It seems a pretty good bet that Google, Apple and the rest have read Juniper Research’s latest report on digital commerce. It is (and there are no prizes for getting this one right) going to take off – big time – in the next five years.
Sitting at a decent $11.2 trillion as of this year, it is set to grow 66% over the period to an eye-wateringly decent $18.7 trillion by 2024.
The key factors in this digital commerce battleground, according to Juniper, will be user experience and seamless yet secure payments processes. And this seamlessness in shopping and payments will also become mainstream in IoT devices such as smart speakers. One huge growth area will be the purchase of physical goods online, driven by traditional retailers as they invest in online and omni-channel processes.
While that is interesting, what makes it more interesting is the recent announcements from the big tech community around payments and money transfers.
Apple has launched its credit card with Goldman Sachs and the incentive of credit for users meant that Goldman had given about $10 billion in credit by the end of the first month. As such it would be safe to say it is going pretty well. Google has also made a ‘mutually beneficial’ partnership move with Citi and is planning to launch banking services next year. And as is widely reported, Facebook has launched payments and transfer services within two of its apps but is being thwarted by regulators and politicians as it tries to launch its own cryptocurrency, Libra.
Even Amex, notoriously expensive to merchants, is offering incentives to try and regain ground that it has lost to MasterCard and Visa over the years. And, of course, it is an arena that legacy banks and financial institutions are not going to give up lightly. Investment in digital transformation across the banking sector is presumably set for major review and acceleration.
It is clearly a pie that Apple, Google, Facebook want a significant slice of and one that Amazon will fight with all its might to protect. The prize is of a size that has attracted the full attention of all the biggest of big tech companies and it could be the moment (or the year) when Facebook fails to gain any real traction in the digital commerce arena and becomes an also ran. Since drafting this article, PayPal has upped it game, buying targeted shopping and rewards company, Honey.
Let’s hope – for all our sakes – that this battle does not lead to the big tech companies taking on sub-prime debt and creating another toxic bubble that will explode and create a mess like the one in 2008 did.