Payment technology is continually featuring contactless and cashless payment options, thanks to improving technology and innovation. Just like any other industry that is increasingly growing, reshaping, and readjusting to meet demands and needs, the financial service industry is no longer fixed on traditional payment methods. It is transforming and evolving to facilitate the financial lives of people globally. That is why many are embracing contactless and cashless payments to develop digital economies. However, what are the payment technology trends shaping these transformations and how should the payment industry respond for its overall success? Please read on to get the answers.
The Shift in Payment Industry; Payment Technology
The financial services industry is no longer fixed on traditional methods of payment such as cheques and invoices. On the contrary, the radical transformation is influencing society to increasingly become cashless and contactless. These options have proven to be faster and more efficient.
What’s more, payment technology has seen the rise of instant payments, digital wallets, and the use of virtual cards in payment. Interestingly, the transformation in the system is not only on the payment front and back end. Rather, payment technology is linked to structural changes in the ecosystem as well. For instance, businesses and companies now allow “buy now, pay later” (BNPL) to their customers. Furthermore, since an increasing number of users are trading in crypto, businesses offer cryptocurrency as a means of paying for goods and services. Besides, there are processes aimed at offering digital currencies.
Read: Virtual Credit/Debit Cards: How Do They Work?
Therefore, payment technology is steadily transforming the payment industry at large. It is no wonder businesses in the tech industry have been growing exponentially in the last couple of years. Additionally, the ecosystem can expect an increasing annual growth around three years from now. However, before then, what are some of the trends in payment technology that businesses should pay attention to?
Trends Shaping Contactless and Cashless Payment Options
Different trends drive the payment industry in a particular direction, and in this case, towards a contactless and cashless payment option. The following are the trends that key players in the payment industry e.g banks, fintech, card companies, big tech companies like Apple, Amazon, and Google, third-party processors, and other payment service providers should pay attention to;
Financial Inclusion
This has been a goal of the financial industry for a very long time. The initiative focused on getting a greater adult population as a part of the financial system so they can have accounts for storing their money and sending and receiving payments. Thankfully, payment technology has birthed easier and more affordable options for payment.
An increasing number of adults have access to a smartphone and with such devices, consumers and businesses can easily have transactions and complete payments.
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Digital Wallets
With digital wallets, consumers can use mobile devices to store their preferred payment methods. This way, whenever they need to make a payment, they can do so using their cards and accounts. So, the consumers do not necessarily need to have the cards. On the contrary, they can scan cards to complete the transactions. As a business, you should respond to this shift by offering them such a payment platform. You can achieve this through partnerships or investing in a related business.
Digital Currencies
These are virtual representations or digital tokens of currency. With the growth of the cryptocurrency space, it is predicted that an increasing number of consumers and businesses will deal in digital currencies. Therefore, as a brand, business, or financial institution, prepare to receive crypto payments in the future of contactless and cashless payment options.
Retail Payments
Unlike in the past when retailers limited customers on the payment methods and services they could use, payment technology has birthed a lot of flexibility. You can now integrate innovative technologies in modern payment systems to allow your customer to explore the cashless and contactless options. This way, you can satisfy the expectations and needs of the customer. Also, you get to expand your borders and grow your retail business.
Financial Crime
Unfortunately, this is one of the downsides of payment technology. As e-commerce evolved and transformed, so have cyber criminals and their hacking tactics. There have been increased cases reported; from fraudulent purchases to security breaches, data privacy risks, and compliance issues. Therefore, there is a serious concern among the key players in the payment system. This calls for more efforts by different sectors involved in seeking a solution; how to combat such financial crimes.
Read: Third-Party Payment Processor: How Does it Work?
Cross-Border Payments
Payment technology is geared towards time-saving, delivering convenience, reducing costs, and allowing global payments. It is no wonder new players in the industry are focusing on cashless and contactless means of payment that can be done regardless of your region of residence. Many people from different countries can now use instant payment systems. Therefore, you can expect more in the future of payment technology.
Online Banking
The traditional payment methods have been quite restrictive in how people move, use and manage their money. Thankfully, payment technology already has some great transformations, and you can only expect more in the future.
Many businesses are engaged in e-commerce and are taking advantage of various digital channels to not only market their businesses but to facilitate payment of goods and services. Moreover, a large percentage of consumers are involved in online purchases, and you can successfully do business online. Also, with the present reports, an increasing number of customers now opt for cashless and contactless payment options. This has undoubtedly led to a great shift and growth in online banking.
You can, therefore, expect the global online banking space to keep soaring in the coming years.
What Does This Mean For Your Business?
With the changes in the payment industry, how best can you embrace it to work toward the success of your business or organization? The great shift to a more contactless and cashless mode of payment by society is evident. Therefore, allocate resources to embrace and accommodate these transformations. Payment technology goes beyond the selling of your goods and services. Rather, focus on what you need to do to improve your customer experience and always be up to speed with the happenings in the industry. So, why not utilize payment technology to foster your business growth and be a part of this evolution shaping the globe?
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