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Commerce Conversations Roundup: January 2023

By February 1, 2023February 3rd, 2023No Comments

2022 DCA Industry Study Shows Strong Annual Growth

More than one-third of respondents report card-linking growth rates up more than 100 percent

HERNDON, Va. (Dec. 19, 2022)—The Digital Commerce Alliance (DCA) released 2022 data revealing industry trends related to the card-linking, mobile wallet, and financial data space at the annual DCA Summit held earlier this month.

Among the global trade association’s findings in its seventh annual study, the use of card-linking is up. Thirty-seven percent of those who responded reported program growth of 100 percent or more; a quarter reported program growth of 50 percent to 100 percent.

Card-linked loyalty programs are used by 45 percent of survey respondents (up 11 percentage points since 2020). Card-linked offers are used by 52 percent (up seven percentage points since 2020).

“Card-linking continues to grow,” said Dan Currell, Chief Executive Officer of DCA. “The results of this survey show that marketing leaders increasingly count on card-linking to engage consumers and drive growth.”

Other key findings include:

  • Restaurants are back in the top two merchant categories for card-linking in 2022, just behind e-commerce. Grocery had taken a second place in 2021 due to a shift towards eating at home during the height of the pandemic.
  • Covid helped digital commerce long-term. More than 70 percent of respondents this year noted that the pandemic, despite the disruption, fear and uncertainty associated with it, drove the industry’s need to innovate and consumers’ need to adapt.
  • The idea that data should be owned by consumers is gaining ground. Seventy percent of those who participated in this year’s study said it is “very important” that consumers own their own financial data. More than 78 percent agreed that a consumer’s permission should be required before sharing data.
  • Industry priorities are evolving. As a sense of normalcy takes hold, there’s more room on respondents’ agendas to focus on ESG initiatives, including diversity in the workplace, financial literacy, social advocacy, and education.

The DCA research team polled digital commerce leaders from around the world, including the U.S. and Canada, Australia, the U.K., and Japan. Respondents ranged from start-up/small companies (up to 99 employees—29 percent), to mid-sized (100 to 999 employees—24 percent), to large (1,000 to 4,999 employees—8%), to enterprise organizations (5,000 + employees—40%).

Completing the survey were executives from banks/card issuers, payments companies, card-linking technology providers, CPG companies, retailers/merchants, loyalty companies, digital advertising platforms, mobile wallets, and mobile apps.

Members of DCA are from organizations as varied as Microsoft, Sam’s Club/Walmart, Bank of America, RBC, Google Pay, Mastercard, VantageScore, Cardlytics and Valuedynamx shared their experiences and perceptions.

Download: 2022 Digital Commerce Annual Industry Study


About the Digital Commerce Alliance (DCA)

The Digital Commerce Alliance (DCA) is a global trade association focused on driving the future of digital commerce by promoting collaboration, education, and technology standards in digital commerce, with a special emphasis on financial data, mobile wallets and card-linked offers and loyalty programs.

DCA members serve or represent more than 6 million merchants, have issued close to 2 billion payment cards, and meet the needs of consumers with 200 million+ card-enabled accounts and more than 700 million active daily users.

Buying & Selling FinTech Companies

Two veteran investors talk about what they look for, what has changed, and what’s the same. Contact DCA if you’d like to view the interview.

Last week, DCA hosted two veteran FinTech investors for a frank conversation about how they think about buying companies – and to get their stories of successes, mistakes, and surprises good and bad.  David Kristal, Founder and CEO of Augeo, described his approach to finding companies that are a cultural and operational fit.  Justin Kaufenberg, Managing Director at Rally Ventures, laid out his approach to front-loading major changes after an acquisition – and how that influenced the decision of what and how to acquire.

Augeo has bought businesses including Empyr, Wingnut, MotivAction, Deluxe Rewards, and most recently Structural. Augeo has also sold businesses, including most recently Figg.

Rally Ventures has a nationwide portfolio that includes companies in AI/ML, cybersecurity, fintech, HRtech and SaaS+.

