The cashless payment method is growing exponentially with evolving payment methods, rising e-commerce use, enhanced broadband connectivity, and emergence of latest technologies. Can increasing incidences of cyberattacks and spams hamper the expansion of internet payment market or will it expanding at the rapid rate?
The international digital payment marketplace is anticipated to hit the USD6.6 trillion mark in 2021, registering around a 40% begin 2 yrs. The cashless payment methods are rapidly evolving with ground-breaking innovations like mobile wallets, peer-to-peer (P2P) mobile payments, real-time payments, and cryptocurrencies. Within the growing digital age, many payment technology organizations are collaborating with traditional financial institutions to focus on the most recent consumer and merchant preferences. On account of enhanced broadband connectivity, increasing mobile commerce, emergence of the latest technologies such as Virtual Reality, Artificial Intelligence, and rapid digitization, billions of everyone has started embracing contactless payments both in developed and emerging countries. Besides, surging e-commerce businesses, digital remittances, digital business payments, and mobile B2B payments are boosting the non-cash transaction ecosystem.
Cashless transaction method users across various generations are widely after the digital peer-to-peer (P2P) apps as they are more pleasing and flexible to work with. In-app payments or tap-and-go transactions take seconds at the checkout and permit users to create payments anytime and anywhere. Tokenization, encryption, Secure Sockets Layer (SSL), etc., offer multiple ways of securing payments while enabling digital transactions. Moreover, a persons do not have to complete information each time to accomplish the payment process. Thus, online payment gateways play a vital role in the economic growth, enabling trade-in the current economy. With social distancing rules set up, digital payments are becoming a duty for contactless transactions rather than just a transaction substitute for prevent the spread of coronavirus.
Digital Commerce Empowering Businesses
Electronic payment systems are getting to be a crucial part of businesses as consumer inclination towards online shopping is expanding. With broadening internet penetration, increasing usage of smartphones, and various selections for e-transactions, most individuals are preferring online channels over traditional brick-and-mortar stores for shopping. Therefore, corporations are shifting online with the electronic payment treatment for maximize their profit earnings. Automating the electronic payment system eliminates the scope of errors and saves a great deal of effort and time. High standards for detecting and preventing fraud in digital transaction systems and AI-based fraud detections protect users from security breaches. Through providing the flexibility to make payments through credit/debit cards, mobile money, e-Wallet, etc., nokia’s can expand their subscriber base. The electronic payment process improves customer care as customers don’t need to count cash or take care of paperwork if he or she need to make the transaction.
Biometric Authentication Enhancing Security
Biometric authentication involves recognizing biometric features and structural characteristics to make sure that the identification of an individual. The verification method can involve fingerprint scanning, facial recognition, voice recognition, vein mapping, iris detection, and heartbeat analysis. Using the surge in id theft and fraud, biometric authentication has developed into a reliable and secure alternative for making digital transactions. Based on a recent research, biometrically verified mobile commerce transactions are anticipated to constitute a huge 57% from the total biometric transaction by 2023. Biometric payment cards can also be becoming popular since they support tap-and-go payments, allowing users to create faster digital transactions. The digital payment technology provider, Worldline is partnering up with all the French FinTech, A3BC (Anything Anywhere Anytime Biometric Connection), to shield cell phones from intrusion using a two-factor authentication process. The combined solution eliminates identification by way of a single touch, rather it recognizes fingerprints by having a picture of the hand. MasterCard is intending to bring FinGo’s vein-scanning payment solution that facilitates users to authenticate transactions.
Dominance of Mobile Wallets
In 2019, mobile wallets overtook cards to get the highly adopted payment type globally. Digital wallets offer flexibility to users to save multiple payment methods in a digital home and turn cash into electronic money essential for online or in-store purchases. Banking institutions previously began to embrace a digital wallet trend by giving virtual cards to business customers. The virtual cards saved in digital wallets consist of details like 16-digit card number, CVV code, date of expiry and work similar to the physical thing. Currently, only 37% of merchants support mobile payments at the pos, but with the rising adoption, merchants are going to purchase technologies facilitating digital wallets. The virtual wallets can conserve money as a result of low processing costs as they limit transaction values and frequency. Artificial Intelligence (AI) is helping the buyer experience on the subject of transactions with ChatBots, made to execute and robotize essential exchanges as reported by the user’s interest. Besides, cryptographic money-based e-wallets are being embraced by new companies to small-medium organizations for storing digital money. Smart voice technologies are causing the development of smart voice wallets ever since Amazon propelled the leading of this platform, which can be now being accompanied by Google and Apple.
