Mondays52 2018 BY KAREN WEBSTER A YEAR OF CONVERSATION ABOUT PAYMENTS IN 2018 TableofContents Payments 2018: Think This — Not That . 6. Has Unbundling Lost Its Cool? . 216. What Payments Innovators Can Learn From Monkeys . 20 How Uncertainty Kills Commerce . 228 Why Innovation Is Nothing Without Distribution . 28 Why Household Finances Under The Hood Don’t Look So Good . 238 2018: The Year Of The Mobile Wallet Reset . 38 Could Grubhub Become The Amazon Of Restaurants? . 250 eBay/PayPal: What Everyone Missed . 46 Payments’ Stranger Things . 260 In The Age Of Big Data, Why Are We Still Flying Blind? . .56 Online Platforms: Why Consumers Rule And Regulators Don’t . 270 Mobile Wallets: Where’s The S-Curve? . 64 Loyalty’s New One Percenters . 280 Who’ll Win When Facebook Advertisers Flee? . 76 What Innovators Can Learn From Uber Cash . 286 The Amazon Effect On Consumers And Grocery Shopping . 84 Why Certainty Rules Payments . 296 The Curious Case For Breaking Up Tech Giants . 92 Who’s Going In The Connected Car Driver’s Seat? . 304 Can Google’s Shopping Actions Take On Amazon? . 104 Bitcoin: 10 Years Of Smoke And Mirrors . .314 What Everyone Missed About Facebook . 112 The Roil Over B2B Payments Rails . 324 Consumer Convenience, Retail And Payments Disintermediation . .122 How Much Of The Consumer’s Paycheck Goes To Amazon? . 338 Can FinTech Walk The FinTalk? . .132 How Connected Devices Are Revolutionizing How And Who We Pay . 352 Facebook And Dating: It’s (Not) Complicated . 144 Seven Big Threats Facing Seven Big Tech And Payments Players This Halloween . 362 Bridge Millennials And The Threat To Physical Retail . .154 The Apple iPhone Sales Rope-A-Dope . 376 The Gig Economy’s $1 .2T Digital Payments Potential . 164 The Walmart/Amazon Whole Paycheck Matchup . 384 Is GDPR EU’s Frankenstein Monster? . 174. What Black Friday Tells Us About The Future Of Retail . 398 The Case For Contextual Commerce . 186 Why Consumers Will Shrug Off The Marriott Breach . 406 Amazon: QSRs’ Big Threat Or Essential Lifeline? . 194 Decoupled Debit — Again? . .412 Are Retailers Ready For Amazon’s Prime Time? . 204 Did Payments 2018 Predictions Come True? . 420 © 2018 PYMNTS.com All Rights Reserved Introduction Hi everyone! Astrologists say that people born on Mondays have the psychic ability to 52 Mondays 2018 is the second annual edition of those columns, which understand others – making them better able to see what’s next . offer a play-by-play perspective on the developments in the most dynamic ecosystem in the world . They are presented in the order published, giving Executive coaches say that Mondays are the most productive day of the you, more or less, a mini payments and commerce time capsule for 2018 . week – since it represents a fresh start and an opportunity to set and achieve new goals . I am pleased to share this collection with you – and hope you enjoy the look back, Scientists have offered seven reasons why the “Monday Blues” might be a as we all prepare to look ahead to real thing – using data to back up the claim held by many that Monday is the what’s next in 2019 . most dreaded day of the week . Until next Monday, I wasn’t born on a Monday nor do I think that it’s the worst day of the week – well, most of the time, anyway. But I do think it’s the right day to reflect on the week that we just left behind as a way to move, clear-eyed, into the week that’s yet to come . That’s why I’ve chosen Mondays to publish my weekly perspective on all things payments and commerce: To start a conversation about the moves – Karen Webster and the movers and shakers making them – and the transformation that is CEO | PYMNTS .com unfolding right before our very eyes . #52Mondays Payments 2018: Think This — Not That n 800 B .C ., when people wanted to It’s a very good thing that happened know the answer to “what’s next” after the king introduced the world’s first I about their personal futures, they general purpose payment method, the flocked to Delphi and askedPythia , the Lydian Stater — the official coin of the Oracle of Delphi . Lydian Empire — otherwise, who knows what we’d all be doing today . It was a bit of an ordeal . Thousands of years later, people the Only after engaging in a variety of rituals, world over still look for answers about the including drinking holy water, burning future, particularly at the start of a new laurel leaves, bathing in a specific body year . Fortunately, getting those answers of water near her cave, sacrificing a goat no longer involves animal sacrifice or and eating a pie offered by the answer- asking delusional people living in caves seeker, would she speak . This