From a primitive lifestyle to the modern way of living, we have undergone several changes in digital payment methods. Business, economics, money, and the payments-everything went to the renovations or maybe innovations. Today state of the art in payments is irresistible.
The present digital payment system is backed by cutting-edge technology that is undergoing everyday innovations.
Here we go, let’s dive into the groundbreaking modern digital payments.
Biometric authentication is one of the verification methods where it uses biological and structural characteristics. Like fingerprinting scanners, facial recognition, iris recognition, heartbeat analysis, and vein mapping, This is emerging technology, and of course, we will witness a significant expansion of the same this year.
Biometric authentication tops the list as it can prevent data from theft and any fraudulent activities. It is the most reliable and secure verification method. Biometric authentication is accurate, efficient, and instant. It involves the unique characteristics of an individual. This verification process will also build customer confidence, trust, and loyalty.
According to Biometric Update, approximately 2.5 million payment cards could be issued in 2021.
Gen Z to Tech-Savvy
To those who are not sure what does, Gen Z means: Gen Z or Generation Z is a term used for individuals born in the mid-to-late 1990s till the early 2010s. So these individuals belong to the generation of the digital world.
Recently Forbes stated that Gen Z would make up to 31% (approx.) of 2021’s global population. This shift conveys that the majority of the world’s population will become tech-savvy by 2021. This will be a fantastic change in the way they get to use the digital payment systems. As a result, digital payment systems will see a greater demand in the coming years.
Earlier bank accounts were using some random combinations of unique digits present on the card. Now that we have the EMV technology (Europay, Mastercard, Visa) improved the payment methods. The computerized and secured payment systems use codes that vary every time a user makes a payment. These are the temporary codes that are integrated to enhance security and protect the customer’s accounts.
However, we might see more convenient and seamless payment methods to transfer money rather than card transactions.
Increase in mPOS Technology
Mobile-point-of-sale (mPOS) is an innovative technology that made all the merchants free from the traditional payment methods. This revolutionary technology enables merchants to visit numerous places such as expos, food trucks, conferences, etc., and accept payments from their customers.
The mPOS technology is more streamlined and flexible. It eliminated the central checkout systems. Thus the staff can be equipped with mPOS devices to accept instant digital payments.
According to Global Market Insights, mPOS is expected to grow at a CAGR of around 19% between 2020 to 2026.
Smart Speaker Payments
We have new home assistants and smart speakers that help us based on our voice commands. When a user seeks anything in a voice command to a speaker, the smart speakers also respond in voice. For instance, users can ask their google assistant to schedule a meeting or set up an alarm or ask to book a cab from Uber; it does! So by just listening to an individual’s voice command, the smart assistants make the job simple.
Top companies like Amazon, Google, Apple joined in producing the smart speakers. However, initially, these smart assistants were restricted to our phone devices. Now that we can see, decent smart speakers are coming into the picture to use at home.
Well, as per Statista, 82% used voice assistants to seek information such as news, weather report, recipes, etc.; 67% used to play music or stream videos; while 35% of users used smart speakers to buy products, purchase home care, groceries, and clothing. Interestingly around 28% of the users used smart speakers to make payments or send money.
While most users prefer not to use smart assistants due to security concerns, Business Insider estimated that the percentage is expected to snowball from 18.4 million users in 2017 to 77.9 million users by 2022. That’s quite an exciting number!
Thus, the future for smart speakers looks promising as the giants like Amazon, Google, Apple are investing heavily in them.
Advanced AI and Machine Learning Bots
Banks and users’ first preference would be security. Any payment system that has an advanced or higher security system will definitely stand out among the others.
The usage of Artificial Intelligence and Machine Learning software is growing due to its high-security feature. Banks continuously feed their ML software with several transactions. Thus, making it possible to detect fraudulent transactions in real-time. The more the ML software analyses the transactions, the more it gets better at detecting frauds.
For instance, you will receive a message from banks stating your transaction with a cautionary note added to it whenever you conduct a transaction. Bots send these texts. As a result, they are making it easy and simple for users and banks to keep an eye on the transactions.
NFC (near-field communication) technology runs contactless payments. NFC is most popular in China, London, Japan. The UK predicts that around 36% of total digital payments are expected through NFC-powered contactless by 2027.
While the world is all hit by the pandemic, contactless payments waived off all the concerns related to in-store payments or physical payments. As the name suggests, contactless payments mean users can wave their smartphone in front of a scan code to make digital payments. This is more convenient and faster than a card payment.
Contactless payments are verified and secured using PIN technology. These payment methods are encrypted and safe. Samsung Pay, Apple Pay, and Google Pay are already the top applications available for users.
Above all, these applications are simple to use – users can download the app, add the bank account or card details and start conducting digital payments using their smartphone.
According to RetailDive’s report, around 2.1 billion consumers are using mobile wallets to make payments or transfer money in 2019, and it is expected to grow huge!
These mobile wallets are a quick replacement for physical wallets. They help you carry money, send, and receive money from anywhere in the world. Users can also pay bills, buy tickets, get rewards, do recharges, etc.
In the coming years, we will see various mobile wallets with improved features and high security. For instance, the USA will have PayCircle launched to custody, send and receive multi-currency, Fiat, and digital assets worldwide. Interestingly it is backed up with advanced blockchain technology and uses cutting-edge distributed ledger technology. I addition, this app facilitates and simplifies cross-border payments with enhanced visibility and zero payment failure.
To sum it up, digital payments are expected to grow and make each individual forget the traditional physical cash payments. Undoubtedly, digital payments and new technologies will revolutionize the payment methods with more security and smart safety features.