Search engine for touristic excursions to any place in the world The cashless payment system is growing exponentially with evolving payment methods, rising e-commerce use, enhanced broadband connectivity, and emergence of recent technologies. Can increasing incidences of cyberattacks and spams hamper the growth of online payment market or could it expanding at the rapid rate?
The international digital payment marketplace is likely to hit the USD6.6 trillion mark in 2021, registering around a 40% jump in a couple of years. The cashless payment methods are rapidly evolving with ground-breaking innovations such as mobile wallets, peer-to-peer (P2P) mobile payments, real-time payments, and cryptocurrencies. From the growing digital age, many payment technology information mill collaborating with traditional financial institutions to focus on the latest consumer and merchant preferences. Due to enhanced broadband connectivity, increasing mobile commerce, emergence of recent technologies like Virtual Reality, Artificial Intelligence, and rapid digitization, huge amounts of individuals have started embracing contactless payments in the 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 because they are more desirable and flexible to make use of. In-app payments or tap-and-go transactions take seconds in the checkout and permit users to produce payments anytime and anywhere. Tokenization, encryption, Secure Sockets Layer (SSL), etc., offer multiple ways of securing payments while enabling digital transactions. Moreover, a gamers don’t need to complete information each and every time to complete the payment process. Thus, online payment gateways play a crucial role in the economic growth, enabling trade in the modern economy. With social distancing rules available, digital payments are becoming a duty for contactless transactions rather than just a transaction replacement for avoid the spread of coronavirus.
Digital Commerce Empowering Businesses
Electronic payment systems have become a crucial part of businesses as consumer inclination towards online shopping is expanding. With broadening internet penetration, increasing use of smartphones, and diverse alternatives for e-transactions, most people are preferring online channels over traditional brick-and-mortar stores for shopping. Therefore, companies are shifting online having an electronic payment strategy to maximize their profit earnings. Automating the electronic payment system eliminates the scope of errors and saves plenty of commitment. High standards for detecting and preventing fraud in digital transaction systems and AI-based fraud detections protect users from security breaches. Through providing the flexibleness to create payments through credit/debit cards, mobile money, e-Wallet, etc., the lenders can expand their subscriber base. The electronic payment process improves customer satisfaction as customers don’t have to count cash or cope with paperwork every time they desire to make the transaction.
Biometric Authentication Enhancing Security
Biometric authentication involves recognizing biometric features and structural characteristics to verify the identification of an individual. The verification method can involve fingerprint scanning, facial recognition, voice recognition, vein mapping, iris detection, and heartbeat analysis. Together with the boost in id theft and fraud, biometric authentication has turned into a reliable and secure alternative in making digital transactions. As outlined by a newly released research, biometrically verified mobile commerce transactions are hoped for to constitute an enormous 57% from the total biometric transaction by 2023. Biometric payment cards may also be becoming popular as they support tap-and-go payments, allowing users to make faster digital transactions. A digital payment technology provider, Worldline is partnering up using the French FinTech, A3BC (Anything Anywhere Anytime Biometric Connection), to safeguard cellphones from intrusion with a two-factor authentication process. The combined solution eliminates identification by way of a single touch, rather it recognizes fingerprints by way of a picture with the hand. MasterCard is planning to bring FinGo’s vein-scanning payment solution that facilitates users to authenticate transactions.
Dominance of Mobile Wallets
In 2019, mobile wallets overtook cards for being the highly adopted payment type globally. Digital wallets offer flexibility to users to save multiple payment methods in a digital home and switch cash into electronic money essential for online or in-store purchases. Financial institutions have previously started to embrace a digital wallet trend by giving virtual cards to business customers. The virtual cards kept in digital wallets incorporate details like 16-digit card number, CVV code, date of expiry and work just as the physical thing. Currently, only 37% of merchants support mobile payments at the point of sale, however with ever rising adoption, merchants are willing to put money into technologies facilitating digital wallets. The virtual wallets can help to save money because of low processing costs as they limit transaction values and frequency. Artificial Intelligence (AI) is enhancing the user experience in terms of transactions with ChatBots, meant 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 technology is leading to the development of smart voice wallets since that time Amazon propelled the leading with this platform, which is now being then Google and Apple.
