Ten Years of Predictions: What We Got Right – and Where We Missed the Mark.

Ten Years of Predictions: What We Got Right – and Where We Missed the Mark.

Ten Years of ngenuity Predictions: What We Got Right – and Where We Missed the Mark.

Erin M. Sarris

Erin M. Sarris

Erin M. Sarris is the managing editor of n>genuity journal. With more than 10 years of experience in payments, she oversees all aspects of the publication to ensure it covers a variety of topics related to financial services.

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One of our favorite questions to ask in interviews is "If you had a crystal ball to predict the future, what do you see in it?"

Over the last 10 years, we've seen some memorable predictions in ngenuity — and many have come to pass, regardless of how unlikely they seemed at the time.

To put this into perspective, when we published articles about the future of mobile payments in 2008, only 31 percent of consumers used text messages daily, and people only spent 4.5 hours per month (!) using the web on their smartphones. Just 14 percent of consumers even owned smartphones in the first place. It was difficult to imagine the full impact they'd have on the payments space. Yet, our brilliant authors were always willing to plant their flags and share their best guesses.

But, alas, you can't win them all. Here are just 14 of the hundreds of predictions we've made over the last decade, along with a summary of where things stand today.

To see a timeline of many more milestones from the last decade, click here.

Prediction #1: Social networking

"Gen Y appears to be re-shaping the business world with their new behavior, as they spend nearly all their time — and soon their money — in all-consuming, communications-integrated social network venues like Facebook." (Spring 2009)

Crystal ball with an X symbol showing

OUTCOME: FALSE
There's no doubt Facebook managed to completely redefine how Gen Y (and other generations for that matter) communicate and interact. However, when it came to redefining how they transact, Facebook fumbled. Today, there still is no substantial payments vehicle within Facebook, aside from a slowly adopted P2P function within its Messenger app. And while there’s no doubt Facebook has made commerce a more central part of its strategy through ads, the exchange of funds takes place outside of the social platform.

Prediction #2: Merchant-funded rewards

"While merchant-funded rewards are still relatively new, they are expected to have a big impact on how card issuers distribute rewards. This new model will revolutionize the rewards business as we know it." (Spring 2012)

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OUTCOME: TRUE
Post-Durbin, merchant-funded shopping emerged as a viable way for issuers to realize additional revenue in return for driving consumer spending toward specific merchants. This was groundbreaking at the time, as traditional credit and debit card programs had banks funding goods and services to give away to loyal customers. These days, merchant-funded models have indeed revolutionized rewards with major players like LevelUp, Shopkick and even merchant-backed apps like Starbucks.

Prediction #3: Airline rewards cards

"Most rewards cardholders think that their cards' value propositions are less valuable than they thought they were two years ago. This was particularly the case with airline rewards cards, where consumers have reacted negatively toward the increase in mileage redemption fees, fewer available reward seats and the introduction of more fee-based services. Airline rewards cards have long been seen as 'can't miss' propositions. Now they, along with all other consumer propositions, must be revisited." (Spring 2009)

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OUTCOME: FALSE
Talk about a comeback. Little did we know that just a decade down the road, airline rewards would make a massive rebound — especially in the premium segment. We're currently enjoying a golden age of credit card rewards, with issuers spending significantly to snag new customers with cash-back, travel perks and, yes, airline tickets. For a more detailed look at the sky-high rewards movement, click here.

Prediction #4: Specialized payment options

"Just as television has evolved well beyond the three major broadcast networks to encompass hundreds of cable networks, we expect to see a continued proliferation of specialized payment options beyond traditional networks. While not all of these new alternative payment providers will obtain enough critical mass to be successful, enough will survive to make the payments field resemble the current television landscape." (Spring 2009)

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OUTCOME: FALSE
Nope, nope and nope. Granted, there have been gains in P2P newcomers like Venmo and Zelle, but the big-name networks have exhibited staying power that has kept new entrants on the sidelines of mainstream for now.

