By Andre Stoorvogel, director, product marketing in the payments division, Rambus
The bright lights of Las Vegas have gone out on Money20/20 for another year. As always, the event brought together the biggest names in payments and provided unprecedented insight into the future of financial services.
So, after four days of discussions and demonstrations, what were the three big trends from this year’s installment?
Artificial intelligence: Enabling hyper-personalization
This was the year that artificial intelligence (AI) arguably overtook blockchain as the biggest buzzword in payments and became the latest mega-trend to revolutionize the industry.
AI has the potential to profoundly impact all areas of payments and financial services delivery, and indeed already is in some areas. Consumers can now use smart assistants, such as Alexa, to pay their credit card bills or order groceries, and sophisticated AI chatbots can be deployed to screen and respond to customer enquiries.
But for both banks and (particularly) retailers, perhaps the most immediate and powerful opportunity presented by AI is the ability to get closer to their customers than ever before and deliver hyper-personalized experiences. For example, shopping data can be intelligently deployed, leveraging past and predicted behavior across numerous channels to provide retailers with a more nuanced and accurate consumer profile. This profile can then be applied to deliver smart, unique recommendations or push tailored offers and discounts.
Despite the hype, however, there is still a long way to go for AI. As Apple co-founder Steve Wozniak explained at the show, AI is smart but not yet truly intelligent. But as deployments become increasingly sophisticated and advanced, AI will undoubtedly have a transformative impact on the industry.
Mobile payments: Going beyond in-store to embrace ‘everyday commerce’
Mobile wallets used to be synonymous with in-store contactless NFC transactions, with wallet providers positioning the mobile solely as a like-for-like replacement of plastic cards. As the mobile payment ecosystem has evolved over recent years, however, wallets are diversifying beyond in-store transactions and embracing ‘everyday commerce’, incorporating features such as transport and event ticketing, order ahead, and sending money to friends.
Indeed, Apple confirmed that ‘everyday-commerce’ transactions are growing five times faster than in-store mobile transactions. Deals with Ticketmaster to bring mobile contactless tickets to concerts and sporting events, as well as a partnership with the New York City Metropolitan Transportation Authority to accept Apple Pay on the New York Subway, are indicative of this shift. Similarly, Amazon announced that users will be able to order takeout from participating restaurants.
This move towards everyday mobile commerce will also be supported by broader demographic trends. Accenture identified that Generation Z (or post-millennials) will account for 40 percent of all US consumers by 2020. As these consumers have only ever lived in a world with Google, Facebook and Amazon, they are far more comfortable with the concept of using mobile to perform a number of financial functions. This creates opportunities for wallet providers to go beyond in-store payments and deliver enhanced experiences across various commerce environments.
Security: Adapting to the digital era
Fraud is changing. The success of EMV at countering fraud at the physical point of sale has seen the threat migrating to the card-not-present environment, with e-commerce merchants seeing a 5.5 percent increase in fraud and losses rise to nearly $60 billion.
EMVCo’s Tokenization 2.0 Specification is addressing these challenges by extending support for emerging e-commerce use cases to ensure a secure remote payments environment. This is an extremely positive move for the industry. But on the floor at Money20/20, conversation was also focused on extending tokenization technology beyond payment credentials to other data points implicated in fraudulent activity.
Just consider the overwhelming trend towards bigger and more damaging data breaches, and how their impact could be mitigated by the security, risk management, confidentiality and privacy afforded by dynamic tokens. And as more sensitive services and documents are digitalized, including passports and social security numbers, the argument for universal tokenization looks increasingly compelling.