Introduction
It’s an understatement to say that the payments business has advanced phenomenally in recent years. Digital transformation has disrupted using cash, cheques and other physical instruments. Simply put, these fintech solutions have made current payment methods primitive. The changes through digital payments by fintech solutions have significantly eroded the need to carry physical cash.
The Covid-19 digital push has made contactless payments the dominant mode for e-commerce and point-of-sale (POS).
To understand the future of digital payment worldwide, here are a few trends likely to shape the payment terrain this year.
Digital Payments- an Overview
Digital payments use electronic or online platforms to transfer money or make transactions. With the widespread use of mobile devices and the internet, digital payments have become increasingly popular as a convenient and efficient alternative to traditional payment methods such as cash or checks.
There are several types of digital payments, including:
- 1. Online payments include transactions made through e-commerce sites, where customers use credit or debit cards to purchase goods and services online.
- 2. Mobile payments include transactions made using mobile devices, such as smartphones or tablets. Payments with wallet apps, such as Apple Pay or Google Wallet, allow users to store their credit or debit card information on their mobile devices and make payments by tapping their device at a point of sale.
- 3. Peer-to-peer payments include individual transactions, such as sending money to a friend or family member. Peer-to-peer payment apps like Venmo, PayPal, or Zelle allow users to send and receive payments quickly.
Digital Payments Trends and Predictions for 2023
Typically Digital Payments are faster, more secure, and more convenient by providing greater transparency and visibility into their transactions. With this, let’s learn about how digital payments are going to disrupt their way in 2023:
Contactless payments using NFC Technology
Contactless payments, which use near-field communication (NFC) technology, have become popular in recent years due to their convenience and ease of use. Thanks to advancements in contactless payments technology, consumers can now pay for their online purchases by just tapping their credit card on their NFC-enabled personal smartphones or tablets.
There is no longer a need to manually enter credit card information on retailer websites or save personal card information online. In 2023, contactless payments will become even more mainstream as more businesses adopt the technology and consumers become increasingly comfortable with it.
The growing popularity of SoftPOS Technology
Heard about the “Tap to Pay” option? This technology is called SoftPOS, i.e., Software-based Payment Solutions.
The popularity of this technology enables retailers to take contactless payments using a commonly available smartphone or tablet without the need for additional hardware, which will continue to increase globally.
SoftPOS technology makes it possible to accept contactless payments for deliveries, sell and confirm tickets on trains, and split bills when buying in restaurants. It also allows merchants to integrate with pre-existing banking/payment solutions seamlessly.
Mobile Wallets
Mobile wallet app development, such as Apple Pay and Google Pay, has also gained popularity as more people use their smartphones for everyday tasks. NFC technology is used in various sectors such as healthcare, retail, education and business. It also enables peer-to-peer transactions by tapping their phones together, allowing for fast and easy mobile payments between friends and family. This year, we can expect mobile wallets to continue growing, with more features and functionalities added to make them even more valuable and versatile.
Buy Now, Pay Later
Buy Now, Pay Later (BNPL) is a rapidly growing trend in the world of commerce, and this trend will likely continue to expand in both the B2B and B2C spaces. As e-commerce grows, BNPL will likely become more integrated with online shopping platforms. This could include making BNPL payments directly from an e-commerce site or integrating BNPL with online marketplaces like Amazon. While BNPL has mainly been associated with consumer purchases, more businesses will likely adopt these payment options. In the B2B space, BNPL can help facilitate large transactions and provide greater flexibility for cash flow management. As BNPL providers expand their offerings to meet the needs of B2B customers, we expect to see more businesses take advantage of these payment options.
Biometric Authentication
Biometric authentication, such as facial recognition or fingerprint scanning, is becoming more common in digital payments as a way to increase security and reduce fraud. In 2023, biometric authentication will become even more prevalent as more businesses adopt the technology and consumers become more comfortable with it.
Cross-Border Payments
With the increasing globalization of businesses, cross-border payments have become more important. In 2023, we expect improvements in cross-border payment systems, with faster and cheaper transactions becoming more common. Many companies have already launched the option of real-time cross-border payments.
Earlier this month, an Indian startup, PhonePe specializing in financial technology and digital payments, introduced cross-border UPI payment functionality. Users of the apps can make purchases at merchant locations in the UAE, Singapore, Mauritius, Nepal, and Bhutan using their Indian bank accounts.
Demand for Sustainable Payment Systems
In recent years, there has been a growing demand for sustainable payment systems that minimize their impact on the environment and promote ethical business practices. This trend is likely to continue in the future as consumers become more conscious of the environmental and social implications of their purchasing decisions. Payment providers that prioritize sustainability and transparency and focus on reducing carbon emissions may be better positioned to attract and retain customers in the future. Payment systems with features such as paperless receipts, digital-only payment options, and the ability to donate a portion of transactions to environmental or social causes will become more common.
The Future
While markets continue to make us anxious, 2023 is shaping up to be another fascinating year for technology, and it’s almost certainly our greatest bet for getting to the next phase of economic growth.
Digital Transformation has revolutionized the payment sector. With the entry of fintech solutions, digital payments have rapidly changed how people conduct transactions and manage their finances. Fintech solutions have been driving financial inclusion in developing economies around the world.
With such integration of digital payments in most global economies, new possibilities such as real-time B2B payments and cross border payments are emerging soon. The introduction of NFC technology, mobile app development, and wallet apps in different sectors of society will redefine a person’s everyday life.
Looking ahead, it’s likely that digital payments will continue to grow and evolve, with new technologies and innovations changing the landscape in significant ways. However, there will also be increased emphasis on security and fraud prevention, with more businesses adopting advanced technologies to protect themselves and their customers. The focus areas should be implemented, such as the improved authentication process, innovating the checkout process, and providing value-added services in wallet apps (payments along with a messaging platform).
Therefore, to improve the customer experience, regulatory bodies and fintech companies must step up to combat fraud and for a smooth transition to new emerging incumbents.
The post Exploring the Future of Digital Payments: Trends and Predictions for 2023 and Beyond appeared first on Lets Nurture - An IT Company Nurturing Ideas into Reality.