E-Commerce Boom Accelerating Digital Payment Market Growth
E-commerce growth at an exponential rates are creating shock waves, along with the sonic boom is reverberating across the FinTech sector. The growth of several e-commerce companies is driven through the kind of financial services they provide. Digital transactions allow it to be convenient for the seller and buyer to generate transactions and also be faithful to the market space. The COVID-19 pandemic added an alternative dimension to e-commerce innovation, introducing newer trends such as 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 for the buyer. BNPL involves a gentle credit check, hence the consumers can buy what they need, maintain your inventory moving, and pay overtime without affecting their credit standing. BNPL provides businesses with much-needed liquidity and greater flexibility on 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, such as a strong knowledge of hyper-local markets and how it can establish strong local partnerships. Businesses and consumers increasingly “went digital” for providing and acquiring goods and services online. When the pandemic hit, people would not wish to touch or exchange cash because of the paranoia of catching the problem from physical currencies. Several governments around the world introduced digital financial transfers to provide COVID-assistance. Because of lockdown measures, consumers moved to online platforms, which catapulted the requirement for digital payment systems. Now, digital platforms are getting to be an integral part of people’s lives, and individuals are prone to continue internet shopping inside the post-pandemic period. The dramatic shift in consumer behavior may well augment the need for e-payment systems even more. Therefore, companies are focusing their attention on digital mediums to meet the new customer demands and thrive businesses within the changing market scenario. Organizations are reimagining customer journeys to scale back friction and supply new security measures. Payment companies such as PayPal and Square Cash are staffing up across the board to improve view the rearrangement of societal norms and stabilize the business enterprise sooner.
e-Payment Systems are the Future
With increasing smartphone and internet penetration, consumers are becoming tech-savvy, which presents endless opportunities for the digital payment markets. Post-pandemic, digital payment systems are expected to carry on and flourish over the years into the future. While cards remain the first choice for payments worldwide, mobile wallets are quickly gaining traction. The traditional cashflow is declining in bank branches and ATMs, demonstrating a power move towards a cashless society. Currently, China dominates the global mobile wallet consumption, then Mexico. However, it is possible to many countries which can be highly dependent on cash because of lack of trust towards banking institutions and insufficient proper broadband infrastructure, etc. In the near future, social media-initiated payments, biometric payments, voice-activated payments will certainly become mainstream in developing countries also.
Cybersecurity and Privacy Concerns with Online Payment Solutions
Cybersecurity and privacy threats are becoming a troubling concern about the increasing incidences of online fraud. Based on the Mastercard survey, one in four consumers experienced some sort of fraud in 2020, ramping up the cybercrime rate by 49%. From 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 for example phishing, virus attacks, etc. Shifting to contactless cards, QR codes, and tokenization may also help mitigate risks associated with digital payment solutions. Besides, sensitizing end-users about the secure putting on e-payment solutions through amplifying efforts towards building financial literacy may help prevent frauds. The emergence of mobile commerce along with the evolution of e-payment platforms backed by robust security solutions can help to drive the objective of making the economy truly cash-less.
In accordance with TechSci research report on “Global Payment Gateway Market By Type (Hosted, Self-hosted & Bank Integrated), By Enterprise Size (SME and Large Enterprise), By End-User (Retail, Travel & Hospitality, Healthcare, Education, Government, Utilities & Others), By Region, Competition, Forecast & Opportunities, 2026”, the worldwide payment gateway market is likely to cross USD15 billion mark in 2019, registering a CAGR of 22% by 2026. The growth might be related to the growing requirement for online transactions, rising broadband connectivity, and exponential expansion of e-commerce around the world.
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