Payments Outlook - Nets Innovation Hub
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Payments Outlook
Nets Innovation Hub
The future isn’t what it used to be
Payments Outlook 2020
Content
2 Fluid Commerce 6 Decentralized Trust
Predictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Predictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Insight. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Insight. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Perspectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Perspectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Introduction to Outlook 2020
Looking Ahead. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3 Customized Privacy 7 Responsible Consumerism
Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Predictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Predictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Insight. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Insight. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Perspectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Perspectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Identified Trends Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Consumer, Technology, Market, Regulation . . . . . . . . 5
Radar Framework. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4 Quantified Self 8 Glocal Commerce
Predictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Predictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Themes for 2020 Insight. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Insight. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Perspectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Perspectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Themes Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
2020 Themes in 20 Seconds . . . . . . . . . . . . . . . . . . . . . . 7
5 Simultaneous Bunding Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
1 Seamless Access to Funds and Unbundling
About. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Predictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Predictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Insight. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Perspectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Insight. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Perspectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34
35
Get in Touch. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3
Payments Outlook 2020 Introduction to Outlook 2020
Introduction to Outlook 2020
COVID-19 Looking Ahead Methodology
This report was finalised before the Corona- The digital transformation is upon us, and To identify new themes relevant to merchants and the payment industry, we reviewed
virus pandemic caused a dramatic change to it is picking up the pace. Although it may more than 70 reports from leading industry researchers and consulted more than 300
our society. Nevertheless, we believe that the not seem so rapid in real-time, the chang- online sources. Furthermore, we interviewed experts within the Nets Group as well as top
themes we have identified will be even more es are all around us. That is because we industry experts. From all those sources we identified 64 trends that could potential-
relevant for merchants in a post-pandemic are expe riencing the changes on a day- ly impact merchants and the payment industry.
scenario. In fact, in times of hardship, work- to-day basis with minor updates, new fea-
ing smart becomes even more important than tures, and new smart devices. At least that
working hard. is how it feels to consumers. They tend
to gradually ease into the change be-
Once the world has recovered, there is one cause it is essentially serving their needs.
thing we can be certain about: things will not It is the merchants , not the consumers, Desirability
be the same! The digital transformation that we who will have a hard time keeping up with (consumers)
predict and describe in this outlook is not going demand, trying to foresee the future.
to disappear, it might even be amplified by this
event. In order to cope with closed shops and This is where Nets Innovation Hub comes
social distancing, consumers are now forced to into the picture. We are on a mission to help
change their routine by increasingly engaging merchants deliver a consumer experience
in the digital world, and we can imagine that with ever more frictionless payments. In or-
some of these new habits are here to stay. der to stay ahead of the curve, we want to Goal
look into the future, and see if we can identi-
Although the long tail is hard to predict, these fy trends. Before we get carried away let us Feasibility Viability
changing conditions require a change of ap- make it absolutely clear: predicting the future (tech) (business)
proach: that is why we, at Nets, have been is an impossible task. However, following a
and will keep investing heavily in innovation, systematic approach to spot trends goes a
to make sure we stay relevant and give mer- long way. We have identified eight themes
chants all the tools to do the same. that are naturally interlinked and likely pave
the way for new payment methods.
4
Payments Outlook 2020 Identified Trends
Identified Trends
In this section we list Consumer Market
all the trends we have
A1 Digital Detox A5 Circular economy D1 Subscription Economy D11 Open Banking
identified during our
research. Each trend is A2 Sharing economy A6 Health tracking D2 Online Marketplaces D12 Omnichannel integrated experience
placed in one of the four A3 Customization A7 Sustainable consumerism D3 Sustainable Development Goals (UN) D13 Circular Economy
categories; Consumer,
A4 Data minimalism A8 Sub-sub cultures D4 Personalization for the masses D14 European Cashless Conversion
Technology, Market
or Regulation. D5 Product Bundling B15 Platform economy
Technology D6 Micro payments B16 TechFin Market entry
B1 Speech Recognition B13 Quantum Computing
D7 Payments as a service (PaaS) B17 Account to account
B2 Emotional recognition B14 Neuromorphic Computing
D8 Market Consolidation B18 Mobile wallets
B3 Computer Vision B15 Holographic and haptic interfaces D9 Strategic Alliances B19 Alternative payment methods
B4 AI in BI B16 AR/VR
D10 Cash Conversion
B5 AI Hardware B17 Wearables
B6 Real Time Personal Analytics B18 Sensors and Intelligent devices Regulation
B7 Brain-Computer Interfaces B19 Connected homes C1 GDPR C8 eIDAS
B8 Biometrics B20 Autonomous Mobility C2 PSD3
C9 PSD2 in effect
B9 Crypto Wallets B21 Micro & Nano Tech C3 Accessibility standards
C10 AML6
B10 Smart Contracts B22 Physical Robots C4 AML5
C11 SCA Introduction
B11 Edge computing B23 Digital Personal Assistants C5 MIFID II
Basel III
C12 GDPR Article 6(1) clarification
B12 Serverless computing B24 DLT (Distributed ledger technology) C6
C7 Pan-EU P2P Payments C13 5MLD
5
Payments Outlook 2020 Introduction to Outlook 2020
MANY
Years to Impact
B7
B16
Te
c
B12
er B22
hn
B5
um
B13 B3 B15
ol
A5
ns
Radar Framework
B1
og
B17
Co
y
B18
A6 A4 B23
B8 B4
In order to understand these trends, we B14 B21
B6
have developed a framework inspired by A8 B24
the three dimensions of design thinking. As A7
regulatory requirements are highly impor- A2 B9
B20
tant (and impactful) to the financial sector, in
particular to the payment industry, we have B2 B10
added regulatory as a fourth dimension. A1 A3
B19
• Desirability: Payment Relevance Payment Relevance
FEW
B11
Consumers
• Viability: Market
LOW HIGH HIGH LOW
Feasibility: Technology
FEW
D1
• Compliance: Regulation
D4
D3 C4
• C6 C5
C11
D11 D2 D5
C1
D18
C3
Each trend is placed in one of the four
dimensions: Technology, Consumer, Market D9
or Regulatory. Furthermore each trend is D16 C12
measured with respect to relevance to pay-
ment (x-axis), years to materialize (y-axis), D15
D17 D6 C8
and the bubble (size) is the perceived impact, D13
C9
D7
in relative terms of the particular trend im- D14 C10
pact of the particular trend. The closer a bub- C2
ble comes to the center the more relevant it is. D8
M
n
ar
tio
t a
Years to Impact
D10 D19
ul
ke
D12 C7
g
Re
Read more about the
‘Identified Trends’ MANY
6Payments Outlook 2020
Themes for 2020
Themes Overview 2020 Themes in 20 Seconds
Based upon the Outlook Radar we conducted New seamless ways for consumers to we call “quantified self”. Lots of consumer
Seamless Access to Funds
several workshops with industry and inno- access funds will craft new personalized data will be generated, and its distribution
vation experts - internal and external - turn- Fluid Commerce experiences. These will allow merchants to across different platforms together with the
ing trends into themes. Many discussions establish new touchpoints and deliver value proliferation of the so called “API economy”
Customized Privacy
and combinations of trends were proposed, propositions around consumer identifica- will lead to new waves of disruption through
explored, analyzed and combined. At the end Quantified Self tion. The touchpoints will further boost the simultaneous bundling and unbundling
,consensus was reached upon the following development of new kinds of merchant-con- cycles. On the flip side, data dispersion and
themes for the Payment Outlook 2020.