E-Commerce Boom Accelerating Digital Payment Market Growth
E-commerce growth in an exponential minute rates are creating shock waves, and also the sonic boom is reverberating through the FinTech sector. The development of numerous e-commerce companies is driven through the kind of financial services they offer. Digital transactions allow it to be convenient for your buyer and seller to produce transactions and turn into loyal to industry space. The COVID-19 pandemic added an alternative dimension to e-commerce innovation, introducing newer trends like payment alternatives at checkouts (avoid digital wallets), virtual cards, QR codes, along with other touchless transactions. Besides, the Buy Now Pay Later (BNPL) trend is dominating the e-commerce industry since it relieves the financial burden around the buyer. BNPL involves a soft appraisal of creditworthiness, and so the consumers can find what they already want, keep the inventory moving, and pay overtime without having affected their credit history. BNPL provides businesses with much-needed liquidity and greater flexibility at the checkout.
Influence of COVID-19 Pandemic on Digital Payment Market Growth
Digital payment systems have moved beyond their peer-to-peer (P2P) transfers and bill payments. The COVID-19 pandemic allowed digital payment systems to showcase their strengths, say for example a strong comprehension of hyper-local markets and its ability to establish strong local partnerships. Businesses and consumers increasingly “went digital” for providing and buying products or services online. In the event the pandemic hit, people didn’t want to touch or exchange cash due to paranoia of catching the infection from physical currencies. Several governments around the globe introduced digital financial gets in provide COVID-assistance. Owing to lockdown measures, consumers moved to online platforms, which catapulted the requirement for digital payment systems. Now, digital platforms have grown to be an essential component of people’s lives, and people are very likely to continue online shopping from the post-pandemic period. The dramatic transfer of consumer behavior probably will augment the requirement for e-payment systems even more. Therefore, information mill focusing their attention on digital mediums to meet the modern customer demands and thrive businesses in the changing market scenario. Organizations are reimagining customer journeys to lessen friction and provide new precautionary features. Payment companies such as PayPal and Square Cash are staffing up charges to higher view the rearrangement of societal norms and stabilize the business enterprise soon.
e-Payment Systems will be the Future
With increasing smartphone and internet penetration, consumers are becoming tech-savvy, which presents endless opportunities for your digital payment markets. Post-pandemic, digital payment systems are likely to continue to flourish over time to come. While cards remain the best for payments around the globe, mobile wallets are quickly gaining traction. The traditional cash flow is declining in bank branches and ATMs, demonstrating an electrical move towards a cashless society. Currently, China dominates the world mobile wallet consumption, accompanied by Columbia. However, you can still find many countries which can be highly dependent on cash as a result of deficiency of trust towards financial institutions and insufficient proper broadband infrastructure, etc. In the future, social media-initiated payments, biometric payments, voice-activated payments will likely become mainstream in developing countries at the same time.
Cybersecurity and Privacy Concerns with internet Payment Solutions
Cybersecurity and privacy threats are becoming a troubling concern about the increasing incidences of online fraud. Based on the Mastercard survey, one inch four consumers experienced some type of fraud in 2020, ramping the cybercrime rate by 49%. Within the first 1 / 2 of 2020, online scams increased by 73.8% from 2019. However, adopting new-age technologies for example multifactor authentication, biometrics, 3D security, Artificial Intelligence, and Machine Learning may help control fraudulent activities like phishing, virus attacks, etc. Shifting to contactless cards, QR codes, and tokenization will also help mitigate risks connected with digital payment solutions. Besides, sensitizing end-users regarding the secure use of e-payment solutions through amplifying efforts towards building financial literacy can help prevent frauds. The emergence of mobile commerce and the evolution of e-payment platforms backed by robust security solutions can help to drive the goal of making the economy truly cash-less.
According to TechSci research directory “Global Payment Gateway Market By Type (Hosted, Self-hosted & Bank Integrated), By Enterprise Size (SME and enormous Enterprise), By End-User (Retail, Travel & Hospitality, Healthcare, Education, Government, Utilities & Others), By Region, Competition, Forecast & Opportunities, 2026”, the international payment gateway marketplace is supposed to cross USD15 billion mark in 2019, registering a CAGR of 22% by 2026. The increase could be due to the increasing need for online transactions, rising broadband connectivity, and exponential increase of e-commerce across the world.
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