The rise of smartphones has enabled the rise of digital payments, which have been amplified during the pandemic. There is, however, still a lot of work left to be done in developing the payment ecosystem. An entrepreneur and innovation expert from Costa Rica, Jorge Zuñiga Blanco, explains the trends that will be the biggest contributors to digital payments in the future.
As a result of technological innovations made by traditional banks and the emergence of FinTech companies and new payment service providers, the financial services industry is undergoing a paradigm shift. This is being driven by innovation made by traditional banks as well as the introduction of services that provide technology-based solutions to meet the financial needs of customers.
Although cash remains the preferred method of payment during this pandemic, electronic payments have increased rapidly as well. As it makes life easier for users in the future by providing them with the option of paying without friction at any time and place, along with tracking their spending patterns, it promises to continue to develop in the future as well.
Companies, SMEs and organizations can take advantage of this in order to reduce their costs and become more competitive in the marketplace, in addition to having the opportunity to lead agile management and automation.
Using mobile payments to send money, to pay in physical stores, and to shop online in 2021 is, without a doubt, a growing trend, according to Zuñiga. As a result, it has also inspired the combination of wallets and QR codes, which are now a popular choice due to the ease of use and the power that they provide.
As for contactless payments, they are on the verge of becoming a thing of the past. In fact, contactless payments are a form of payment in which you can pay just by bringing the card into the market. You can use this method of payment with a few simple touches, whether you are using a credit card, a debit card, or even your smartphone.
In addition to being implemented in travel systems, hotels, and in business in general, they are also being implemented in the travel industry. In the US, for example, nine out of ten businesses will be contactless in 2021, proving that there is a real thing, at least in the first world.
By implementing intelligence into the online business world, customers can provide information to the business through chatbots. In addition, customers can provide business instructions and applications to the business.
Similarly, Google has also been developing a variety of such solutions for a considerable time. However, it is important to note that it is still premature in terms of its general implementation.
There is no longer any need to use an iPad to make purchases using QR codes. FinTechs and a study of a dozen virtual wallet apps in the region have helped make QR code adoption easier, presenting them as a useful, powerful and easy way to make purchases.
According to Zuñiga, “In the case of an epidemic, it is also particularly beneficial to discourage physical contact between people, since most Latin American respondents expect to use modern payment technologies such as QR codes this year, according to a survey performed by Mastercard last year.”
In the next decade, there will be an increase in change in the environment, driven by biometric technology, artificial intelligence, virtual reality and blockchain. All of this will play a significant role in supporting the development of new payment methods.
With these invisible payments, consumers will be able to make purchases without cash, a credit card or any other device, and with just their fingerprint, face or voice. As a result of the integrated financial market, businesses of all sizes will be able to offer banking services and products through their digital channels, regardless of whether they are financial institutions or not. This will bring about a significant change in business.
There will be an increase in the number of services that can be provided to the user in this line of business, especially if solutions like buy now, pay later (BNPL), which allows dividing purchases into several units, are adopted. It is also expected that large technology companies, such as Google, Facebook, Apple, Amazon, Alibaba and others, will play an important role in the reorganization of the payment ecosystem.
By adding new players to its payment system (which hasn’t yet reached its capacity) and creating new solutions through the use of technology, the financial industry has a great chance to grow its payment system in the future.