Mercator Blog

Consumer Electronics Show – The Payments Spin
Date: January 9, 2014
Patricia Hewitt
Director, Emeritus

This week, the phantasmagoric event called CES (Consumer Electronics Show) is in full swing and every day we’re teased with what the future may hold for consumer electronics. Since the payments industry has embraced the concept of an embedded payment, it got me wondering how the top ideas at CES might impact our industry. The list of technologies I’ve used is from a Bloomberg article, CES 2014: The Next Big Thing? Or a Bunch of Small Things?

Devices that Detect Gestures and Emotions
Declined at the POS? Need cashback? That scowl or smile might be detected by the next generation POS and be used by your issuer to help them personalize your account experience or add another layer of security. More practically, we know that gesture-based authentication is something already in the works and facial recognition software is being used in market. We’d say yes, look for leading edge companies to increasingly test the boundaries and usages of gesture and facial recognition capabilities.

Remote Control Drones
Bit of a stretch, but issuers could drop emergency replacement cards right into your purse or pocket? Don’t believe me? Well, we don’t either and say no, not seeing the connection (for now).

Very early stage, but important technology that speaks volumes about embedded applications. Payments, however, are more of a piggyback than a driver and even that’s way out there. We’d vote no for anything to happen that marries bifocals and payments anytime soon.

Hardened Hardware
The article discusses a tough tablet developed by Panasonic that can withstand serious drops. For consumers to get really comfortable with device-based payments, manufacturers are going to have to address no-fail devices including much longer life batteries. Yes, we view these efforts as part of the key activities that will encourage growth in the mobile payments market in the future.

Full Body Engagement
The opportunity for share gain is real for our industry as these developments will drive up sales of gaming devices, gaming programs, and gaming subscriptions. Acquiring services that effectively manage recurring and micro-payments will benefit from the proliferation of these devices. We’re bullish on bodies.

The Personal Cloud
Personal clouds could be an out-of-nowhere disruptor to account provisioning strategies. What if I could provision my own accounts from my own cloud? Would I perceive that as the ultimate control over my personal information? We’ll watch this development with great interest and especially keep an eye on who’s investing in this technology.

A Simpler Yahoo
The re-engineering of Yahoo will make it into the lexicon of business strategy in years to come and for now we don’t see the company moving into the payments industry in any kind of direct way. But with a core strategy that relies on advertising, digital media, and mobile products, it won’t take long. We look for Yahoo to make a move in this direction in the near term.

The Internet of Everything
Key phrase here is “more consumer purchases”. Need we say more?

Hope you’ve enjoyed this lighthearted, but grounded look at what’s ahead for our industry. Our analysts monitor the payments market every day, connect with us and learn more about our team members.

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