The financial domain has now entirely become digital. The primary sector that sees growth here is payments. People can now select from distinct payment options born out of industrial trends like mobile payment, e-wallet, distributed ledgers, and open banking.
What is the future trend in payment? Keep reading this article to have an in-depth insight into the payment trends that will stay on the top and bring new heights to the industry.
Why Is Global Payment Getting Popular?
The majority of the users never think about the payment service providers as they always work in the backend. However, these service providers give vital connections to bring global chains together. They connect businesspersons to a broader finance network that allows them to accept debit or credit card payments or giving them other means to pay for commodities swiftly and effectively.
A payment service provider is a bridge that connects consumers, merchants, networks that provides payment and financial institutes.
These services providers handle all the transactions and make sure payment is sent and received quickly. They also provide additional financial services like fraud detection, security, and payment regulation.
Payment services are now integrated into different services to provide a better and user-friendly experience.
Future of Payment
Truly Global Payments
There is a tremendous increase in revenue from the global payment, and Asia is the star player behind its growth. This growth is present in each area of payment, so it is a worldwide phenomenon.
But there is a reduction predicted in the global prominence due to the expected slowdown in the macroeconomy. Still, the developing countries will provide a 5% growth in revenue per year.
Machine Learning and AI
Cutting-edge technologies like AI and machine learning make maximum use of the data, which is by far the most valuable asset of the companies. Till now, the financial sector used this data for process automation and fraud detection. But they are now prepared to take the next step by embedding this into the payments.
This data will define the future of payment with AI and tools rooted in it. Companies could predict customers’ future activity by analyzing customer spending habits and operational history. They can also propose different payment methods like reduce fess or a frequently chosen form of payment. This AI system will also be capable to assist in payment activities as well.
Machine learning and AI brought immense value to customer service all cheers to data. The companies now personalize the experience and influence the lower line. They use ML and AI to modernize the internal process and make corresponding changes in the payment sector.
Wells Fargo use AI implanted smartphone app and analytics-based banking to help customers improve their finances. The app holders recurrent bill and send alerts to users to save money as best as it can.
Future Use of ML and AI
- The voice-based transaction still demands smart verification and biometric security. This is surely an area of development as the technology allows an easy and swift user experience.
- RegTech is an area where AI might play a huge role. Regulatory norms are regularly changing. AI can here recognize the key pointers to assist companies to operate in proper law and order.
Seamless Payments
Numerous loan providers still demand customers to file paperwork and complete loan paperwork before they buy something. This fence to entry will lead customers to drop away as they are now used to a more simple and straightforward approach.
Simplicity and speed in the process of payment will be the priority for the suppliers in the days ahead. Companies with the help of top-notch technologies will rationalize this process.
Uber is one of the payment systems with their unified customer experience that abolishes resistance in the checkout. The famous Neobank of the US, Chime also removed the ancient banking process to provide a swift banking experience from its mobile application and web.
Future in Seamless Payments
- Multichannel delivery and service integration would become novel standards in the future. It would motivate businesses to invest in analytics and data to study customer behavior and make recommendations and give solutions accordingly.
- With technologies like open banking, IoT, omnichannel platforms, brands will attempt to provide a unified user experience to stay and finish the process.
Additional Integrations
In the majority of instances, buyers want to complete their tasks easily and always look for the most straightforward payment path. The idea here is to add the simplest payment path in the app and web.
For instance, smart car come with a combined payment system that helps users effortlessly pay for drivers, gas, or parking. The users just need to sit back and relax – all the process is done automatically.
These integrated devices can interconnect with each other; hence the companies are planning to shift to IoT as the prime technology. For instance, users can now transfer money with WhatsApp messenger.
Future of Integration
- The companies will give you many choices of financial transactions by integrating additional payment solutions.
- These integrations include virtual payments, mobile app, interactive voice detectors, credit/debit cards, etc.
- Future looks like a complex bionetwork, the clue here is to give payment options when the customer demands it.
Data the Most Valued Asset
Data was always been an integral part of financial decision-making. But in recent times, data has become the backbone of payment solutions. Companies can assimilate data with different systems to:
- Study the spending pattern and shopping behavior of customers.
- Provide accurate references.
- Personalize user experience.
- Provide a satisfying experience.