Prediction #5: Cooperation between stakeholders

"One of the special challenges in the world of electronic payments is that executing on a potential innovation [will require] the cooperation of a group of stakeholders who need to collaborate in some fashion to enable success." (Fall 2009)

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OUTCOME: TRUE
Remember how far-fetched marshalling all the various partners seemed . . . until Apple managed to do it? Among the proliferation of mobile wallets, there's no debate that Apple Pay remains in the lead due to its cooperation with legacy payments players like the banks, networks and processors. And since its inception, Apple Pay has succeeded in enticing merchants. It's now accepted by big-name brands such as Starbucks, Macy's, Best Buy, Staples, Whole Foods, Panera Bread, McDonald's, Walgreens and Chevron.

Prediction #6: A common digital currency

"It is feasible in the online world that payments can be made in a common digital currency, irrespective of country. A global or even regional digital currency, recognized as legal tender for electronic retail payments, could be pegged to a basket of the most important national currencies, thereby minimizing risks in currency fluctuation and limiting currency speculation. If electronic payments were the big story in the last century, the streamlining of international cross-border currency payments could be the big story of this century." (Winter 2010)

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OUTCOME: MOSTLY TRUE
This was how people wrote about cryptocurrency before cryptocurrency existed, solving mostly for cross-border transactions rather than privacy. A global currency that transcended boundaries? Right on. Being tied to central banks' currencies and subject to political forces? Not so much.

Prediction #7: The Durbin Amendment

"The implementation of the Durbin Amendment marks a major discontinuity in a U.S. payments landscape that had seemingly been settling into a period of relatively comfortable homeostasis. The coming years will probably be quite the opposite." (Summer 2011)

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OUTCOME: TRUE
No two ways about it — The Dodd-Frank Act (and the resulting Durbin Amendment) rewrote the traditional interchange model and left banks and processors working to adjust their sails to implement this huge change. It was indeed a tumultuous few years, but now these seismic rules are just the new norm.

Prediction #8: The new CFPB

"Will the opposition defang or kill the new CFPB? Only time will tell, but most industry pundits expect it to move forward as enacted. There is speculation that President Obama will make a recess appointment of Elizabeth Warren as CFPB director, since the Senate is likely to hold up her confirmation indefinitely." (Summer 2011)

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OUTCOME: MOSTLY FALSE
While Warren did chair the Congressional Oversight Panel, and was a longtime advocate for the creation of the Consumer Financial Protection Bureau (CFPB), she never chaired it. And as for its fangs, the agenda did manage to keep all of its teeth (growing pains aside) during the Obama administration. However, once President Trump appointed Rep. Mick Mulvaney as the CFPB’s acting director in 2017, its purpose and path forward become less clear. Along with a name change to the Bureau of Consumer Financial Protection, its purpose appears to be in transition, as well. Which means we're right back where the 2011 prediction started: only time will tell.

Prediction #9: Sharing data with retailers

"I believe that in the near future, we'll be standing in a department store and our clothing could be sharing data with the retailer about how long we've owned that particular pair of jeans, how many wash cycles are left and the item's estimated life expectancy based on how we've been using it. So it wouldn't surprise me at all if a sales associate came up to me and said, 'Excuse me sir? I just wanted to let you know that you've probably got four months left of wear in your jeans. We have a sale today for 50 percent off — if you’re interested, they're in aisle number five, just over there on your left. Your size is on hanger number four.' Imagine that." (Spring 2012)

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OUTCOME: FALSE
This is a tough one to classify as 'false,' because it does seem like we are getting closer to future-state shopping experiences as described. Store-movement sensing, facial recognition, product positioning, customer identification and augmented reality technologies are being combined into some amazing possibilities that turn your average bricks-and-mortar store into the most personalized shopping experience. And as a consumer, it's certainly exciting (albeit a bit creepy) to think about smart jeans becoming our reality. However, it feels like we're still a long way off from this type of completely frictionless customer interaction.