Simultaneous Bundling an sumer interactions. Commerce will become the consequent demand for privacy, con-
Unbundling increasingly fluid: online and in-store will trol and trackability, will continue to drive
Decentralized Trust blend together and increase customer value. investments towards the exploration of
Consumers will lead their path to purchase, blockchain technologies and systems allow-
Responsible Consumerism and expect flawless interactions between ing for decentralized trust by design.
channels.
Glocal Commerce
At a macro-level, consumers’ awareness
Data collection and profiling will be fun- towards of social and environmental issues
On the following pages we will describe each damental to deliver seamless interactions. will continue to increase. Companies need to
theme, rationalize why we think it is impor- Hence, merchants will need to address con- address the growing demand for responsi-
tant, and last but not least, we will make sumer rights and the request for privacy, ble consumerism in order to remain relevant.
predictions for the future with respect to which will have to be fully customizable. At the same time, the continuous search for
each theme. authenticity and differentiation will lead con-
This does not mean that companies will nec- sumers to shop glocally, meaning shopping
essarily have a hard time collecting data, but local products from all corners of the world.
rather that they will have to be able to pro-
vide value in exchange for data. In fact, the
average consumer’s willingness to share
personal data is increasing. This phenome-
non is demonstrated by the growing trend
of measuring every aspect of one’s life, what
7Payments Outlook 2020 Buckle-up and enjoy the ride!
Payments Outlook 2020
1 Seamless Access to Funds
It’s
simply
going to be
complex
9Payment Outlook 2020 1 Seamless Access to Funds
Seamless Access to Funds Predictions
A
With regulatory changes and technological developments, New digital payment
we have seen an enormous transformation in how consumers methods will continue
access and transfer their funds, as well as the very nature to emerge enabled by
of these funds. This development is crafts new innovation mobile acceptance,
platforms, that are opening up for new opportunities but also cryptocurrencies,
bringing new levels of complexity for merchants. “loyalty currencies”
as well as PSD2/Open
B Banking
Emerging payment
methods will create new
forms of personalization
and value-adding
opportunities at POS for
Radar: Relevant Trends merchants – but also
increase the complexity
Consumer: Customization, Digital Detox,
C
Sharing Economy
Technology: Biometrics, Crypto Wallets,
In-store biometric
Wearables payments – specifically
Market: Mobile Wallets, TechFin Market facial recognition –
Entry, Alternative Payment Methods,
Personalization for the Masses, are well positioned to
European Cashless Conversion
become the next payment
Regulation: PDS2 in Effect,
SCA Introduction, Pan-EU P2P Payments,
form factor, enhancing
eIDAS convenience, security and
personalization
Read more about the
‘Identified Trends’
10Payments Outlook 2020 1 Seamless Access to Funds
Insights
How we pay for goods has changed over 1
time. A payment transaction involves three
basic elements: the nature of funds, how you The very nature of funds Info
access them (i.e. the payment form factor) Digital wallet usage
and the system connecting the two. Tradi- has evolved as well,
tionally these elements were all controlled from fiat currencies only,
centrally by governments, and linked to fiat
currency. With the transition from analogue to also include “loyalty
to digital, new parties were allowed into the currencies” and crypto
payment value chain: private organizations
55%
got involved in introducing new form fac- currencies
tors as well as in creating new frameworks
for connecting schemes. The very nature of
funds has evolved as well, from fiat curren-
cies only, to also include “loyalty currencies”
and crypto currencies.
51%
Ove the past few decades, payment form blockchain and other crypto currencies. At
factors - the most evident element of change the same time, increased interaction oppor-
for consumers - have expanded from cash tunities between merchants and consumers
to payment cards, and now to mobile. This via digital channels allowed for a reinvention use digital wallets due
to it being the fastest option
change was led by digital technologies, of “loyalty currencies”. Finally, considering
smartphone penetration, as well as consum- the connecting protocols between funds and
ers’ demand for convenience and security payment form factors, recent changes in the
. With NFC readily available at point-of- regulatory framework (i.e. PSD2), are leading
sales (POS) and in smartphones, digital wal- to a progressive erosion of card transactions
lets like Google and Apple Pay have quick- in favour of account-to-account payments.
ly become the obvious evolutionary step.
