It seems like a long time ago that the expression “cash is king” meant nothing to many people. Digital payments have now so much become the norm that some are even predicting that the cash may soon become obsolete. This means that the changes in the payments landscape, already well advanced, are set to accelerate, driven by technology and its never-ending advancements. And it’s not just for specific sectors. The changes are universal, affecting both businesses and individuals alike. It’s generally agreed that four key areas are driving forward the new technologies, and these are:
Real-Time Payments
One of the major criticisms of traditional payment methods has been the speed, or lack of it, of transactions going through. Faster payments are good for everyone, especially for certain sectors like iGaming. Players on sites want to pay their stake money and receive any winnings without delay – new casinos are investigated by Casino.org constantly and when they are reviewed, the speed of payment is one of the deciding factors in a poor or strong rating. Players at online casinos are often wanting to make multiple deposits and withdrawals within the same week so the speed at which they are processed is vital. The new tech behind real-time payments has the additional benefit of offering both parties the ability to use an alias to identify them, such as an email address or even their phone number.
Cross border payments
In an increasingly globalized world, more and more payments are being made across borders. However, this gives rise to several potential pain points. The first is speed, with money taking many business days to reach its destination. Then there’s the question of how the exchange rate fluctuates during this period. If it does, either the payer or the payee may find themselves feeling short-changed. Finally, there are the high fees and other charges that can be levied.
Buy now, pay later
In an increasingly challenging retail environment, more and more is being done to convert online browsers into actual customers. One method that is increasingly in use is the BNPL model. This involves splitting purchases into a series of smaller installments. What first began as a tactic for fashion brands has now expanded to include B2B transactions as well as services ranging from healthcare to legal advice. Contained within any BNPL offer is a credit decision that needs to be made virtually on the spot. So, the technology, often assisted by AI, is advancing at a fast rate to automate acceptance or refusal.
Digital wallets
The profusion of digital wallets has made great strides forward in helping to eliminate or reduce payment transaction fees for many people. However, there’s a feeling that they still have a very long way to go if they are to become genuine, full-service alternatives to making bank payments. For them to make this great leap forward they will surely need to become directly capable of carrying out contactless payments and running their loyalty schemes for users. Work is already underway to create super apps that can offer all this and more, so they’ll surely be with us soon.
There’s a triumvirate of technologies that are set to achieve many of the objectives outlined above. The first of these is the much-vaunted field of cryptocurrencies, with Bitcoin leading the way by a considerable distance. Although these are yet to gain any true momentum beyond being an investment vehicle, it’s believed that their time will come. Their decentralized nature, alongside the security and anonymity of transactions, are strong enough arguments for their increasing use. Add to this the speed of a cryptocurrency transaction and the fact that there is no cross-currency conversion needed and their role becomes obvious.
This naturally leads us to the power behind crypto, the blockchain. Of the many features it includes the increase in transparency and security in transactions are key. Add this to the speed it offers and it’s easy to see why many of the major banks are actively starting to incorporate it into their transaction methods.
Finally, there is Artificial Intelligence. It’s this that many regard as being the single most important technology that will transform payments. It is set to streamline the process in a number of ways including being able to predict consumer behavior, quickly identify fraudulent or other illegal activity, and automate many of the tasks that currently need human intervention.
Taken together, these three offer unlimited potential to cope with the fast-changing requirements of the digital world in which we now find ourselves. Perhaps the biggest hurdle to cross will be to achieve the widespread embrace of cryptocurrencies, but surely that must be just around the corner. And, even if it does never come to pass, we will still be left with blockchain and AI to lead us towards this brave new world of payments.
