In the era of technology and information, the payment sector has seen a major transformation, with cashless payments, cryptocurrency and online wallets changing how people transact money. It’s common now to see many people looking at Ethereum and buying it, and the reason behind this interest in digital currencies is convenience. In today’s world, modern customers want to get everything without much effort, which is why they find digital payment mediums so appealing – they offer them the best possible experience.
Digital payments have become integral to payment models
Initially, digital payment technologies were meant to enhance the capabilities of traditional payment models, but they gradually evolved considerably alongside the evolution of real-time payments. Real-time payments have become effective nowadays, and they aren’t just used for peer-to-peer channels but also for B2C and B2B use cases. Besides, the pandemic’s impact has also led to a world where cashless payments were accepted globally, replacing physical payments significantly. In the banking and financial sector, improving accountability and traceability to provide better user data security became a major concern, and digital payment technology seemed to offer the right solution, keeping security intact and creating a more efficient flow of economic resources, thus translating into seamless finance management.
What are the advantages of payment technologies?
Maintaining the global economy requires access to major financial resources, in particular when it comes to developing countries, and in this context, technology can be a game-changer as it bridges the gap and creates seamless fund transfer systems that can be easily accessed via online applications. Digital payments offer numerous benefits:
Convenience
One of the major benefits of digital payments is -obviously- convenience, which might have been the reason why they were created in the first place. Thanks to this alternative, customers no longer have to stand in a queue outside an ATM because they need to withdraw cash, nor do they have to fill out long forms that banks require. Now, receiving and sharing payments is possible with just a few mobile taps! Moreover, it’s possible to avail yourself of most banking services whenever you want, as everything is accessible through an online portal 24/7.
Improved tracking systems
Digital payment solutions offer more security than traditional payment methods do, as they are backed up by many great practices such as payment tokenization, encryption, and SSL, which allow customers to transact easily online while having peace of mind, knowing that their data is always secure. Moreover, the encrypted transaction records are maintained digitally, providing constant digital statements that enable effortless monitoring of them.
Enhanced customer experience
Incorporating new technologies in the payments landscape offers users different payment options based on what they find most convenient. They can access a self-service platform, allowing them to transact wherever they are in the world as long as they follow specific regulations and rules. When companies provide them with such seamless and convenient payment mediums, customers can only have a fulfilling experience.
Efficiency and negligible fees
There was a time when large-scale businesses made half of their payments using paper checks, and small-scale ventures did the same for 90% of transactions. However, this method of payment leads to significant hassle as it’s both time-consuming and expensive to collect and process paper checks. On average, processing a paper check costs around $5, while sharing an invoice costs $13. However, the cost aspect isn’t the only disadvantage of paper-based payment methods. They are also slow, as clearing a check can take around two weeks. This isn’t the case for paperless payment options, which are faster and also a lot cheaper, as digital portals and online wallets have negligible fees compared to traditional methods.
A look at the most prominent technologies that are transforming payments
Today, there are many payment processing services that integrate artificial intelligence and machine learning, and their benefits are tremendous when it comes to the customer experience. However, other prominent technologies are reshaping payments, and we will explore them in detail below.
Blockchain
Many companies in the financial sector are relying on blockchain to remove third parties’ intervention from the core processes. This distributed ledger technology helps create temper-proof and highly secure logs of sensitive user data, building trust and ensuring transparency while also reducing transactions time and costs. Blockchain is valuable for businesses because it considerably decreases the processing time to a few hours (when using traditional methods, it can take several days), particularly when it comes to cross-border payments.
AI-based voice payments
AI-based voice assistants benefit users when it comes to bill payments, as they have an integrated voice-tracking system. This system enables users to pay their bills by utilizing a specific set of commands, which translates into seamless and convenient payments. AI-powered smart speakers are likely to emerge as the next big thing in the tech landscape, transforming how companies interact with customers.
Internet of payments
The Internet of payments, also known as IoP, is significantly transforming the banking and financial industry. It enables fintech businesses to process transactions while using IoT-powered devices like smart automobiles and wearables. Interestingly, consumers can now use in-car payment apps to benefit from a seamless payment option at parking lots and gas stations.
Open-banking APIs
Open banking application programming interfaces (APIs) are also transformative because they enable legacy banks to transfer data effortlessly between each other while relying on third-party apps. B2B and B2C companies can use these APIs to incorporate their services and products into the platform of a non-financial company.
Mobile point of sale
Mobile point of sale is a popular technology that is transforming payments, offering a range of solutions in different areas, such as retail stores, parking lots, and hotels. For instance, a mobile POS solution enables customers to pay from a departmental store without them needing to wait in a queue at billing counters. Similarly, thanks to this technology, hotel staff no longer have to perform formalities when visitors are checking in or out.
The bottom line
The future of payment technology looks bright, and it undoubtedly gives businesses a competitive edge while providing customers with a convenient and satisfying experience. In the modern era where technology has taken over the world, embracing digital payment solutions is, without a doubt, a strategic move.