Looking at changes in the nature of funds, The ever-changing landscape within the pay- use wallets due to
PaymentsSource, n.d. higher convenience
a major breakthrough was brought about ment ecosystem has brought about a great
by Bitcoin, which enabled the emergence of deal of complexity for merchants: different
11Payments Outlook 2020 1 Seamless Access to Funds
Insights (continued) Perspectives
3 With the increased digitization and wide- 2 4
spread consumer adoption of mobile wallets,
Info solutions like consumer rewards programs, Info Graph
Payment methods cash-back and loyalty-points will be much Mobile payment Mobile wallet usage
are changing easier for merchants to implement into their
is important Number of mobile wallet users
80%
customer journey and purchase flow. This
expected to increase from 670Mn
Share of card-in-hand transactions will enable merchants to identify and per-
in 2017 to 1,500 Mn in 2022F
is expected to decrease from 46% sonalize a consumer’s shopping experience
to 34% in Western Europe by 2022. before, during, and after payment, as well as
blurring the line between online and in-store Global increase of mobile
buying. On top of this, new frontiers of pay- of merchants see mobile payments wallet users over time
McKinsey, 2019
as a fundamental part of their (Millions)
ment form factors, such as biometric identi- 1,500
business strategy 1,381
fication, are currently being tested, and are
92%
1,246
likely to reach the market in the near future, 1,098
946
further enabling for easier, more personal 799
payment methods have different character- and safer interactions . The speed at which 671
istics and often different costs. Consumers fintech innovation is entering the market is
are increasingly reluctant to shop where unprecedented. To the average consumer it of merchants expect to maintain
merchants impose certain payment meth- means they are faced with multiple choices or increase investments in mobile
ods in favour of others. At the same time, this across many payment methods. This implies infrastructure over the next 12 to 18
evolution has unlocked new opportunities an inevitable period of transition in which no months
80%
for merchants to turn payments from a sim- technological paradigm will dominate the
2016 2017 2018 2019 2020 2021 2022
ple collection task into a new channel around market, but rather a lot of options will coex-
which to build p ersonalization and loyalty ist. Therefore, complexity for merchants will
. A prominent example of these new op- dramatically increase. Like the consumers,
portunities is o
ffered by mobile payments at they will face an increasing amount of choic-
of respondents cited consumer
POS. With the adoption of wallets expected es they need to make.
demand as one of the main reasons
to continue growing in the coming years
for adopting mobile payments
, merchants now have the opportunity to
leverage this trend and interact with the end
user via e.g. a merchant app used at POS.
FinExtra, 2019 Payments Cards & Mobile, 2019
12Payments Outlook 2020 1 Seamless Access to Funds
Perspectives (continued)
5
Illustration
Historic payment form factor & the 5th element 5 The 5th element
Mobile is the new in-store payment form factor – we believe that biometric identity
is the next form factor when paying. The payment form factor has evolved
over time. Right now, mobile devices
4 are rapidly taking off
No Form Factor
Linking human biometrics to identifica-
Industry experts and tion, profile and payment instrument
3 Nets Innovation Hub has the potential to become the next
Mobile Device predict that biometric
payment form factor
identities in payments
will have a substantial
- Increased security impact on future in-store It’s a ‘NO FORM FACTOR’ or “THE 5th
2
- Personalization & shopping experiences ELEMENT” form factor evolution
Paymeny Card loyalty & cashback
- One item less to
- Increased security carry
1 - 24/7 money access Invisible payment
Cheque - Convenient Usage of mobile wallets
is predicted to grow with Paying with “no form factor” ultimately
- Increased security Paymeny card usage is double digit percentages enables the payment industry’s vision
- Convenient still predicted to grow in the coming years
of “invisible payment” to become a
and to stay dominant in
Cash the proximate future reality
No usage in Sweden,
Norway and Finland –
- Pay everywhere Very low volumes in DK
- Control of spending
Deloitte predicts that in
2025 at least one of the
Nordic countries will be
cashless
Payment Form Factor Evolition
/time
Source: Nets analysis
13Payments Outlook 2020 1 Seamless Access to Funds
Examples IV
II
III Square Wallet
Location-based
I Rekom mobile wallet
NightPay
Because it is location-based, the
Scandinavia’s largest nightlife group store knows when you are in-store
with 150+ bars in DK, NO, FIN, ser- trying to purchase a product, and
vicing over 10Mn consumers annu- will charge it to the card linked to
ally. Introduced NightPay, a mobile WeChat your Square account. At check-out,
consumers simply say their name
wallet app where consumers earn Messaging app to the cashier, who then connects
Caliburger loyalty points and receive great
discounts when paying for service in your purchase to your profile and a
Facial recognition any of their bars
WeChat is China’s most popular hands-free payment is made
messaging app with a monthly user
Californian restaurant chain spe- base of more than 1 Bn people, and hongkiat.com
rekomgroup.com
cializing in burgers. Using facial offers users an in-app method of
recognition to identify consenting paying in-store, peer-to-peer, and
consumers ordering at self-service online. WeChatPay is the most
kiosk in order to offer personal- dominant mobile wallet in China,
ized loyalty offers, repeat previous and is used for everything, including
orders, and eventually facilitate topping up the electricity supply for
payment your apartment
caliburger.com wechat.com
14Payments Outlook 2020
2 Fluid Commerce
I want my
channels
shaken,
not stirred
15Payment Outlook 2020 2 Fluid Commerce
Fluid Commerce Predictions
A
The online and in-store shopping experiences is increasingly
merging and integrated experiences are key if merchants want
to win the hearts and minds of consumers. Consumers expect Consumers are taking
personalized user journeys across all channels in exchange control of the path to
for their data. The exchange of data for recommendations purchase
and customizations facilitates a mutual value exchange.
Brick and mortar stores and webshops will go hand-in-hand,
contributing to a unified path to purchase in which the B
consumer has full control.
In order to create
interlinked shopping
experiences, companies
will have to break down
Radar: Relevant Trends internal organizational
and technological
Consumer: Customization, Digital Detox,
silos C
Data Minimalism
Technology: Digital Personal Assistants,
Biometrics, Edge Computing Enabling, encouraging
Market: Online Marketplaces, and maintaining a
Omnichannel Integrated Experience,
Mobile Wallets, Personalization for the relevant dialogue
Masses, PaaS, Alternative Payment
Methods
between merchants and
Regulation: PSD2 in Effect, Accessibility
consumers will be key to
Standards, GDPR, SCA Introduction building loyalty
Read more about the
‘Identified Trends’
16Payments Outlook 2020 2 Fluid Commerce
Insights
1 5
for size. This is a fundamental part of human
nature and will not go away. Hence, both Illustration
Info
the online and offline shopping experience
Consumer will inevitably continue to overlap and final- Omni vs Fluid commerce
experience is key ly blend together in natural coexistence. If
consumers are to engage and finalize a pur-
chase, this harmony is essential.
