From being valued at $5.4trn in 2020, the global digital payments industry is expected to hit $6.6 trillion in value in 2021, according to Finaria. Before COVID-19, the industry grew at a 16% YOY increase, and post-pandemic, the pace expedited to over 22%. In the next four years, the digital payments market is set to hit $10.5trn in value. Eventually, the fast-paced growth will aid in understanding consumer behavior and tech advancements in a better way. However, currently, various trends are set forth for the development of digital payments.
Innovative Payment Methods
In every possible way, the world is trying to adopt as flexible payments as it can. Contactless payments are one among them.
According to the National Retail Federation, 67% of the US retailers accept contactless payments. On the other hand, in Europe, 75% of in-store payments have become contactless, Visa reports say. In March 2020, UAE recorded 100% growth in contactless payments than last year, according to Masterclass. Companies like Apple, Samsung, and Google have their own contactless payments.
While there are advancements in the digital payments sector, it is parallelly important to focus on security. The internet is prone to cyberattacks and fraudulent activities.
The payment service providers are significantly focusing on developing safe and secured platforms for users. The adoption of blockchain technology, Artificial Intelligence (AI), and Machine Learning (ML) are taking the lead. According to TCS, 44% of the companies are already using these technologies to detect and prevent cyber threats.
The CA called the Customer Authentication process is also becoming important by adding a different layer of security to payments. Facial recognition, biometric and voice-enabled payments are the primary factors to ensure a robust CA process.
Gone are the days where there was a distinction between financial service providers and merchants. The checkout process was quite different. Now that we have integrated payments on each platform, customers can pursue seamless transactions. Hence, the checkout process is easy and instant without any additional steps.
Merchants can easily activate PIS (Payment Initiation Services) on their platforms. As a result, they can directly interact with their customer’s bank via open API and execute transactions with prior consent.
Discovering B2B Payments
B2B payments play a crucial role, and thus it is the space that needs to be redefined. Hence there is the need to focus on the personalization, customization, and speed in B2B payments.
B2B payments are growing, and we could expect a huge contribution to the fintech space. Sooner or later, we can expect integrated payments to B2B tech platforms that contribute a chunk of B2B transactions every year. The integrated payments will connect them to payment facilitators and take a revenue cut from the transaction cost.
The P2P Payments
Ever since the hit of the pandemic, millennials to older generations have adopted digital payments. Platforms such as PayPal, Razorpay are widely being used with a more significant number of transactions every day.
A few platforms are already providing various other services in addition to digital payments. The offerings include investments, trading, cryptocurrency transactions, and other debit and credit card-based offers. These are not just expanding the services but also increasing the revenue for each of these businesses.
The digital payments industry is seeing a constant uptrend with vast opportunities open to individuals and businesses. There are innovative ideas, advanced technologies, robust securities, and increased revenue opportunities available to companies.