By: Brent Harms

I recently had the opportunity to attend and participate in the 23rd Annual Card Forum and Expo Show in Miami Beach at the Fontainebleau Resort. First of all, what a fantastic setting for a conference! Beautiful beach and wonderful facilities. Kind of hard to not skip the speakers and head outside (especially if you are from Minnesota and just experienced a not so pleasant winter).

Well, back to the show. This is a conference that is normally pretty traditional with a lot of financial services executives in attendance, talking about interchange fees, credit card loyalty programs, government regulation,……. You get the point. Well, this year there was some truly new issues on the table; and they had several speakers and panelist from the merchant side (such as Best Buy, Kohl’s, Sears, and Hyatt). The following are a few highlights and issues of note that were presented and discussed:

•  There was a lot of talk about how we are going to soon see the end of magnetic stripe cards for payment. This is actually happening in a big way in Europe with the move to EMV (Europay, Mastercard, Visa "Chip and PIN" standard) and NFC (near field communications for mobile) technologies. Both of these are a lot very secure and have reduced fraud by up to 85%. The question isn’t so much if, but rather when. Merchants are waiting for the financial companies to pick a standard before they invest in the point-of-sale technology needed for the move. Some merchants are already installing the technology, such as Best Buy. What this means to loyalty programs is yet to be determined, but it will impact everything from cards used, or not used; to promotion options using NFC and mobile.

•  Kelly Hlavinka, Managing Partner from Colloquoy, moderated a panel on enterprise loyalty where she also shared their "The 2011 Forecast of U.S. Consumer Loyalty Program Points Value" article. The total perceived value of points and miles issued in 2010 in the U.S. for consumer-oriented rewards programs is estimated at $48 billion. The breakdown is $17B in travel and hospitality, $18B in financial services, $12B in retail, and $1B in other. The report also highlights the fact that the reward industry is at an "inflection point" and should focus on utilizing partnerships, making redemption easier, and stepping up communications.

•  Mobile continues to be the center of a lot of the buzz, with limited results to date, mostly from tests. Going forward, most see smart phones as the future for many new technology solutions from payment to promotions and loyalty program support. The "cloud" and resulting safer distributed data centers are helping move mobile forward, with NFC a key to enabling the use of smart phones for payment. There are now 4 billion smart phones worldwide with that expected to grow to 10B in 10 years. That’s more than one smart phone per person worldwide!! Whatever happens, mobile needs to be a part of your thoughts and strategy for the future.

•  During one of the keynote sessions, a speaker talked about the future of the industry. It was interesting how most companies that were worldwide leaders in the past gone away. Over 85% of the top 100 companies from 50 years ago are no longer around. His point is that one of the key failures of these companies is that they experienced "situational bias". They could only look at their industry with blinders and do not see broad shifts in customer needs. Blockbuster and their dominance to bankruptcy was a great example. They had the change to buy Netflix for $50 million in 1998! Now they are bankrupt.

The conference was well attended, up significantly from the previous year. It is clear that a lot of change is in the air, but also clear that no one has a good idea of the future; in ten years or even one year. For loyalty, many new options will be available. We will need to tailor programs to meet the individual needs and desires of each member; as well as each business that offers these programs to their customers.