Omni Fluid
The constant emergence of new technolo- Consistent experience across all Personalized and contextual experi-
69%
gies allow continuous reinvention of the re- channels and devices ence across all channels and devices
tail landscape, in which consumer-centricity
is increasingly present: consumers feel more
In-store experience enhanced In-store experience transformed with
empowered and expect to be able to lead the
with wayfinding and contextual predictive merchandising, digital
path to purchase .
messaging displays, and contextual promotions
Ordering via store or Ordering whereever or however
digital property the consumer wants
of consumers expect a connected
experience regardless of the
Consumers feel more
Fulfillment via pick-up or delivery User-defined fulfillment
channel/device they are using empowered and expect
Salesforce, 2019
to be able to lead the Customer loyalty rewarded Customer loyalty rewarded
for referrals and engagement
for purchases
path to purchase
The internet has dramatically disrupted in- Most businesses are familiar with the con-
store shopping. As a result, a new balance cept of multichannel , as they necessar-
between the digital and the physical world ily have to be able to reach their consumers
is emerging. While commerce is heading in across a variety of channels. Merchants are
a digital direction, consumers still have the increasingly evolving their multichannel Rightpoint, 2019
basic urge to smell, touch, taste, and try on propositions into omnichannel, ensuring a
17Payments Outlook 2020 2 Fluid Commerce
Insights (continued) Perspectives
consistent experience across mobile, online voke consumer engagement and the entire 2
and physical channels . The next hurdle shopping journey will have to be reinvented.
Info
to overcome is how to create a consumer ex- Any given consumer will decide when, where
perience that allow simultaneous consum- and how they want to interact with a brand - Consumers expect to interact
er-merchant interactions. An experience that not the other way around . cross-channel and -device
transcends all channels by blending them
together seamlessly. To succeed, merchants will have to invest
in a comprehensive fluid commerce strate-
78% 64%
With a demand for a different shopping expe- gy. This includes ensuring presence in both
rience, merchants need to consider new ap- the physical and digital world with a
proaches, leading to what can be defined as guaranteed consistent experience regard-
a fluid commerce proposition . Consumers less of the interaction channels. Companies
expect to move through the purchase flow will have to cater for the right interaction
on their own terms. In a rapidly accelerating at the right time on the right channel,
digital world, keeping the consumer engaged according to the consumer’s preference.
across channels has become a top priority This is how merchants will maximize con- prefer different channels depending have used multiple devices to start
for many merchants. As more channels are version and customer return. Furthermore, on the context and complete a single transaction
emerging, including voice and AR/VR, it merchants should combine and analyze Salesforce, 2019
is important for merchants to understand consumer data across all touchpoints, by
how to create the right “channel portfo- bringing down technological and internal
4 7
lio”. By doing so, they are able to serve the organisational silos. This highlights the es-
optimal fluid commerce proposition, de- sential need for an ongoing conversation Source Source
pending on industry, consumer segment and between merchant and consumer, providing
desired positioning. a holistic view of a consumer’s behavior and
Merchants and Omnichannel 2.0
needs. Only then can a company be allowed omnichannel
Meeting consumer expectations
To win the hearts and minds of consum- to be part of a potential customer’s life.
Importance of omnichannel spans is all about creating a contextual
ers, merchants will have to turn their om- and relevant experience across all
wide, as merchants within transpor-
nichannel proposition into fluid commerce. touchpoints, as well as maintaining
tation, entertainment, banking, and
Merchants and consumers will increasingly an ongoing conversation between
retail are implementing omnichannel
interact, but in the near future it will be in- consumer and merchant
strategies
creasingly on the consumers’ terms. Retail-
ers will no longer be able to dictate or pro- HubSpot, 2020 Rightpoint, 2019
18Payments Outlook 2020 2 Fluid Commerce
Perspectives (continued)
3 6
Illustration Graph
Multi vs omnichannel The voice revolution is already happening
Multichannel Number of smart speakers globally (excluding China) in private homes expected
All channels are available to the to quadruple by 2025
consumer but are not integrated
291
Global smart speaker sales forecast (excluding China)
(Million of units)
233
205
Store Web Mobile Social Phone
172
Omnichannel
All channels are available to the 129
consumer and they are connected
101
Web Mobile
73
52
37
Store Social
9
2016 2017 2018 2019E 2020E 2021E 2022E 2023E 2024E 2025E
Phone
Fit Small Businesses, 2019 Voicebitai, 2019
19Payments Outlook 2020 2 Fluid Commerce
Examples
III
I
IV
II TopShop
Virtual reality
fitting rooms
Global fashion retailer of clothing,
Nike House of Innovation 000 shoes, make-up and accessories.
Currently testing virtual reality
Geo-fencing fitting rooms in their flagship stores
technology that allow consumers to 3D scan IKEA
themselves and virtually try on
Global retailer of athletics- and Zara products
Engaging e-commerce
sportswear. Nike’s Manhattan store Buy and reserve mobile platform
provides exclusive offers, experi- topshop.com
ences, product recommendations products online Global furniture retailer. The official
and self-checkout directly on their Ikea app works as an engag-
mobile device for Nike+ member- Global fashion brand, both present
ing e-commerce mobile platform,
ship owners. By using geo-fencing in the online and in the physical
letting users know exactly where
technology, the app detects when world, interlinking the experience,
specific items are located in physical
the consumer enters the store and by offering the possibility to buy/re-
IKEA stores. Furthermore, they
is automatically updated to provide serve products online and then try it
utilize virtual reality to allow con-
customized features on/pick it up in the closest physical
sumers to see products in their own
store. They provide offers based on
homes, while also opening show-
nike.com previous buys in their app, and have
rooms with day-to-day delivery
created a scanning feature where
you can see whether and where it ikea.com
is in stock
zara.com
20Payments Outlook 2020
3 Customized Privacy
I’ll take
a cookie
to-go,
please
21Payment Outlook 2020 3 Customized Privacy
Customized Privacy Predictions
A
Customization is no longer an option, it is expected and
required. Data is a gold mine for companies, but also Consumers will expect
a potential minefield. In a society dominated by digital a mutually beneficial
marketing initiatives, the rate at which consumers disconnect, value exchange from
unsubscribe and opt-out to flee the bombardment of merchants for giving
undesired content is increasing dramatically. up data
B
Companies will grant
access to products and
services on the basis of
what data consumers are
Radar: Relevant Trends willing to give
Consumer: Digital Detox, Data Minimalism,
C
Customization
Technology: Real-Time Personal Analytics,
Connected Homes, Wearables,
Digital Personal Assistants
All businesses will
Market: Online Marketplace, Account-to- have to evolve their
Account, Personalization for the Masses, proposition from broad
Omnichannel Integrated Experience
Regulation: GDPR, GDPR Article 6(1)
segmentation
Clarification to individualization
Read more about the
‘Identified Trends’
22Payments Outlook 2020 3 Customized Privacy
Insights
Three years ago, The Economist declared that 12
the world’s most valuable resource was no
Info
longer oil, but data . Data has since been Consumers expect
widely debated and the recent General Data Sharing data for monetary rewards (2019)
Protection Regulation (GDPR) has hardly merchants not only to
gone unnoticed by any company or consum- understand their needs
er in Europe. In an increasingly digital world
consumers continuously leave behind digital but also to customize
footprints and businesses are not allowed to experiences according
33% 86%
misuse this data by law. Consumers’ privacy
preferences are heterogeneous, hence the to their individual
need for customized privacy.