Prediction #10: Hybrid cards

"While hybrid cards are still new, their issuance is expected to swell in the wake of the Durbin Amendment, which has severely curtailed the amount of revenue banks can earn from debit card interchange fees." (Winter 2012)

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OUTCOME: FALSE
Bet it's been a few years since you've heard the phrase 'hybrid card.' These credit-debit combination cards offered consumers dual payment options and were expected to help issuers respond to Durbin's debit card fee caps by offering more consumer choice. There was a lot of hype — but remarkably slow adoption and a lack of consumer appetite, with an exception in the one hybrid card that actually came to market — Fifth Third's Duo Card. The rest of the industry leapfrogged ahead to mobile wallets, providing the same benefits to consumers.

Prediction #11: Payments layering

"The future of payments, at least for the next several decades, will be one in which all of these payment methods — cash, credit, debit, prepaid, private label — peacefully coexist. 'Payments layering' will be the new catchphrase as new payments methods simply fall into place on top of the old." (Spring 2013)

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OUTCOME: MOSTLY TRUE
While the phrase 'payments layering' may have had its last mention in those pages more than five years ago, the concept behind it remains as true as ever. Sometimes it seems like our sole purpose as an industry is to help propel new technologies and innovations without accepting the fact that cash, checks and cards are pretty convenient to begin with. In the end, it means getting comfortable with legacy technology sticking around for much longer than we previously anticipated.

Prediction #12: The blockchain

"While Bitcoin was initially envisioned primarily as a currency, many believe the long-term value lies not in the currency but in the system. The lynchpin of the Bitcoin system is in the blockchain." (Fall 2014)

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OUTCOME: TRUE...FOR NOW
Trying to predict how Bitcoin technology will evolve (even today) is difficult. It often feels like trying to predict how the internet would affect commerce back in the 1990s. Elements of the blockchain have been repurposed for applications unthinkable at outset, (like ownership, identity and contracts) but right now, the jury's still out on whether the cryptocurrencies will stick around.

Prediction #13: Contactless cards

"We've seen from experience with the contactless cards that it was a very costly and difficult additional process, so it's going to require an even stronger commitment from the retailers and card issuers to educate and inform consumers. But consumers learn quickly, as we have seen already with the high-tech retail POS devices and self-checkout stations that have been installed in the last three years. Each new generation of consumers learns faster than the previous generation." (Summer 2011)

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OUTCOME: FALSE
Whether this generation learns faster than its predecessors remains to be seen, but one thing is for certain: the move from mag-stripe to chip was a far more clunky user experience than anyone expected. There was the (real or perceived) lag time at the point of sale, and three years later many U.S. consumers still struggle with sticking their card inside the machine, waiting for an indeterminate number of seconds, and then pulling it out. Yet, maybe that's what will ultimately make tapping, hovering or even blinking seem more appealing.

Prediction #14: Great opportunities

"Mark your calendars. History will show that 2008 was a time of great opportunity in the credit card market." (Fall 2008)

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OUTCOME: TRUE
After the fallout from charge-offs and account closings in the recession, issuers with better underwriting emerged stronger, with an emphasis on enticing new customers with rewards programs. However, it seems like we may be headed back to where we started. Read more about how several of 2008's warning bells are sounding again.

The statements and opinions of the writer do not necessarily reflect those of TSYS.

Other Articles by Erin

Erin M. Sarris

Erin M. Sarris is the managing editor of n>genuity journal. With more than 10 years of experience in payments, she oversees all aspects of the publication to ensure it covers a variety of topics related to financial services, including mobile, B2B and emerging technology.

Erin has written for publications of The Chicago Tribune, RedEye and Metromix.com, as well as The Washington Post's Retirement Living, TV Guide, Washington Spaces, Columbus Valley Parent and The Peoria Journal Star. She graduated from Bradley University with a bachelor of science in political science and communication, and from Columbus State University with a master’s in business administration.

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