Everything from shopping to working has been turned upside down due to the advancement of technology and globalization. This will reshape the payments industry in myriad ways, and there will be no shortage of innovation and competition.
New technologies in payment systems have also joined the trend of merchants and consumers moving towards e-commerce and digital shopping habits. Payments must be fast and efficient, and financial and business institutions will develop new solutions to make payments simple and seamless.
As a result, payment systems keep pace with new technologies. The purpose of this article is to provide a simple and clear understanding of the new technologies in payment systems this year.
What is the Future of the Payment System
Nowadays, digital transformation has started taking place in a new way in terms of payments. Also, it is seen that payment processes that take a lot of time in businesses become more efficient and effortless. For some consumers, digital experiences are unfamiliar and incomprehensible but can be expected to change dramatically in the future.
Globally, cash is the main form of payment in almost all businesses. However, in the next few years, it can be expected that a significant portion of payments worldwide will be made using cash.
What are Digital Payments
A payment made electronically can simply be called a digital payment. Digital payment technologies such as mobile wallets or mobile payment applications are used for this. This involves the electronic transfer of cash or digital currency from one account to another.
What are the New Technologies for Global Payment Systems
It is no secret that new technologies for global payment systems are being developed day by day. Consumers can find an unprecedented variety of payment services to choose from in the global market.
By now, even big businesses have started moving in that direction. For example, we have experienced the advent of PayPal and cryptocurrency markets.
Electronic payments are always needed in e-commerce. Examples of online electronic payments include bank transfers, eChecks, and cash on delivery.
Digital Payment Technologies
Did you know that digital payment services include artificial intelligence? As consumers continue to conduct their transactions through digital technologies, machine learning technology is capable of studying this information. And the technology is improved over time.
Consumers definitely expect an easy way to accept payments online, and as a result, technology can be expected to improve. Accordingly, below are some of the new technologies in payment systems this year.
Mobile payment apps
Nowadays people don’t like to carry cash. Online payment platforms emerged as a result, and you don’t need to carry a wallet. By using these payment apps you can make payments anywhere. The main reason for the popularity of mobile payment apps is that they can save time and help facilitate money transactions.
Some of the most popular and widely used mobile applications include Money App, PayPal, Zelle, Google Pay, Venmo, Xoom, Samsung Pay, Apple Pay, and Square Cash. People don’t have to stand in queues or wait for their money to be transferred, and nowadays UPI transactions and online payments can be done very easily.
Mobile wallets
A mobile wallet is a virtual wallet that facilitates a user to make in-store payments. This can only be used by merchants listed with the service provider and stores payment card information on a mobile device. This technology stores card information directly on a mobile device and uses contactless near-field communication.
The main advantage of using a mobile wallet is convenience and fraud reduction, and consumers are increasingly turning to it based on that reason. Some of the more popular options include PayPal, Apple Pay, Google Pay, Samsung Pay, Google Wallet, Alipay, and Android Pay. But even this year there are times when you won’t be able to use your digital wallet for all transactions.
Open banking APIs
Open banking allows third parties to develop new applications and services. That is, application programming interfaces share data and information through a third-party application. In open banking services, customers are charged based on the services used.
By early 2021, only a handful of financial institutions were actually using APIs. Because using APIs with older technology infrastructures is a challenge. But by this year, its use has increased by about 10% over the previous year.
This is an era where open banking is spreading technology in digital banking around the world. Open banking has the potential to transform the way we interact with customers.
Contactless payments
This enables the adoption of contactless payment methods using RFID technology and near-field communication. Accordingly, this is a secure payment method that can be made using a card or payment device. The use of this technology increased during the pandemic due to past health restrictions.
Credit and debit cards with near-field communication technology and mobile wallets such as Apple and Samsung Pay enable contactless payments. This has increased usage as customers do not need to enter a PIN and is considered a quick and convenient way to make contactless payments.
Although contactless payments reduce the risk to both the consumer and the merchant, fraudsters still commit fraud such as skimming cards in wallets.
New Trends for Payment System
The increasing preference for digital payments over cash is increasing day by day. Digital payments can be seen as a very successful way for new businesses to reach customers in new ways.
# Financial volatility amid the pandemic will keep debit card usage strong, but growth will be steady this year.
# Increasing demand for Mobile Point of Sale is a trend that can be seen this year.
# Competitive benefits such as low rates and payment flexibility are offered by the respective service providers
# Younger users have seen a decline in interest in the credit ecosystem.
Conclusion
The purpose of this article is to provide an insight into the next generation of payment methods, and the payment technology has changed drastically this year compared to the previous year.
Consumers’ unmet needs and expectations of efficient services have led to the development of payment technology. Although it cannot be assumed that by 2030 the use of cash will not be completely done, significant change can be expected. Based on the above analysis, you can identify many new technologies in payment systems this year.