preferences
Today the average consumer has a relatively The consumers should start to see the value
high understanding and awareness regard- in a data-driven economy and the merchants
ing personal data , and the power it holds should contribute to this development.
. This is partly due to new legislations (i.e.
GDPR), large fines for misconduct to ma- would be interested in services that wish they had more control over The benefits of a customized experience
jor search engines, and the scandal-ridden collect data in exchange for mone- personal data provided to companies needs to be crystal clear to the consumer
political case involving the biggest social me- tary reward and how it is stored before they are asked to provide any person-
dia company in the world . Many compa- al data. This ought to be the very foundation
DMA, 2018
nies are requesting consumer data, without for a mutually beneficial relationship with
informing consumers what they get in return. any company . Data collectors are ex-
This is often done via lengthy and compli- pected to be transparent about the purpose
cated Terms and Conditions and Privacy Pol- panies are handling their information . They ency in a very complex area with lots of in- of collected data and what value is received
icies, resulting in fewer read-throughs, which want to be recognized, remembered and of- formation. As consumers demand increased in return. Consumers expect merchants not
are consequently often accepted without fered relevant recommendations , and are transparency, companies must become only to understand their needs but also to
real conscious understanding . How- willing to share their information to receive stricter in providing an account of the data customize experiences according to their in-
ever, consumers are actually willing to give customized services and discounts . they use. This is required not only by law, but dividual preferences. A holistic approach to-
away personal data if they trust the compa- especially to satisfy the consumers, and pre- wards data harvested from all channels and
ny and can see the personal advantages of Most businesses need personal consumer vent them from becoming diffident towards touchpoints is needed, while complete trans-
providing data . Younger generations are data to provide a customized, hassle-free the product/service provider . parency is an indispensable requirement.
especially more comfortable with how com- experience. This calls for trust and transpar-
23Payments Outlook 2020 3 Customized Privacy
Perspectives
2 9
Graph Graph
Privacy first internet search enginge How should a merchant personalize?
15.08Mn
The privacy-first internet search engine Duck Duck Go is Recognize, remember and offer relevant recommendations:
exploring Google’s data-hungry business model. Duck
Consumers are more likely to buy from a retailer (online, offline)
Duck Go is experiencing exponential growth 9.23Mn
...recognizes them
by name 56% (say yes)
5.91Mn
...recommends options
based on past purhases 58% (say yes)
4.08Mn
3.13Mn
1.96Mn ...knows their
purchase history 65% (say yes)
1.02Mn
0M 0M 0M
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 ...offers any of
these three options 75% (say yes)
DuckDuckGo, 2019 Accenture, 2016
3 6
Info Info
GDPR’s influence on sharing data No one reads terms of service agreements
online
Since GDPR has been implemented, 40% of respondents
agree they feel more knowledgeable about the way
40% A survey of 2000 consumers in the US, from Deloitte, found that 91% of the respon-
dents consent to legal terms and conditions without reading them; for younger people
the number is 97%
information about them is collected and used online
Digital Marketing World Forum, 2019 Business Insider, 2017
24Payments Outlook 2020 3 Customized Privacy
Perspectives (continued)
1 4 5
Quote Source Source
Data is the new oil Cambridge Analytica Terms and conditions
“The world’s most British political consulting firm had a major scandal when it was revealed that they Companies are harvesting data from
valuable resource is had harvested personal data from millions of people’s Facebook profiles consumers today, without telling
them why
no longer oil, but data”
The Economist, 2017 The New York Times, 2018 TermsFeed, 2019
10
Graph
Consumers’ willingness to share data
Percentage of the 6.387 respondents agrees with the following statement: “Digital-born consumers are the most comfortable with data sharing”:
54% 54% 49% 47% 44%
of Gen Z (born 1995-2001) of younger Millennials of older Millennials (born of Gen X (born 1965-1974) of Boomers (born before
agreed (born 1985-1994) agreed 1975-1984) agreed agreed 1965) agreed
RSA Data Privacy & Security, 2019
25Payments Outlook 2020 3 Customized Privacy
Perspectives (continued)
7 8
Info Graph
The benefit of sharing data Data usage
Younger consumers are more comfortable with companies handle their data
51% 74%
Q: For each of the following categories, how comfortable do you feel
about a company in that category handling your personal data?
