Chase Predicts: Insights from an Expert

As we swiftly plough through January with another Consumer Electronics Show under our belts, 2019 tech trends are starting to reveal themselves. AI and robotics are continuing to push boundaries, smart products are taking over everyday household items and at the helm, mobile technology is a consumer’s primary control panel.

Although the application of tech trends may seem to fall predominantly on the consumer side, retailers aren’t being left out in the January cold. In fact, tech advancements have lent themselves to businesses and retailers in a number of important and revolutionary ways. Our partners at Chase—the largest bank in the US and one of the largest processors in the US—have their pulse on how trends, specifically those of mobile technology and data security, will continue to innovate product in the payments space. Read our guest post below where Preston Edwards, Executive Director & Head of Strategic Partnerships for Chase Merchant Services, discusses the payment patterns that are sure to affect merchants this year.

Trend 1: EMV is now the standard in the US

In June 2018, Visa reported that 400,000 new US merchant locations began accepting EMV chip cards that year, adding to a total of 3.1 million locations accepting chip cards in June 2018. EMV doesn’t just belong to the enterprise retailer any longer, but rather US retailers regardless of size will continue to flock to EMV technology for its proven fraud prevention.

Preston’s Take: “If you’ve not migrated to an EMV-compatible solution, now is the time to do so.  Chip transactions are inherently more secure than magstripe, and payment brand rules now place full chargeback liability on merchants who choose not to process EMV-compatible transactions.”

Trend 2: Loyalty continues to play an important role in the evolution of value-added transactions

A 2018 article by Bloomberg explains that “Several chains, including Walmart Inc., Starbucks Corp. and Kohl’s Corp., have had some success by baking [payment] apps into their loyalty programs.” It goes on to mention that a recent National Retail Federation survey found that nearly half of all retailers polled said they’ve implemented “branded digital wallets” or are considering it. By fusing payments, mobile tech, and rewards together, traditional transactions provide richer data points for retailers and increased purchasing power for consumers.

Preston’s Take: Payments are becoming less about the simple movement of money between parties, and more about the end-to-end experience that includes the transaction itself as just a component of the broader value exchange between merchant and customer.”

Trend 3: Mobile technology is fueling the payments evolution

Remember the geofencing feud between McDonald’s and Burger King? The one where Burger King targeted guests who were currently in or around a McDonald’s location with an ad for an almost-free Whopper through their BK app? You can read all about it here. On the outside, this may just look like a tantalizing PR stunt but upon closer examination it’s also an impressive use case of mobile technology driving in-store retail sales.

Preston’s Take: “Consumers are increasingly expecting to use their mobile devices to complete their shopping experiences, both at the point-of-sale and in e-commerce settings; location data and “geo-fencing” will increasingly be used by merchants to create a more customized in-store shopping experience for customers.”

Trend 4: Consumers will continue to favor brands who implement omnichannel retail strategies

Consumers have always valued choice when it comes to the products and services they purchase, but nowadays brands must also provide options in how consumers discover and purchase those goods. Omnichannel has become a buzzword in recent years, but the need to cross over from physical to digital and back again is as persistent as ever. Brands who can elegantly provide that cross over while still maintaining a consistent personalized shopping experience across all channels, will out perform brands who don’t.

 

Preston’s Take: “Convenience and service will increasingly become a key differentiator between competing merchants – Consider, for example, the incremental value of enabling your customer to purchase a product from your store on their mobile device for pickup, allowing them to avoid wait times in the store.”

Trend 5: Best practices in cybersecurity will begin to differentiate players in the payments industry

2018 was one of the worst years yet for significant data breaches among some of the world’s most pervasive brands like Reddit, Facebook, Uber, British Airways, and the Marriot hotel chain. As omnichannel strategies continue to interconnect with data rich sources like social media platforms and financial systems and the IoT trend makes its way into more households, the likelihood of catastrophic data breaches with large scale consequences is as present as ever. Even still, retailers shouldn’t be quick to throw in the towel and return to their analogue ways. Along with new threats come new protections including smarter IoT botnets, secure blockchain systems and, as Preston reports, established players making it a priority to protect customer data.

Preston’s Take: “As the payments space continues to evolve and innovate, the velocity and complexity of identity theft, fraud and cyberattacks by bad actors will increase.  Make sure to choose business partners with a demonstrated commitment to data security and rigorous controls to protect valuable customer data (while the data is in flight and at rest).”

 

From EMV domination to new data protections to the evolution of loyalty and the wide-spread adoption of mobile technology, 2019 payment tech trends may be ripe with disruption but also carry an underlying theme of realism. Trends that were conceptualized in the past are being realized today with brands harnessing technologies in ways one could only dream of before. 2019 will be witness to more barriers pushed and more use cases discovered and iterated upon. Retailer will become smarter, richer in data, and hopefully more adaptable to the ever-changing competitive retailer landscape.

Want to stay on top of the trend and ahead of the competition with the most secure payment processing solutions? iQmetrix can help. 

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About Preston Edwards: Preston Edwards is Executive Director & Head of Strategic Partnerships for Chase Merchant Services.  In this role, he leads business development and relationship management functions for a diverse portfolio that includes associations, technology platforms and franchise programs.  Preston holds bachelor’s and master’s degrees from Baylor University, and has spent the majority of his career in financial services, specifically payments.