BY SILVIO TAVARES, PRESIDENT AND CEO, THE CARDLINX ASSOCIATION
Reading tea leaves and gazing into crystal balls are two ways some say they can predict the future. I prefer a more grounded, fact based approach. Observation, conversation and data analysis are my tools of choice for forecasting what’s ahead in our industry.
As CEO of a trade association with members and operations in more than 17 countries—including the US, China, Japan, France, the UK and Switzerland—I have frequent contact with executives of the largest, most innovative companies in the world.
While no one person has perfect visibility into the future, certain patterns do take shape when you speak to as many industry influencers as I do. Based on that collaboration, I now share five key predictions likely to come true in the coming year.
1. DATA OPENS UP – NO LOCK DOWN
The casual observer of privacy trends might come to the mistaken conclusion that new laws like Europe’s GDPR and CCPA are ushering in a period of tighter access to consumer data. The opposite is true.
These legal mandates are in fact mostly about giving consumers transparency, choice and control over how their data is used. Consumers will use their data control to share their information with a broader cross section of apps that benefit them directly.
2020 will be remembered as the year when consumers took charge of their financial data and started sharing it broadly across different tech platforms—to their benefit. Notable examples of the trend include card linked offer programs from CardLinx member companies like Rakuten and Groupon. These organizations enable a consumer to share credit card transaction data through an app that delivers cash back discounts.
2. USA VS CHINA: THE NEW TECH WARS
Mobile technology has been the dominant scale technology for the last decade, and it’s an increasingly central part of the payments and commerce ecosystem. Companies like CardLinx member Samsung and Apple have led the global industry, while lower cost but high value Chinese competitors, including Huawei, have risen rapidly as well.
A little noticed but unintended consequence of the US vs China trade war is that large Chinese companies like Huawei were cut off from their American mobile parts suppliers. In May 2019 Huawei launched the first high-end smart phone competitor to the Apple iPhone 11. It contained not one single US made component. The components weren’t available—and they didn’t let that stop them.
This year expect both China and the US to throw their weight around, pressuring smaller economies to choose one or the other as their primary tech source. This will have an impact on everything from payment technologies (QR codes, NFC) to credit cards and 5G. It will be particularly challenging for markets like Japan, South Korea, Germany and the UK that enjoy good trading relationships with both the US and China.
3. APPLE CARD CLIMBS TO TOP 10
Apple Pay was introduced nearly six years ago, but it never really caught on. Let’s face it, in the US, Europe and Asia, credit cards are easy to use and mobile wallets, well, aren’t. Apple execs figured that out in the years since the 2014 launch, leading to their second salvo in the payment wars: The Apple Card. Launched in August 2019, Apple opened more than $10 billion in credit card accounts in the US alone in the first month. All data to date points to dramatic growth for the new Apple Card.
My prediction- 2020 will be the year Apple Card rockets to become a top 10 issuer of credit cards in the US—and enters new markets including Japan, the UK and France. Why the rapid success? Cash back offers are an essential component of the Apple Card offering. Credit card issuers that don’t feature cash back offers from merchants will have a difficult time competing in 2020. And those without a companion mobile app, they’ll find it hard to grow as well.
4. CROSS BORDER SHOPPING SPIKES
2020 marks the year Chinese consumers in Shanghai will find it as easy to buy Levis Made In The USA jeans as US consumers in Chicago find it to drive to their local mall and purchase Nike sneakers manufactured in China.
It wasn’t long ago that buying goods from a merchant in another country was challenging. There were customs forms to fill out, currency exchange rates to decipher and plenty of hassle. Due to advances in shipping and e-commerce technology, this is no longer the case.
CardLinx member merchants like luxury retailer Harvey Nichols based in London and LVMH-24S based in Paris are growing their cross border businesses by triple digits. In the coming year, I foresee consumers increasingly buying from merchants in other countries in ways almost transparent to them—giving them more access to more goods with unprecedented convenience.
5. THE END OF CASH – THE NEW “CORD CUTTING”
About a decade ago, people started cancelling their landlines, using mobile phones exclusively. Now more than 50% of US homes are landline-free. Over the past five years, an increasing number of Americans have cancelled cable subscriptions, relying purely on streaming services like Netflix and AppleTV for video content.
This is the year US consumers stop carrying cash in their wallets and start relying solely on their payment cards and mobile wallets.The trend for technology to give us new and better ways to manage our lives will continue in 2020.
Incredible but true. As a global traveler I visit more than 10 countries a year for business. Keeping that many different national cash currencies in my wallet had been quite a challenge. So, two years ago I stopped. To my surprise I found I did not need cash in most of the world’s leading cities. A few credit cards and a mobile wallet worked fine. The average consumer is coming to the same conclusion in their everyday life—no cash is needed. My prediction: This phenomenon goes mainstream this year.
Here’s wishing all of you a productive 2020 – it will be a great year in our industry!
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