51%
Share of
respondents who 44%
of global consumers are still happy of the respondents have answered
to exchange their data with some degree of concern about somewhat or very
comfortable 35% 35%
businesses, if it is beneficial their online privacy
Fedma, 2018
11
Millennials Generation X Boomers Silent Generation
Source 1995-2001 1985-1994 1975-1984 1965-1974
Value-based customized approach
“In 2019, the unintended consequence of organizations’ activities will be customers
feeling inundated and overwhelmed; organizations must embrace a new design ethos
that puts human value back at the center of their innovations”
Fjord, 2019 Columbia Business School, 2015
26Payments Outlook 2020 3 Customized Privacy
Examples IV
II
III DNA Fit
Care/of us
Location-based
I Individual monthly
mobile wallet
subscriptions Offers diet optimization based on
DNA provided by consumers. DNA
A company based in New York, is provided in an easy, four-step
which offers subscriptions for process, and shortly hereafter
vitamins, proteins and other food consumers will receive personalized
supplements. The individual month- Atolla skincare meal plans, personal diet coaching,
ly subscription of supplements is
Atolla Skin Health and diet insights
personalized, as the consumer must
answer a quiz to get a specialized online interface dnafit.com
package
DuckDuckGo.com Provides a personalized serum
Web search engine takecareof.com based on an analysis of individual
consumers’ skin. Furthermore, they
DuckDuckGo is a web search engine offer a tracking of the consumers’
in direct competition with google, skin health via their Atolla Skin
but refrains from tracking personal Health online interface
usage of the service. They claim to
atolla.co
be able to deliver search results that
are equally good as those Google,
and put emphasis on privacy and
providing identical search results to
all users
duckduckgo.com
27Payments Outlook 2020
4 Quantified Self
Can I
get your
numbers?
28Payment Outlook 2020 4 Quantified Self
Quantified Self Predictions
A
Individuals can achieve performance improvements by
tracking and benchmarking personal data points in their Quantification will
daily life. This data is related to several aspects of life, expand from being
including physical, mental, emotional, environmental, and centered around health
financial health. Tracking everything that matters to the into anything that has a
individual has become the new normal. logical or emotional value
for consumers
B
Tracking will enable
new and unpredictable
business models, as well
as allow merchants to
Radar: Relevant Trends build loyalty
with their customers
Consumer: Customization, Health Tracking,
C
Sub-sub Culture
Technology: AI in BI, Real Time Personal
Analytics, Mobile Wallets, Digital Personal
Assistant, Wearables, Biometrics, Sensors
The scope of
and Intelligent Devices quantification will expand
Market: Subscription Economy, from self to business and
Sustainable Development Goals (UN),
Personalization for the Masses, TechFin will eventually quantify
Market Entry, Open Banking
everything
Regulation: GDPR, PSD2 in Effect
Read more about the
‘Identified Trends’
29Payments Outlook 2020 4 Quantified Self
Insights Perspectives
Quantified Self refers to the cultural phe- The success of fitness and health tracking 2
nomenon involving more and more people has led to heavy investments in various in-
Graph
monitoring habits in an attempt to become dustries. Personal finance management and The digital trans
the best version of themselves. Among the environmental consciousness are just two The fitness tracker
most popular areas of self-tracking are of the areas experiencing heavy growth, as formation will drive the market is booming
health and fitness measures , which are consumers are given new ways to explore way towards quantified
expected to experience double-digit growth spending and carbon footprints. Financial The global fitness trackers market
in revenue in the coming years . startups are offering management tools everything was valued at $17.9 Bn in 2016, and
to provide enhanced control of individual is expected to reach $62.1 Bn by
2023, a CAGR of 19.6%
1 spending patterns. Startups within green The Quantified Self movement will inevitably
tech help you understand and reduce your grow as technology advances, data becomes
Info carbon footprint by automatically tracking more accessible, and new tech evolves. If
Allied Market Research, 2018
Fitness-tracking has your travel, banking, shopping and energy complete transparency is accomplished,
consumption. Efforts made by these startups the amount of data provided from the con-
become a global trend have proven highly attractive to consumers, sumer is practically limitless, and this value
particularly personal financial management exchange between consumers and busi-
3
apps . The end-goal is to create incentives nesses is highly beneficial for both parties
for consumers to change behavior or repeat and creates strong bonds boosting loyalty. Info
positive patterns in order to make a desired However, the quantification will not only be
33%
impact in their lives. of value through the tracking of consumers Consumers
but also by businesses tracking their own increasingly adopt
The transformation towards quantifying behavior. Eventually, the digital transforma- PFM services
everything is a conscious choice for the tion will drive the way towards Quantified
consumer, who wants to break a habit, high- Everything, increasing the possibility of ana- Global consumer adoption of per-
light own behavior, or boost a desired ac- lyzing and predicting consumers’ and busi- sonal finance management services
tion, whether it is physical, mental, financial, nesses’ every move. is increasing: from 2015 to 2019, the
etc. Consumers are becoming addicted to adoption of budgeting and financial
monitor their health or fitness via an measuring. Tracking one’s own behavior is planning increased from 8% to
online or mobile application, fitness becoming a ‘truth’ that ties directly into new
29%
band, clip, or smartwatch marketing initiatives. Businesses have plenty
of opportunities to build loyalty by serving as
Growth from Knowledge, 2016 FinExtra, 2019
a guiding star or motivational factor for those
consumers trying to change their behavior.
30Payments Outlook 2020 4 Quantified Self
Examples
III
I
IV
NORTH II
Doconomy
North Mobile bank
Automatically tracking
Doconomy is a mobile bank that
The North app helps consumers combines technology, finance and
understand and reduce their carbon sustainability to combat climate
footprint by automatically tracking Fitbit change. Spending is measured by
spending within travel, banking, its carbon footprint, both negative N26
shopping and energy apps.