Cross-selling, upselling and personalized offers are influential strategies banks are using in the payment area.
Future of Data
- Banks will use the data to analyze customer habits to recommend products like insurance after they buy a new vehicle. All this data can be collected from social media comments to payment history.
- Companies can understand user profiles and calculate loan repayment risk.
Mobile Commerce
It is found that people spend more than 4 hours on their mobile phones daily, on average. This figure is guaranteed to raise in the future. Mobile payment is the trend growing with this mobile usage growth.
Social media have now started to embedded the buy now button to enable direct purchase from their platform. Merchants also provide quick checkout for a smooth shopping experience.
Banks are planning to include various mobile payment options to attract Millennials.
Future of Mobile Commerce
- The future of mobile payment is not just going to be about doing financial transactions via smartphones. Customers could make use of tons of features like financial wellness money management that are going to add to the mobile payment experience.
- Removal of credit cards and replacing them with mobile wallets would become more popular.
- Digital banks will gain more popularity.
Entry of Tech Giants
Each of the tech giants has their individual payment system like google, apple, or amazon this is the reason they are bound to add a significant impact in the future of the payment industry.
Google now allows both online and offline payment to keep up with the latest customer payment habits and provide a special button for a speedy transaction. They use touch taboo payments for speedy checkouts. Amazon is also working to introduce Alexa capabilities into voice-based shopping.
Future With Tech Giants
- Tech giants will perform the part of financial companies with their advanced technologies that provide speedy and continuous processes.
- To fight back in the market banks will have to provide customer-centric methods and keep involving with the trends.
Global Transactions
In ancient times global transactions were costly and time-consuming. These transactions were government regulated and always took a greater period. With the availability of technology, companies are planning the future of global transactions and finding quicker ways to route the payment options.
The biggest and most secure technology available now is blockchain. Blockchain the technology behind cryptocurrency and DeFi.is a form of a secured and shared ledger that can provide transparent and quick financial transactions.
The immutable nature of blockchain will play a leading role in the payment industry. It is the best applicant for global cashless currency. Even the social media giant like Facebook is planning to create its digital currency.
Goldman Sachs implemented blockchain to enhance its security and make the global transaction faster. Many banks like HSBC and Barclays have started adopting blockchain to allow global transactions faster. Over 500 financial companies around the world are now using fully efficient blockchain systems.
Future of Global Transaction
- Many countries are planning to create a cryptocurrency with the support of the government.
- Companies will invest more to give a pathway to seamless global transactions.
- Banks will use APIs to make real-time functioning faster. Customers will get paid instantly even from the international transfer.
Collaboration
Competition is common in the market, but companies will go beyond the in-house technologies to collaborate with fintech ventures to get a seamless payment solution.
Amazon collaborated with kohi to boost efficiency. Google’s parent company Alphabet comprises many different ventures and includes various collaborations as well. A few of the recent acquisitions and mergers include First Data & Fiserv, Plaid & Visa, IZettle, and Paypal.
Future of Collaboration
- Various financial institutes and banks will collaborate and cutting-edge technologies to provide broader services.
- With the surge in the use of general charges, cloud computing, and mobile phones. The payment industry will encourage partnership and collaboration is surely the future of the payment industry.
Disposal of the Legacy System
Lag in innovation will be very risky for companies’ survival in the market. But the future is not just about being able to stand still in the competitive market. Many firms fail to understand the need to stay in the top trends of payment needs.
The solutions that do not meet the latest standards are dangerous. You might fail to retain the existing client and charm new ones. Banks that are rigid in using the traditional technologies will pay a price in the future.
This Is the Future
In the coming years, non-banking companies will transform user experience and payment structure but also the entire service in a bigger manner. The industry has been observing the entry of various tech giants and start-ups that will give cut-throat competition to banks.
Fintech start-ups are changing the banking industry by integrating the trends and giving promising services and user experiences. To stay in the race companies will have to adopt the changes and come up with new working models, solutions, and capabilities.
Global payment and its impact can be prolific for the new players. Till now, banks have not completely adopted modern payment trends. They still rely on old backend process and system tangled for operation. This is the reason global transfer is still costly and time-consuming. Non-bankers are now focusing on these areas and motivating banks to reconsider these zones.
[To share your insights with us, please write to sghosh@martechseries.com]
