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Key Digital Commerce Insights from Money 20/20 US

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Money 20/20, which took place in late October in Las Vegas, has in five years become the premier global event at the intersection of technology and financial services. Among other topics, this four-day affair takes a deep dive into the emerging connected consumer concept and the impact these digital shifts are having on payments, retail and marketing. Given that this event attracts 10,000-plus attendees, there are no shortage of digital commerce insights and perspectives on how this space will evolve.

Here are eight key insights from my Money 20/20 experience:

Anytime, anywhere commerce

Commerce is no longer restricted to a physical outlet. There are not a plethora of commerce facilitators from computers to smartphones to consumer appliances to connected cars all enabling new ways of paying. The challenge is that merchants have to be always on. “Commerce for us is expanding in terms of how it looks for the consumer,” explained Walmart’s Senior Director of Payments Strategy Reed Luhtanen during one of the panel discussions. “Commerce for us is being available for consumers to shop how they want and to pay as they want.”

Putting commerce in context

Digital has enabled commerce to take root in new and unexpected places, both online and offline. From social networks and content sites to scannable print ads to virtual shopping wallets to peer-to-peer business models, brands can engage with consumers in new and sometimes less obvious locations than they have every have been able to do before. Although there are examples of brands active in the contextual commerce arena, this is still a nascent concept. “Contextual commerce is like searching for Big Foot right now,” joked MasterCard’s Les Matthews, who is the senior vice-president of digital partnerships. “There are sightings.” Another panelist Harper Reed, who is the head of commerce at Braintree, advised attendees to design for discovery and intent separately.

From everyday devices to conduits of commerce

From the ring on the consumer’s finger to the refrigerator in the kitchen, players across the ecosystem are exploring ways to embed what once seemed like futuristic commerce applications into everyday items. The idea of leveraging all these newly connected things as conduits for commerce is not a simple task, though. During the conference, Mastercard announced a partnership with Fit Pay Inc., which will integrate Mastercard’s contactless payments technology within the Fit Pay platform in order to more efficiently and effectively deploy connected things in the commerce environment. “We have a lot of payment knowledge. The have device knowledge,” explained James Anderson, MasterCard’s executive vice president of digital payment products, in an interview with Euromonitor International. “It is a little complex to integrate payments into these devices. There is a gap there and someone is going to fill it and we think it will aggregators like Fit Pay.”

Know thy consumer

In this mobile-first world, the possibilities in terms of connecting with the consumer before, during and after a purchase are endless, though few do it in a seamless manner. Merchants of all types expressed a desire to better connect those dots in order to further other initiatives, such as reducing fraud or providing more meaningful consumer engagement. “If you are a vegetarian, we want to stop sending you Baconator coupons,” quipped Gavin Waugh, vice-president and treasurer at the Wendy’s Co, during one of the panel discussions.

Integrating loyalty into payments

Mobile payments adoption has been slower than many industry experts projected it would be as would-be providers have not given consumers a compelling reason to adopt. Ultimately, mobile payments must be as cheap, secure and easy to use as traditional payment methods to even be considered a viable option. One of the first steps towards providing consumers with a viable reason will be the continued integration of offers and rewards into the mobile experience. SimplyTapp, which is an Austin-based startup behind the Host Card Emulation technology used a mobile wallet like Android Pay, introduced a new mobile app that more seamlessly connects the payments and loyalty dots. The mobile app dubbed Gane enables consumer to automatically collect and apply discounted offers in one mobile experience. ”The idea is that you should not have to disrupt your current experience,” explained SimplyTapp President Ted Fifelski in an interview with Euromonitor International. This new app could be likened to the mobile-first version of card-linked offers.

US mobile payments progress slowed by EMV transition

There has been plenty of hype in the industry about the opportunities that could surround a mobile-enabled environment, especially if the in-person commerce experience could be digitized and connected to a consumer’s online persona. However, the migration to chip-enabled cards in the US and the general emphasis on security initiatives has dominated the recent agenda of technologists across issuers and merchants of all shapes and sizes. The EMV migration served as a distraction for mobile commerce initiatives that could drive future sales.

China’s Alipay coming to the US

As of 2016, China accounted for 58% of mobile-based commerce conducted across the 46 markets in which Euromonitor International conducts such research. Alipay, which is China’s biggest mobile payment service provider, is looking to replicate that success abroad. As a result, it has been aggressively expanding into foreign markets like Australia, Germany and the UK and announced deals with VeriFone Holdings and credit card processor First Data Corp during Money 20/20 to propel its push in the US. Alipay, which is a service of Ant Financial Services, a spin-off of the Chinese internet giant Alibaba, will target Chinese tourists traveling abroad, but this recent strategic shift also will better position it to join the global ranks of international payment networks like Visa and Mastercard in broader acceptance beyond its home market. Alipay aims to expand its base from 450 million to 2 billion users within the next 10 years.

Digitizing small- to medium-sized businesses

Like their big-merchant counterparts, small- to medium-sized businesses have to explore how to reach the new digitally connected consumer or risk being left behind. As a result, many of these smaller merchants are exploring new commerce software and technologies that would enable it to be better compete with the physical locations and online portals of the largest merchants. In order to better help these small businesses keep pace with the speed of transformation, Verifone designed a portable countertop with dedicated merchant and consumer-facing tablets for optimal engagement. This POS terminal can accept all payment methods today and is designed to be able to do so in the future. In addition, merchant can access a variety of applications to tailor the checkout experience to its merchant type regardless if it sells coffee or fashion. One of the apps is from TruRating, which enables merchants to gather consumer sentiment at the point of purchase. “This is where marketing and data come together for a more immersive experience,” explained President of Verifone Europe June Felix in an interview with Euromonitor International.

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