Clippings from the conversation

David and Justin responded to the questions below – with a few stories from gymnastics to Web3 thrown in for good measure.

  1. What would you do differently in those first transaction?
  2. Did you ever get really lucky?
  3. Is there one you’re glad you didn’t buy?  Why?
  4. The current environment is so different from a year ago.  How is that changing your approach?
  5. What is the most common valuation approach and multiple being used today?
  6. What’s the most important thing to get right in purchase negotiations for a buyer?
  7. Is there one thing you always look for in a company?
  8. Is there something that tells you you’re going to get burned?
  9. What’s the most common misperception about what buyers are looking for?
  10. Where do sellers most commonly make mistakes?

Friction in Digital Commerce

Consumers Do What’s Easy

Happy New Year!

DCA members are talking about lots of things as 2023 dawns – big plans, exciting innovations, the next big DCA meeting (April, in San Francisco – more to come on that).  But we had an important conversation this week about a perennial issue: friction.

Physical friction slows things down.  That’s why skiing is more fun when there’s snow, and considerably less fun when you hit a patch of grass.  (Good news: after the last two weeks, there’s no grass to be seen on most ski hills.)

Friction in digital commerce is more of a metaphor, but just as unpleasant.  The dream is frictionless digital loyalty and rewards programming – merchant systems know who the customer is, the customer’s status and preferences, and those factors are taken into account automatically in every transaction.

I had an example of a low-friction transaction today: I am writing this from the Turkish Airlines lounge at Washington-Dulles.  Getting in involved two things, both on my phone: Priority Pass from my digital wallet and my Delta boarding pass.  The machine beeped, I got in.

At least in theory, it could have been one step easier if the system “knew” me better – one beep of Priority Pass or my boarding pass, and I’d be in.

Friction losses are real.  Car engines have a lot of friction and are about 50% efficient – i.e., about half the energy a car consumes is converted into forward motion.  Bicycles are around 98% efficient, because their “engines” (pedals, chain, cogs, bearings) have so little friction.

So too, when a digital commerce system is complicated, that requires extra effort and further steps – and it also means we simply lose transactions.  I was informed by a member this week that a card I have in my wallet right now was offering 10% off gas in December.  I spent a lot of money on fuel last month (we drove to grandma’s house for Christmas, as one does), but had no idea about the offer, so I didn’t use it.  That’s a complexity problem, which is – strictly speaking – a sibling of friction, not quite exactly the same thing.

But it’s hard to reduce friction without reducing complexity.  And both of those things involve using better-quality data to tailor experiences to consumers in a way that fits them best.


The Conversation

  1. The “Norm Standard” is true frictionless commerce: Norm walks into Cheers, everyone yells “Norm!” – and a beer shows up at his seat.  Thinking radically, what could you do to achieve “The Norm Standard” for your consumers?
  2. In the real world of today, what are the most steps a consumer may have to take in order for your systems to recognize them?
  3. What are the least number of steps?
  4. By the end of 2023, how will you know if you have closed the gap – i.e. reduced the number of consumers who take a larger number of steps to claim a benefit or participate in a program?


Related DCA Resource:

Commerce Code Episode 93: Simplifying Payments by Embedding Transactions Into Retail Software

Commerce Code Episode 101: New Solutions for Loyalty Programs and Consumers

Commerce Code Episode 103: Fin-Tech Innovation and Open Banking

AI & Hyper-Personalized Offers

Imagining what’s possible when machines know everything

Recent events (mostly the release of ChatGPT, followed by Microsoft’s investment in OpenAI, its creator) have highlighted the difference between machine learning and deep learning.

Machine learning is robotic, often failing to grasp context.  We might think of it like the brain of an ant.  Deep learning is based on artificial neural networks – it mimics the brain.  Deep learning is nowhere near as smart as humans yet, but we might imagine it to be like the brain of a guide dog:* awfully good at recognizing patterns and grasping context.  Deep learning can be incredibly helpful, just as a guide dog can be incredibly helpful.  And since deep learning models run on powerful computers, they are like a million guide dogs.

