually made at physical presence. Price is and total value is now the number one factor in making a purchase decision, so much so, they will choose richer rebates over instant discounts and name brands have diminished in importance as has retailer preference. Shoppers are more loyal to a brand when thoughtful, surprise savings are offered to them even when those offers are not for the brand. Mobile payment use is up significantly and the majority find more value in a virtual prepaid card sent to their phone, even if directed to spend at a single location, than an instant discount. Five years from now, the best partner loyalty programs will drive the majority of traffic to offline.
IS THERE ANYTHING ELSE YOU WOULD LIKE CARDLINX MEMBERS TO KNOW?