With changing payment methods, increasing e-commerce use, improved broadband access, and the advent of new technologies, the cashless payment system is expanding tremendously. Can the rise in spam and cyberattacks slow down the market for online payments, or will it keep expanding quickly?
The worldwide digital payment market is anticipated to reach USD 6.6 trillion in 2021, increasing by around 40% in only two years. Groundbreaking developments including mobile wallets, peer-to-peer (P2P) mobile payments, real-time payments, and cryptocurrencies are accelerating the evolution of cashless payment methods. In order to meet the changing needs of consumers and businesses, numerous payment technology companies are partnering with conventional financial institutions. In both developed and developing nations, billions of consumers have begun accepting contactless payments as a result of improved broadband access, rising mobile commerce, the introduction of new technologies like Virtual Reality and Artificial Intelligence, and rapid digitalization. Additionally, the non-cash transaction ecosystem is being strengthened by expanding e-commerce enterprises, digital remittances, digital business payments, and mobile B2B payments.
Users of cashless transactions from all generations are increasingly embracing digital peer-to-peer (P2P) apps because they are more enticing and convenient to use. Users can make payments whenever and wherever they choose with in-app purchases or tap-and-go transactions, which take only a few seconds at the checkout. There are many approaches to secure payments while facilitating digital transactions, including tokenization, encryption, Secure Sockets Layer (SSL), and others. Additionally, users don’t need to repeatedly enter their information to finish the payment procedure. Online payment gateways thus facilitate trade in the modern economy and are essential for economic progress. With social distancing laws in place, digital payments are now required for contactless transactions rather than just being an option to stop the coronavirus from spreading.
Businesses are empowered by digital commerce
The importance of electronic payment systems has increased as consumers’ propensity for online buying grows. Most customers prefer purchasing online over going to traditional brick-and-mortar businesses thanks to expanding internet usage, rising smartphone use, and a variety of e-commerce possibilities. In order to maximise their profit earnings, businesses are moving online using an electronic payment option. The electronic payment system can be automated to reduce errors and save a significant amount of time and work. Users are protected from security breaches by rigorous criteria for fraud detection and prevention in digital transaction systems and AI-based fraud detections. Businesses can increase their customer base by giving customers the option to pay with credit/debit cards, mobile money, e-Wallets, etc. Because clients do not have to count money or deal with papers each time they wish to complete a transaction, the electronic payment procedure increases customer happiness.
Increasing Security Through Biometric Authentication
Recognizing biometric traits and structural characteristics includes confirming an individual’s identification through biometric authentication. The verification process may include heartbeat monitoring, vein mapping, iris detection, facial recognition, voice recognition, and fingerprint scanning. Biometric identification has emerged as a trustworthy and safe alternative for conducting digital transactions in light of the surge in identity theft and fraud. A recent study predicts that by 2023, a staggering 57% of all biometric transactions would be biometrically confirmed mobile commerce transactions. The adoption of tap-and-go payments on biometric payment cards is increasing because it enables consumers to complete digital transactions more quickly. Worldline, a provider of digital payment technology, is collaborating with French FinTech A3BC (Anything Anywhere Anytime Biometric Connection) to secure mobile phones using a two-factor authentication procedure. The integrated method does away with one-touch identification and instead detects fingerprints on a hand image. The vein-scanning payment system from FinGo, which enables users to authenticate transactions, will be made available by MasterCard.
Mobile Wallets’ dominance
In 2019, credit cards were surpassed by mobile wallets as the most widely used payment method worldwide. Digital wallets give consumers the freedom to keep a variety of payment options in a single digital location and convert cash into the electronic currency needed for online or in-person purchases. Financial institutions have already begun to embrace the digital wallet craze by giving business clients virtual cards. The virtual cards kept in digital wallets have the same functionality as traditional plastic cards, including the same 16-digit card number, CVV code, and expiration date. Only 37% of retailers currently accept mobile payments at the point of sale, but as acceptance increases, retailers are more prepared to invest in tools that support digital wallets. Due to their cheap processing costs and restrictions on transaction amounts and frequency, virtual wallets allow users to save money. Artificial intelligence (AI) is enhancing the user experience in terms of interactions with ChatBots, which are created to carry out and automate necessary exchanges in accordance with the user’s interests. Additionally, small to medium-sized businesses are embracing cryptographic money-based e-wallets to store digital currency. Since Amazon pioneered the idea of this platform, which is now being followed by Google and Apple, smart voice technology has contributed to the expansion of smart voice wallets.
E-Commerce Boom Boosting the Development of the Digital Payment Industry
A sonic boom is rippling throughout the FinTech industry as a result of the exponential rise of e-commerce. The type of financial services many e-commerce businesses offer is what fuels their expansion. It is convenient for the buyer and seller to conduct business online and to stay committed to the market. The COVID-19 epidemic brought newer trends to e-commerce innovation, including touchless transactions, virtual cards, QR codes, and various payment options at checkout counters (not using digital wallets). Additionally, the Buy Now Pay Later (BNPL) trend, which lessens the financial strain on the buyer, is ruling the e-commerce sector. With the help of BNPL, consumers may purchase what they require, keep the inventory moving, and make overtime payments without having these actions negatively impact their credit score. Businesses can benefit from increased checkout flexibility and much-needed liquidity thanks to BNPL. For more details cvv2-shop
