The trend towards digital payments will continue to grow in 2021. We’ll witness more and more people transitioning from physical cash to mobile wallets. But, before the transition concludes, many technologies will come into play and disappear.
Money and the world of payments have gone through many changes since the stone age. From barter systems to contactless payments, society has evolved into a very mature stage, where Payment Technology have overtaken conventional mode of payments.
Many people recall times when they ran cashless for a week or maybe longer. The digital payment infrastructure is ready to shine, and customers across the world are increasingly adopting the new modes of payment.
Although digital payments have been here for a long time. Paypal, one of the largest digital payments companies today, started all the way back in 2004. Now Paypal is the limelight for business to business payments. But the implementation of payment technology into customer to business services and peer to peer paymentsservices have only been possible with the advent of technologies like 4G, 5G, Blockchain, AI & ML, and RegTech.
In the span of five to six years, digital payment technologies have seen massive developments in terms of financial inclusion, and we’re expecting to see more innovation in the coming years.
Banks and Non-Banks need to switch to Digital TransformationAs per a report by EY, 50% of consumers are already using FinTech applications for money transfers and payments, whereas 65% are optimistic that they will be doing so in the future.
The significant disruptors of the payment landscape are the non-banking financial institutions that operate via unconventional means. The distinguishing line between payment networks and banks will continue to blur.
To keep up with the increasing trend of cashless payments, banks and non-banks will have to act quick. Offering tech-agnostic value-added financial products and services will be the way forward to achieve digital transformation.
It is interesting to understand where the payment technology trend is heading towards and what 2021 has in store for us in such exciting times. This article will take you through all that you should know about payment technology in 2021.
What Is A Payment Technology?Payment technology is the driving force behind the digitization of payments. There are several payment technologies such as Blockchain, QR codes, NFC, Biometric and many others that are currently disrupting the conventional payment ecosystem.
However, not every available payment technology is worth investing in. There are several parameters that affect the feasibility of payment technology implementation and the ROI (Return on Investment) that it can bring. For example, the QR code technology has made contactless payments a feasible solution over NFC or RFID.
Biometric authentication has been in the limelight for the past couple of years. Security has become a prime concern for banking institutions due to strict compliances by regulatory bodies. It has made multi-factor authentication a necessity for mobile walletand payment service providers. The availability of a fingerprint sensor or iris recognition in almost all the smartphones and tablets, have made biometric a feasible option for multi-factor authentication.
Biometric authentication is a verification method involving structural or biological characteristics of an individual. The verification methods range between facial recognition, fingerprint scanners, heartbeat analysis, iris recognition, and vein mapping.
This payment technology helps FinTech service providers prevent chances of identity theft and fraud. Biometric authentication is a unique and crucial step in the online payment process, as it ensures efficiency, security, and improves customer satisfaction. The ease of authentication and high-security help financial institutions build customer trust and loyalty.
#2 mPOSMobile-Point-of-Sale, aka mPOS, is an innovative payment technology that is focused on freeing merchants from their store location and going mobile. It liberates merchants to seamlessly accept payments at various places like trade shows, concerts, food trucks, and many other places.
Not only this, but the mPOS payment technology also streamlines the checkout process at the stores by replacing central checkout areas with staff equipped, with instead mobile-point-of-sale devices.
Indeed, mPOS technology will be a popular trend in 2021, and the statistics show the same. Global Market Insights reports that by 2026, the mPOS market will be valued at $80 billion globally. It is expected to grow with a CAGR of 19% between 2019 to 2026.
Source: Global Market Insights
#3 VoiceWith the rise of smart speakers and home assistants, voice commands have become mainstream in the tech space. The banking and finance industry isn’t untouched from voice tech, and in the near future, we’ll see more and more people handling their finances via smart assistants.
Many financial giants are heavily investing in voice tech for payments, as statistics reveal that there is an increase in the number of people that are buying products via smart speakers. Statista found 35% of users purchase products like groceries, home care, and clothing using smart speakers.
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