This analogy has officially gone way too far.  But you get the idea.

What is Driving the Conversation? 

We talked this week with a few DCA members who described different visions for what AI can do for offers.  One laid out a vision for “hyper-personalized offers.”  Imagine an ad in which your favorite actor (deep-faked with permission and royalties paid) looks you in the eye, addresses you by name, and suggests that you would love trying a new brand of golf balls, since golf is your passion.  He points out that you can get 20% off a sleeve of balls at any pro shop with the Mastercard you already have in your wallet.

It’s worth imagining this.  All the technology exists – it just needs to be stitched together and fed with (permissioned) consumer data.  When it happens – and at this point, it’s more “when it happens” than “whether it happens” – there will be a mad scramble to adapt to the new reality.

Questions DCA Members are Asking: 

  1. What can we do today to leverage deep learning tools to increase our productivity in touching consumers with compelling offers?
  2. How much of a first-mover advantage will there be? Are we better off being a fast-follower?
  3. Does any of this get developed by our company, or do we partner for all of it?
  4. Do we control any of the input data (i.e., consumer data) that could be critical to creating hyper-personalized offers?
  5. With whom could we partner to enrich the data we already have?
  6. How do we deliver increasingly personalized offers without triggering a negative consumer reaction?

Related DCA Resource:

We’re working with a DCA member on the cutting edge of AI to develop an Expert Session on this topic in the coming months – stay tuned!

*A note for cat people.  Cats are at least as smart as dogs, and a “guide cat” is laughable only because cat brains are so finely tuned for circumspection and contempt.  Please feel free to insert “cat” where you read “dog” above, or to discard the whole idea – with contempt.

EPISODE 148: Unpaking the DCA 2022 Industry Study

On this episode of Commerce Code we speak with Erin Warren, General Manager of Rakuten’s Card Linked Offer Network. We unpack the 2022 DCA Industry Study, a wide-reaching survey-based analysis of the state of digital commerce.

Digital Commerce Alliance members include the largest and most innovative companies in fin-tech, payments, retail, e-commerce and mobile wallets. Members include Microsoft, Rakuten, UBS, RBC, Mastercard, Discover, Valuedynamx, FIS, Sam’s Club, TransUnion, Augeo, Bank of America and many more in 17 countries and 4 continents.

We are bringing their insights from around the world straight to you in an informative podcast called Commerce Code. The podcast features insights, interviews and the latest news from DCA members worldwide. Stay connected and subscribe to DCA’s Commerce Code.

New Member Spotlight

Please Welcome vPromos to the Digital Commerce Alliance!

vPromos is a leading real-time, card-linked loyalty and mobile marketing company. Their patented cloud-based suite of solutions for small businesses to huge franchise enterprises enables quick, easy and convenient loyalty program enrollment at the point-of-purchase, real-time access to historical purchasing data to optimize point-of-sale targeted offers and compliant SMS text messaging engagement to communicate with customers, all with seamless payments integration.

DCA Virtual Events

Open Banking’s Business Opportunities: Creating New Use Cases & Eveluating Value Propositions

Virtual | Wed, February 22nd

12pm – 2pm EST

Our DCA Strategy Sprint is a 120-minute virtual working session. Participants will work in breakout groups to create an fast-cycle analysis of opportunities and issues created by the move to open banking.  Participants get to know each other by building something together, and their analysis is then shared with the DCA membership.

This Strategy Sprint will be led by DCA member Ramy Nassar, co-founder and Chief Experience Officer of Olive Ltd. and co-founder and Managing Partner of 1000 Days Out.

Discussion Leader | Ramy Nassar – Chief Experience Officer, Olive
Register Now

DCA Live Events


Wednesday, March 8th, 2023 | London, UK

Roundtable: The Future of Digital Loyalty in Europe

Reserve Your Spot

DCA Spring Summit

Tuesday, April 11th, 2023| San Francisco, CA

The Next Generation of Digital Offers and Payments

Reserve Your Spot

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