COVID-Driven Tech Trends
No one could have predicted the challenging year we had in 2020, but from a technology perspective, there was tremendous progress in payment technology fueled by COVID. I pointed to several tech trends that were expected in 2020 in my pre-pandemic blog from 12 months ago on innovation. Let’s see how I did:
• Electronic Cards – COVID has been a catalyst for several financial institutions that have developed dynamic CVV cards, where the CVV number changes frequently, and other electronic card technologies. Visa has launched a new push to incorporate this technology to help battle fraud due to the increased use of card-not-present fraud.
• Biometrics – Last year, biometric technology was launched to meet the demand of consumers ready and waiting for a technology that they’ve long had on their mobile phones. This growth is set to continue with large roll out programs like BNP’s new biometric card set to hit the market in six months.
• IoT – The diverse digital ecosystems have slowed the rollout of mass adoption of IoT, but that hasn’t stopped the continued progress of connected devices that get launched at CES every year. Our digital lifestyles have spurred mobile commerce usage – from food and digital grocery delivery to the COVID-inspired exponential growth in online shopping, prompting a broader usage of digital payments.
Here are a few of the trends to anticipate in 2021:
1. Cryptocurrency – Cryptocurrency is making huge strides, moving beyond its roots as an alternative investment to becoming a valid payment system in the future, although it won’t hit mainstream adoption for several years due to costs and competing standards. Similar to the “battle of the gauges” the U.S. railroad system faced in the 1800s, cryptocurrency needs standardization to make it easier to convert from one system to another for universal payments. We are already starting to see traditional financial institutions such as Visa adopting and supporting cryptocurrencies. Artists and musicians have also started using unique tokens that can give part ownership, similar to stock, or to provide a different experience for consumers. “Tokenization” will continue and grow in 2021. CompoSecure has ventured out to diversify its product portfolio and stay ahead of the curve by launching Arculus, a cold storage device that can help consumers buy, sell, transfer and store all their cryptocurrency wallets.
2. Platform Consolidation – Apple, Google, Amazon and others are in a long-term battle to own it all. Some of this fight is happening in the legal system, but we also see this through a continued expansion of features and services. Smaller one-off companies offering compelling services are slowly getting acquired once they hit a critical mass, such as Amazon’s recent acquisition of Zoox. The outcome of this battle will have broader implications for our everyday lives with regard to digital payments, rewards and one financial ecosystem.
3. Robot Automation– Robots are starting to automate every repetitive task done from manufacturing to fast food. Smart automation can be done faster, better and more economically than with human workers, and this trend will only continue due to COVID, where there are more restrictions and liabilities with worker safety and health. CES demonstrated several AI robots that can help with mundane household tasks as well as complicated analysis.
4. Smart Labeling – Gone are the days when you buy a product and there is the 20-page instruction manual in three languages in 6-point font and usually gets lost the first week of ownership. Instead, businesses are using QR codes and NFC interface to link to more details that are housed online, where it is always accessible. Some companies, like Nike, are taking this a step further by using AR and VR to create a more compelling experience within the sales channel. This is also fueled by the pandemic, where the in-store experience is limited.
5. Contactless Payments – Not directly related to CES, it would be remiss not to mention the heightened awareness of payment technologies in the current climate. There has been an over 200% increase in contactless transactions in US stores from the beginning of 2020 to the end. This drives a need to continue to innovate in this space; finding more ways to provide touchless interactions that allow consumers to safely and confidently transact.
The COVID pandemic stretched us in our quest “to do the impossible.” However, adversity drives innovation and necessity is the mother of invention. As innovators, our job is to meet the future need.