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Customer Experience A catalyst for payments & commerce innovation

Jordan McKee, 451 Research, Research Director

SPONSORED BY DISCOVER GLOBAL NETWORK

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Disruption is here, and increasing

2Source: 451 Research, 2018n = 250 retailers

Next 3 YearsLast 3 Years

42%

55%

Level of Retail Disruption% of retailers that feel their industry is experiencing

‘major disruption’

3

Empowered customers are driving commerce disruption

Source: 451 Research

4

The cost of control: lack of payment choice results in lost sales

Source: 451 Research, 2018

5

Purchase volume is shifting into digital channels

Source: 451 Research Global Unified Commerce Forecast, 2018

► Marketplaces

► On-demand economy

► Mobile order-ahead

► Click-and-collect

► Showrooming

Digital innovations and behaviors are

driving volume online

14% CAGR from 2017 to 2022

US $bn

6

Emerging commerce endpoints will create new opportunities and challenges

Key IoT Implications

► New sales opportunities

► New customer journeys

► Battle for ‘top of wallet’

► Erosion of traditional acquiring channels

► New authentication & interaction interfaces

Source: 451 Research, 2018

7

Payment experiences directly impact business results

Source: 451 Research, 2018n = 5,000

8

Pay buttons show a path to an improved checkout experience

Source: 451 Research, 2018n = 1,000

9

Fraud is following digital commerce growth

23%

Significant increase

13%4%

18%

42%

No change Slight decreaseSlight increase Significant decrease

How would you describe the level of fraud occurring in your digital commerce channels compared to last year at this time? (Retail)

Thinking about the current state of fraud in digital commerce amongst your merchant customers, how does it compare to this time last year? (Digital Commerce Enablers)

20%

42%

25%

13%

0%

Source: 451 Research, 2017n = 500 merchants (top); n = 150 digital commerce enablers (bottom)

“We are seeing fraudsters monitor customer patterns and design highly planned attacks that mirror real customer behavior. Fraudsters are gaining access to immensely

private and confidential customer data.”D I R E C T O R O F D I G I T A L T E C H N O L O G Y,

e C O M M E R C E P L AT F O R M , $ 1 B N + R E V E N U E

11

‘False positives’ have long-term consequences

Source: 451 Research, 2018n = 1,000

12

13

Fraud prevention can be a strategic lever

Source: 451 Research, 2018n = 250 merchants

14

Payment and commerce experiences must be designed with the 3 C’s in mind

Source: 451 Research

Summary & Key Takeaways

15

Start with the customer experience and design around it

View payments as a critical customer experience factor

Use invisible approaches to fraud and authentication to elevate the CX

Make fraud prevention a strategic priority

Thank you

16

Don’t forget to submit your session evaluation!

Jordan McKee, 451 Research, Research Director

jmckee@451research.com

451research.com

@jordanhmckee

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