The year 2020 was a lesson for everyone. People have learned the importance of agility, creativity, and teeth-gritting determination. Many things have changed due to the pandemic, but there have also been many positive changes. There have been growths in online shopping, adoption of cross-channel experiences, new payment trends, etc.
Online sales growth has grown significantly from 19% of sales in January to 28% in October. Most people want to shop with retailers that use technology to improve customers’ shopping experience. One of the improvements technology has brought in payment.
During this Corona pandemic, the payment ecosystem has been one of the most technologically influential sectors. 2021 comes with many payment trends that will help in the world of business.
The Fusion Of Banks And Fintechs:
The banking system has a vast customer database, brand recognition and knows all about the market and financial industry. Despite all these, there is still something that traditional banking lacks. Traditional banks have failed to meet the rapidly increasing demand for a customer for customization and faster transactions. Due to conventional banks’ weak innovation culture, banks have made it hard to implement high-end technologies.
Now, FinTechs comes in. FinTechs and banks’ collaboration will ensure banks increase their return on investments. The relationship between banks and FinTechs has helped in achieving a digitally empowered future. Through FinTechs, customers can now serve themselves irrespective of where they are or their time. Therefore it has made the accessibility of financial services fast and straightforward. FinTechs has developed new strategies, loyalty programs, personalization, and operating models to meet customer demands. This trend has come in handy, especially during the Corona pandemic.
Introduction Of Cloud Technology In Payments:
One of the things that irritate people in business is late payments. It has been a challenge for a long time. Payment delays hinder the company from taking new projects hence making the business stagnant. It also makes it difficult for a business to meet its operating expenses which might result in losses. For sure, the businesses needed to find a solution and hence the introduction to cloud technology.
The cloud technology has a remote server that the internet hosts. These servers are responsible for storing and managing payment data. Cloud technology brings the benefits of flexibility, faster cash flow, security, and automation. Therefore it will help your business upgrade its payment system and eliminate challenges like late payments. Cloud technology in payments also helps in cost efficiency, feasibility, reliability, and high productivity.
Since cloud technology provides automation, you do not have to track invoices manually hence saving time. It also provides transparency in all transactions hence giving a sense of security. In terms of security, cloud technology provides encryption services to safeguard all customers’ financial data.
Implementation Of Real-Time Payments:
In the payment world, most people yearn for speed and security. These two aspects are essential when it comes to payments. In previous years, there have been challenges in providing speed and security to customers. Due to the customer’s high demand to have these two things, a solution had to be found. That is when there was the introduction of the new game-changer. Real-time payments have proved to be a fantastic trend in payments. Customers from all over the world have implemented and adorned it. Real-time payments have helped in providing speed, convenience, and security.
One of the principles of the Consumer Financial Protection Bureau is to provide faster payments. Therefore Real-time payments ensure it caters to this principle. It does so by making funds to the beneficiary of the transaction available immediately. It also provides transparency and certainty by providing real-time notifications for every transaction. The innovative payment solutions of RTP have the power to revamp the payment ecosystem.
The Governance Of The Cash Flow:
The payment ecosystem is evolving despite the pandemic. The pandemic has caused economic conditions to be uncertain. Dues to the constant change in economic conditions, it is essential for businesses to govern their cash flow. The only way to respond to these changes and adapt to them is by protecting consumers’ financial data and governing businesses’ cash flow.
This year, there is a new practice that involves reinforcing authenticated online buyers. It will be possible to recurring charges for automated commerce without repeating the authentication process for the user. The use of biometric features has also been implemented to ensure proper governance of cash flow. There will be biometric identification that involves fingerprints, iris scan, and facial recognition. These biometric identifications will serve as payment confirmations trends in 2021. By using biometric features, it would be faster and safer to complete payments. Efforts have been taken to merge the global industry standards like ISO 2022. It will help in governing payments messaging, interfaces, payment engines, and integration.
Provision Of Buy Now Pays Later Options:
The pandemic has caused a lot of harm to everyone worldwide. One of the sectors that have felt the full wrath of the pandemic is the employment sector. Many people have lost their jobs, and others have seen their salaries reduced immensely. Due to that, most people have had financial challenges. It has even been not easy to cater to some needs. Therefore the need for Buy Now Pay Later option has increased. Most people have adopted this option over time.
Millions of customers now avoid retailers who do not offer Buy Now Pay Later option. Offering the BNPL option brings more benefits than harm. When a retailer offers BNPL to customers, it will make them more loyal and increase basket conversions. Therefore a business will benefit from this trend when they implement it.
Replacement Of Sensitive Data By Network Tokens:
Sensitive data includes the primary account number or card number. Payment network tokens come to replace these during the payment process. The reason for replacing sensitive data with a network token is to reduce the cases of fraudulent activities. It is because the tokens replace the sensitive data in real-time and are used online in payment environments.
When consumers users these network tokens, it becomes easier for them to save their payment details securely. They can also securely share these details with merchants or on devices. It, therefore, allows payment experiences that involve one click or even no click. For example, a consumer can order a film using their smart TV through a streaming app.
The payment experience of network tokens also helps in improving payment authorization rates and conversions. The tokens also provide merchants with the latest payment details for their customers, reducing involuntary churn.
Replacement Of Sensitive Data By Network Tokens:
The pandemic has caused a lot of tension in the economy. People now need to observe social distancing hence reducing the number of intermediaries. As a result, cashless payments have skyrocketed. You will now find most people doing their transactions using eWallet, loyalty apps, or mobile payments. The lack of intermediaries has proved to benefit many businesses such as restaurants, cafes, service stations, gas stations, etc.
You should ensure that you partner with one of the leading fintech development companies to create your payment app. It will help you have direct contact with your customers. You will find that you will have easy communication and transactions with them. According to research, experts said that mobile payments would profit billions of shillings in this time of Corona pandemic. Businesses that find it hard to adopt mobile payments will have losses since mobile payments have dominated the present and the future. Mobile payments have been one of the most influential trends of payment in 2021.
Increase The Importance Of Machine Learning And Artificial Intelligence:
Many organizations are now striving to automate their operations with artificial intelligence and machine learning. In the past, organizations experimented with this, but the results were not as effective as they should have been. However, in 2021, the results were more positive. It brought organizations that tried its many benefits. It has helped the business to reduce their expenses that come with human resources. It has also helped organizations gather more valuable insights from the data they have collected. AI provides more accurate analysis and interpretation of data.
According to financial providers, the Ai investments will significantly increase as time goes by. The banking industry has gained a lot from artificial intelligence and machine learning. It has been able to provide its customer with better and faster services. One of the main reasons most businesses will implement this trend of payment is it detects and prevents payment fraud. It also helps in reducing customer service and compliance-related costs.
Development Of NFC And EMV:
Another exciting payment trend in 2021 is the introduction of NFC and EMV. They have both played a vital role in the payment sector. Near-field communication has become a popular means of payment because of its immense benefits. One of the main benefits it provides is giving enhanced security standards. It ensures safety in all that concerns payments. It also ensures ease of use, making transactions fast and easy.
EMV is another mode of payment that works under the same principle as NFC. It also comes with its benefits to users. It helps in making transactions more secure hence reducing the liability of merchant and payment processor. Many people are adopting this type of technology because it is less expensive.
Businesses need to keep up with the new technology to meet the demands of their customers. Therefore you should ensure you adapt to the above recent payment trends if you want your businesses to grow in 2021.