whole for answers . Payments 2018: process took a day or more, plus the time required to trek to the cave . It was said Since PYMNTS was founded more than that her highly valued pronouncements eight years ago to answer that very Think This — Not That were often incoherent, mostly because, question about payments, commerce experts speculate, the gasses inside her and retail, I’m going to share my cave made her delusional . thoughts on what 2018 has in store for us. Those thoughts reflect a few big The Oracle of Delphi wasn’t always right . themes organized around a couple of frameworks that I hope give you food for Croesus, the king of Lydia and one of her thought about what it means for you, your most ardent supporters, asked her advice organization and the future of payments about waging war against the Persian and commerce over the next twelve king Cyrus the Great, which she advised months . him to do . The decision to take that advice led to the fall of the Lydian Empire . And you didn’t even have to bring me a pie <wink> . © 2018 PYMNTS.com All Rights Reserved 6 © 2018 PYMNTS.com All Rights Reserved 7 Payments Innovation Payments 2018: Think This — Not That POWER BROKERS BOOST THEIR POWER to enable those purchases: type, click, Merchants from the smallest Mom-and- so many different ways consumers and text, voice, click, blink or swipe . Pop store to the biggest brands like commerce and payments can connect OK, you say, but hasn’t it always been that Nike and Gap can be found on Amazon without it, including other smartphone way? It has, but 2018 puts a different spin That also means the criteria for making and accessed via any device across any brands . Commerce-centric players can on who those power brokers are and how that power broker list has changed: The platform consumers want to use . make a thousand connected devices they will influence the future of payments. names on the list today are quite different bloom and influence how and where from those who might have appeared Ironically, the largest merchant app in Connected devices, and the access consumers shop and buy and how they even a couple of years ago . Apple’s ecosystem, Amazon, has built to consumers they make possible, pay . a Prime customer base that it’s now now shorten the distance between the Here’s why . taken to any device, increasingly giving Device-centric players with closed consumer and what they want to buy — at a multitude of other connected devices ecosystems remain at the mercy of the same time they increase the distance Think commerce first, not connected access to those consumers via its voice- producing smash hits that enough between the business the consumer devices. That means think Amazon, not activated assistant, Alexa . She (Alexa) consumers want to buy and use and keep once bought from and the brand of the Apple . and Amazon can direct any consumer buying and using . Year in and year out . payment method with which they may use purchase on or off Amazon, using to pay . When the iPhone and Android devices Amazon Pay to complete a payment . It’s why Apple and Siri struggle while were introduced about a decade ago, Amazon and Alexa prosper . It’s why the That’s shifting the balance of power in the pundits told the world to make way Alexa, the voice-activated assistant, HomePod remains a question mark and payments — and not necessarily to those for the new power brokers in payments: is now in everything from glasses to Apple Pay’s power as a payment method who make connected devices . Apple and Google . A decade later, it thermostats to washers to lights to will continue to sputter . It’s why even if hasn’t turned out that way . While their In fact, it’s quite the contrary . bathroom fixtures to cars, in its own Echo Apple would buy a car OEM, like a Tesla, operating systems and devices have devices as well as hundreds of others, it would remain just another one-trick enabled consumers to shop anytime The power brokers of 2018 and beyond and can enable commerce anywhere the hardware play, like the iPhone . and anywhere using smartphones, their are the players that control access to consumer wants to take her . respective attempts to control access to those devices through the commerce Connected devices enable commerce, but the consumer via their “Pays” have failed and payments platforms that consumers Device-independent but very much only if there is a commerce ecosystem to gain traction — on and offline. use — across any device, any platform Amazon payments-dependent . for them to tap . Hardware alone doesn’t and any operating system — when they control access to the customer anymore .