Wearable activity and positive. Furthermore, Docon-
trackers omy enables users to compensate FinTech
north-app.com for carbon emissions by financ- challenger bank
Fitbit is a consumer electronics ing UN-certified carbon offset proj-
company specializing in wear- ects or investing in fossil-free sus- N26 is a FinTech challenger bank
able activity trackers. By tracking tainable funds that allows users to manage their
daily activities, consumers get an personal finances. The mobile
doconomy.com
overview of their performances. In bank automatically sorts transac-
November 2019, Google announced tions according to categories and
to buy Fitbit for $2.1 Bn, thereby get- displays them in the N26 mobile
ting access to millions of health-re- app, for an optimal overview of
lated data points spending
fitbit.com n26.com
31Payments Outlook 2020
5 Simultaneous Bundling and Unbundling
To bundle
or unbundle,
that is the
question
32Payment Outlook 2020 5 Simultaneous Bundling and Unbundling
Simultaneous Bundling and Unbundling Predictions
A
Bundling and unbundling have long been the underlying
forces drive cyclical business model innovation and Companies will create a
reshaping industries. The ongoing digital transformation platform for bundling and
will further accelerate this trend, making room for near unbundling opportunities
limitless bundling and unbundling opportunities, at a when moving into the
much more unpredictable pace. cloud and enabling
API access
B
The unbundling and
bundling cycle – and visa
versa – will become even
faster, ever-dynamic, and
Radar: Relevant Trends more unpredictable
Consumer: Customization, Sharing
C
Economy, Circular Economy
Technology: Edge Computing,
Serverless Computing
Opening up business
Market: Online Marketplaces,
Product Bundling, Personalization for models for API access will
the Masses, PaaS, Strategic Alliances,
Platform Economy
imply risks, but staying
Regulation: PSD2 in Effect
out of the game will lead
to irrelevance
Read more about the
‘Identified Trends’
33Payments Outlook 2020 5 Simultaneous Bundling and Unbundling
Insights
The bundling and unbundling of busi- 2
nesses have gone hand in hand seemingly
forever and have long been a successful
Quote Bundling enables
marketing and business strategy . How- Bundling and unbundling unbundling, and the two
ever, bundling new offerings into the current
value proposition often comes with the risk “My old boss, Jim Barksdale, used to say there’s only have a cyclic relation-
of overinterpreting consumer needs, and
losing control of the core product . Bun-
two ways to make money in business: One is to ship, as consumers
dling enables unbundling, and the two have bundle; the other is unbundle” needs and demand
a cyclic relationship, as consumers needs
and demand change over time.
- Marc Andreessen, Investor of Netscape and VC at a16z
change over time
Harvard Business Review, 2014
This cyclic trend has been the case within predictable. Consolidated companies will
many industries, in which startups have been see disruption coming simultaneously by
able to capitalize at the expense of consol- bundling and unbundling competing prop-
idated firms by unbundling specific parts of into the cloud . Spurred by the diffu- Bundling and unbundling will happen ositions, making it increasingly harder to
their value propositions and bundling them sion of API-based services, this is predicted faster and become increasingly more un- navigate in a dynamic market. At the same
back into new forms . Facilitated by the to continue in coming years . This trans- time, the modular configuration unlocked
new wave of possibilities brought about by formation is already opening new ways to by the “API economy” will allow compa-
the internet economy and the consequent bundle and unbundle, allowing for a modular 8 nies to respond faster to changes in market
shift towards digital products and services, approach to business model innovation and conditions by adapting faster to changes in
unbundling has been even easier in the past differentiation. Simultaneously, the trans- Quote consumer demands and offer products and
few decades . This approach has led to the parency of the internet allows new entrants Cloud adoption services tailored to specific mutating needs.
establishment of new tech giants disrupting to target certain niche consumers more ef- Over time, some offers may phase out, while
entire industries and well-established play- fectively than ever before, and in general it “At this point, others will disrupt industries by appealing to
ers . Now those same companies lie in is significantly lowering the entry barriers a larger audience. This can happen in par-
the incumbent position themselves and are in many industries. Consequently, it is safe
cloud adoption is allel, and it seems there will be an ever-dy-
exposed to new waves of disruption driven to assume that we are at the verge of a new mainstream” namic variety of bundling and unbundling
by the bundling and unbundling of their core wave of disruption and reshaping, driven -S
id Nag, research vice possibilities driven by development in tech-
offering. by the nearly infinite new bundling/unbun- president at Gartner nology.
dling-enabled business model recombina-
Gartner, 2019
Along with the digital transformation, a lot tions, fueled by API access.
of businesses have increasingly moved data
34Payments Outlook 2020 5 Simultaneous Bundling and Unbundling
Perspectives
4
Illustration
Unbundling Craigslist Unbundling Craigslist generated new platforms with
a combined value that is nearly 10 times bigger
“[...] newcos who aspire to take chunks out of that $9.25Bn+
emergent platform [...] – by creating a user experience or business model
that’s much more tailored to the unique attributes of that vertical.”
Here is an overview of the different verticals that have been unbundled out of Craigslist
$0.1Bn $0.8Bn
Revenue Revenue
CNBC
The
Verge
≈10x
$1.5Bn $2Bn+
Revenue
Revenue
Macro
Trends Recruit-Holdings
$4.3Bn $0.1Bn
Revenue Revenue
$1Bn Alltherooms Owler
$1Bn $0.2Bn $0.25Bn
Revenue Revenue Revenue
CNBC Forbes Upwork
Adapted from Jordan and Coolican, 2019
35Payments Outlook 2020 5 Simultaneous Bundling and Unbundling
Perspectives (continued)
1 6
Perspectives (continued)
Definition Graph
Bundling and unbundling Unbundling and bundling the music industry
Bundling can refer to both the marketing strategy involving pooling products into The CD music industry was unbundled by iTunes (single song purchase), then
a combined offering, as well as to business model bundling, combining different rebundled by Spotify’s “all you can eat” business model. It is a cycle with different
value propositions into a end-to-end one. Unbundling refers to the opposite, splitting drivers having huge business impact.
previous bundles to offer the core service, or splitting business models vertically or
horizontally
Source Internal
Global Recorded Music Industry Revenues 2001-2018
(USD Bn)
0.6
0.7
9
23.3
5 21.7 0.8
1.0
1.0 0.4
20.0 19.4 1.0
18.1
16.4 0.4 2.7
Quote
1.2
Quote 14.2 1.3 0.4
2.4
0.3 0.3 0.3 0.4 4.7
API economy
1.3 2.3
Unbundling and
12.0 0.3
0.3
10.5 1.4 1.5 1.6 2.0 5.2
1.8
1.9
9.0 8.3 7.7 5.6
disruption
6.8 5.8
6.0
2.3
“The API economy 3.2
2.6
8.9
“The Decoupling Effect is an enabler for
3.8 6.7
4.3 4.0
4.4
4.3 4.7
3.7 3.9
of Digital Disruptors” turning a business 2.0 3.4
2.7 2.9
1.0
0.4 0.4 0.4 0.7 1.9
0.1 0.2 0.2 0.3 1.0 1.4
or organization into 2001 2002 2003
Total revenue USD Bn
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
a platform” 23.9 22.4 20.8 20.8 20.2 19.6 18.4 17.1 16.0 15.1 15.0 15.1 14.8 14.3 14.8 16.2 17.4 19.1
Streaming Digital (excluding streaming) Physical Performance rights Synchronisation revenues
-K
ristin R. Moyer, vice president and
distinguished analyst at Gartner
Thales S. Teixeira Peter Jamieson, 2014 Gartner, 2016 Ifpi, 2019
36Payments Outlook 2020 5 Simultaneous Bundling and Unbundling
Perspectives (continued)
7 3
Graph Quote
Cloud revenue growth Disruption and unbundling
Gartner predicts that cloud revenue will grow from 197 USD Bn to 355 USD Bn.
