For those who haven’t had time to catch up with what’s been going on in the payments and eCommerce industry this week, here is our news roundup. Our focus spans from post-25 May GDPR compliance in Europe and beyond, to Facebook initiatives in India, alternative payments-related updates and Artificial Intelligence reflections, in the light of recent announcements.
GDPR after 25 May
Since data has become the most valuable digital era commodity, May 2018 is just the beginning, not the end for GDPR. Although awareness of the regulation has increased, for many businesses the journey towards compliance continues.
Companies have spent millions ahead of the GDPR rules, changed their data policies and invested in upgrading their systems. However, concerns still remain on whether the steps already taken are enough, given that the legislation does not clearly indicate how regulators will assess compliance. And although GDPR was created for EU citizens, its reach and influence stretches across the globe. Along with the concerns, inevitably.
In April 2018, less than a quarter of US companies involved in a Ponemon Institute survey were confident they would meet the GDPR deadline. However, Larry Ponemon, director of the Institute, said most companies would not manage to be compliant by the deadline, with many doing the “bare minimum”, according to a FT.com article. Additionally, as recent research from Capgemini reveals, only a few days before the deadline, 85% of companies in Europe and the US believed they were not ready for the new law. Also, 1 in 4 stated they will not be fully compliant by the end of this year.
The Silicon Valley brand names fear being targeted by regulators or activists filing complaints to regulators. Max Schrems, a privacy campaigner who has previously challenged Facebook’s ability to transfer data to the US, has already filed complaints against Facebook and Google via his non-profit organisation None Of Your Business.
GDPR-like regulations are already into effect in China, India, Singapore, Australia and many non-EU countries are reviewing GDPR as a model for their own privacy legislation. In India for example, in addition to the IT Act 2000, and the Information Technology Rules 2011, GDPR readiness has been described as “a boom” before the country’s own data protection act is released.
What‘s new in the land of alternative (non-card) payments?
This week, Dutch payment method iDEAL reported an increase in popularity not only in number of payments, but also among foreign online stores. According to the annual report of Currence, the product and brand owner of iDEAL, the number of payments has increased considerably more in the past year than in the previous five years, more specifically by 33.8%. The same source mentions that Dutch customers can now pay with iDEAL in over 7000 web shops across 60 foreign countries. One out of every three iDEAL payments in eCommerce is conducted in a foreign web shop.
Moving on to gaming-related news, we have some interesting PayPal insights. The former eBay division has shared the results from its 2018 global gaming research amongst paying gamers. Currently, gaming accounts for more than USD 12 billion in PayPal’s total payment volume globally, an increase of more than 23% year-over-year. Also, eSports and livestream video content represent the two fastest-growing forms of gaming video content in terms of viewership. More on the topic in one of our upcoming blog articles.
Turning our eyes to the US market, we find in a Yahoo Finance article not so optimistic news on mobile payments usage. Mobile payment in stores has not gained much steam in the US. Mobile transactions barely accounted for USD 1 out of every USD 100 spent in-stores in 2017. What’s more, industry observers do not foresee a notable increase in mobile payment usage — the percentage is expected to reach just 3.4% by 2022.
Industry observers often compare the US market with the Chinese one, but the latter has a disproportionately huge proximity mobile payment user penetration rate. By the end of this year, eMarketer predicts that over 77% of smartphone users in China will pay for a purchase at the physical point-of-sale via phone at least once every six months, versus only 25.3% in the US. Also, similar research published by Braintree indicates that nearly 50% of consumers frequently use their mobile devices to shop, but only 20% complete the transactions on their phones.
WhatsApp payment comes to India
The Indian market is about to become even more competitive. In a bid to win more Indian market share, Facebook is set to make its WhatsApp payment services available in India as early as next week.
The move mirrors the WeChat story, which reshaped payments in China when it decided to expand beyond its messaging core.
More than 200 million Indians already use WhatsApp messaging. Such a number also represents 60% of the US population and a daily active usage that Forrester estimates to be about 20 times higher than Paytm’s, as Bloomberg reports. Definitely positive signs, but will WhatsApp manage to change the payments game in India? This remains to be seen.
Last but not least, Artificial Intelligence (AI)
PayPal is set to entrust its future to AI with a startup acquisition. Jetlore is an AI-powered prediction platform which empowers global online retailers such as Uniqlo and Nordstrom Rack to deliver personalized customer experiences to increase sales and loyalty. The startup’s predictive technology analyzes customer data points and product data, including apparel attributes like sizes, color, fit, and style preferences, as well as brands and preferred materials. In related news, Rocket Internet, a European internet company headquartered in Berlin, targets USD 2.6 billion cash investment for fintech and AI.
Without a doubt, AI technology is changing the face of sales and eCommerce by intelligently improving the sales process. As a result, customers can be party to personalized recommendations and delve into a seamless shopping system. When used alongside other key strategies, AI can improve customer service and allow shoppers the chance to buy in a way that suits them, right from the initial browsing stage, where personalized recommendations are made especially for them, through to the payment process, where they can choose their preferred payment method to ease the pain of handing over their hard-earned cash.
And since it’s Friday, let’s take a moment to remember that AI has sparked remarkable but also scary developments, and will continue to incite endless debates, more or less hypothetical scenarios, but also industry reactions with a scientific or even anecdotal twist.
After all – in jest, isn’t there (a grain) of truth, as well?
Until next week.