TREND 1TREND 2TREND 3TREND 4 TREND 5 GEN Z RISINGUX IS THE NEW GOLDMOBILE HIT ITS GROOVEREWARDS REVOLUTIONTHE NETWORK EFFECT TREND 4 REWARDS REVOLUTION Consumers want more and more—and still more—in rewards and are willing to switch cards TREND 6TREND 7TREND 8TREND 9 TREND 10 to get it. FINTECH AND BANK FUSIONAN ARMS RACE IN CODEPAYMENTS EVERYWHEREFRAUDSTERS INNOVATE TOORIP AND REPLACE REQUIRED Consumer spending on rewards cards since the Great Recession has skyrocketed. Last year, consumers received $15 billion in rewards value through cash back, miles and points, according to our estimates and analysis. But there is a tug-of-war going on. Rewards are hitting new highs while the interchange remains relatively flat in the United States and has been reduced in Canada. % Something has to give. In the end, it will be the nature of rewards. 48 This push and pull of opposing forces has intensified in recent years. Banks, of consumers would card companies and retailers are locked in a battle of wills—and significant switch their primary investments—as they introduce one-up premium rewards cards that extend rewards card to get rewards value. Our analysis of publically available card company data reveals more value for their that one company’s marketing and rewards costs as a percent of revenue more purchases, and 42 than doubled from 2008 to 2016 from nine percent to 20 percent. Another’s percent would switch jumped from 18 to 29 percent. At the same time, major discount retailers often for a large up-front pay small fees to accept credit cards. 4 This unsustainable friction between rewards and interchange fees means two sign-up bonus. things. First, the traditional rewards model is at or close to peak. Second, it is Source: Accenture 2017 North time for a new rewards playbook. Put simply, consumers want more rewards. America Consumer Payments Consumers are most likely to switch their primary rewards cards for a large Pulse Survey up-front signing bonus or more points or cash back on their purchases. Convenience is key too. Seventy-six percent of our survey respondents want to redeem deals tied to their card when swiping at the point of sale. Already, Google’s Smart Tap technology makes it possible to pay and redeem a loyalty card at once. Consumers also crave personalized rewards. Half of those we surveyed are interested in or can be convinced with the right incentives to share their personal information to get more relevant offers. While competition will continue to be intense, payments players have tremendous opportunities to deliver next-generation rewards. Innovation will start with a clean slate and have many looks. Digital ecosystems will find ways to broaden the relevance and reach of rewards. Rewards will go beyond the card as consumer product companies partner with payments providers to digitize their coupons and offers. In essence, tomorrow’s rewards will move beyond payments and become more experience based. They will reflect consumers’ lifestyle needs and will be delivered seamlessly in real time. Copyright © 2017 Accenture. All rights reserved. DRIVING THE FUTURE OF PAYMENTS 10 MEGA TRENDS | 7