Worldwide public cloud service revenue fecast
(USD Bn)
“As technology matures, however, it
355
eventually overshoots the raw performance
309 that many consumers need. As a result, new
266
disruptive innovations emerge that are more
228
197 modular – or unbundled – as consumers
become less willing to pay for things like
power and increased reliability but instead
prioritize the ability to customize affordably
by mixing and matching different pieces that
fit together according to precise standards”
2018 2019 2020F 2021F 2022F
Gartner, 2019 Christensen Institute, 2014
37Payments Outlook 2020 5 Simultaneous Bundling and Unbundling
Examples IV
II
Netflix (Bundle)
I III Monthly subscription-
Spotify (Bundle)
based streaming
“All you can eat”
digital streaming Netflix’s primary business is its
monthly subscription-based
Is a digital music service, re-bun- streaming service which offers
dling music into an “All you can eat” online streaming of a library of films
digital streaming offering. Streaming and television programs, including
Momondo (Bundle)
accounts for nearly 50% of the those produced in-house. It’s an all-
Coursera (Unbundle)
global recorded music industry Travel you-can-eat bundle
Unbundling university revenue in 2018, disrupting pay-per- metasearch site netflix.com
degree into individual song business models, pioneered by
Apple’s iTunes unbundle Momondo is a travel metasearch
courses site that finds and compares the
spotify.com
best offers on flights, hotels, car hire
Offers online courses, certificates,
and package holidays. Started with
and degrees from world-class
flight price comparison, but have
universities and companies, thus
over time bundled other services
distributing world class education
to anyone with internet access at a momondo.dk
fraction of the cost, by unbundling a
full university degree into individual
courses
coursera.org
38Payments Outlook 2020
6 Decentralized Trust
In
technology
we trust
39Payments Outlook 2020 6 Decentralized Trust
Decentralized Trust Predictions
A
Consumers are becoming more critical towards corporations
and central power. Society is looking at tools promoting Consumer trust and
transparency, decentralized and distributed power, where transparency will have
trust is established through technology rather than to be regenerated
centralized third-parties. Disruptive technologies are and boosted through
introducing an array of new challenges, but also business decentralizing
opportunities. technologies
B
Personal data ownership
will be decentralized
through DLT, enabling
consumers to grant and
Radar: Relevant Trends remove merchant access
to their data as
Consumer: Digital Privacy,
they please C
Data Minimalism
Technology: Distributed Ledger
Technology (DLT), Smart Contracts,
Crypto Wallets
It will only take
Market: Alternative Payment Methods,
European Cashless Conversion, one successful
TechFin Market Entry use-case to drive
Regulation: SCA Introduction, GDPR
massive adoption
Read more about the
‘Identified Trends’
40Payments Outlook 2020 6 Decentralized Trust
Insights
Rumors and misinformation is not a new year, the Bitcoin white paper was published, optimization, data and asset management 5
concept, however, the multiplication of on- introducing a decentralized and distribut- and exchange infrastructures. In other words,
line social channels have paved the way ed currency as an alternative to centralized trust can be established in a decentralized Info
for fabricated news to gain momentum. As banking systems . The core purpose of manner at any point of the supply chain, and Reaction to
a result, the public increasingly distrusts decentralization is tied to freedom and safe- between any given actor. Even though the decentralized
centralization of power . Numerous cases guarding against entities with too much pow- hype around blockchain has calmed, there
of data breaches, election interference, and er . The fundamental technology enabling is still exploration happening in many indus-
market opportunity
blatant disinformation have further widened Bitcoin and other digital currencies is known tries, and executives still believe the technol-
+200% increase in the number of
the gap between the government and the as blockchain. It is a type of distributed ledger ogy will solve current challenges and lead to smart contract related patents filed
people . Hence, the need to facilitate trust technology providing the opportunity to cre- a competitive advantage . in 2019 compared to 2018
in a decentralized matter is becoming more ate peer-to-peer networks for asset transac-
imperative every day. tions without the need for a third-party facil- Nets analysis
itator, like a bank, or another private entity.
After the financial crisis in 2008, decen- Blockchain paved the way to other digital
tralized mechanisms started to form as an currencies, which emerged in the following The core purpose of
alternative to central banking. The same years. Established companies and new en- itself prove highly disruptive. Consumers will
trants jumped on the wagon as an attempt to decentralization is tied continue to request more transparency and
be first-movers into the evolving space. Ven-
to freedom and safe- safe transaction methods. Despite the chal-
1 ture capitalists and private investors spewed lenges distributed technologies have faced
money towards companies, promising cryp- guarding against entities in the current markets, the number of organ-
Info tocurrencies would be the future. However,
with too much power izations exploring blockchain and distributed
Global lack of the crypto currency market hasso far proven ledger technology continues to grow, as the
hard to monetize and scale. opportunities are too big to ignore. A single
governmental trust successful use-case can potentially drive
Despite numerous initiatives made by the The effects of establishing decentralized mass adoption and disrupt industries as we
80% of 33,000 respondents in
27 countries does not believe the world’s biggest corporations, push-back trust are twofold: it will generate trust be- know them.
current governmental systems work from governments and lack of regulations tween consumers and merchants, especially
for them are blocking successful implementations. in regards to transparency, data manage-
This might force companies to explore oth- ment and privacy. It can also build market
Edelman Trust Barometer, 2019 er applications for blockchain technology. trust that can lead to cross-company and
Many opportunities are linked to logistics -industry efficiency gains. Each effect will by
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