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 increase of online payment market or does it expanding at the rapid rate?
The global digital payment marketplace is expected to hit the USD6.6 trillion mark in 2021, registering around a 40% begin 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 publication rack collaborating with traditional loan companies to appeal to the latest consumer and merchant preferences. Because of enhanced broadband connectivity, increasing mobile commerce, emergence of latest technologies such as Virtual Reality, Artificial Intelligence, and rapid digitization, billions of everyone has started embracing contactless payments in both 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 versatile to make use of. In-app payments or tap-and-go transactions take seconds in the checkout and allow users to create payments anytime and anywhere. Tokenization, encryption, Secure Sockets Layer (SSL), etc., offer multiple strategies to securing payments while enabling digital transactions. Moreover, a persons do not have to fill in information whenever to complete the payment process. Thus, online payment gateways play an important role in the economic growth, enabling trade in the present day economy. With social distancing rules available, digital payments are getting to be a duty for contactless transactions as opposed to just a transaction alternative to steer clear of the spread of coronavirus.
Digital Commerce Empowering Businesses
Electronic payment systems are getting to be a crucial part of companies as consumer inclination towards online shopping is expanding. With broadening internet penetration, increasing use of smartphones, and diverse options for e-transactions, most people are preferring online channels over traditional brick-and-mortar stores for shopping. Therefore, businesses are shifting online by having an electronic payment strategy to maximize their profit earnings. Automating the electronic payment system eliminates the scope of errors and saves a lot of commitment. High standards for detecting and preventing fraud in digital transaction systems and AI-based fraud detections protect users from security breaches. By giving the flexibility in making payments through credit/debit cards, mobile money, e-Wallet, etc., the businesses can expand their usage. The electronic payment process improves customer care as customers need not count cash or cope with paperwork when they desire to make the transaction.
Biometric Authentication Enhancing Security
Biometric authentication involves recognizing biometric features and structural characteristics to verify the identification of your individual. The verification method can involve fingerprint scanning, facial recognition, voice recognition, vein mapping, iris detection, and heartbeat analysis. Together with the surge in identity fraud and fraud, biometric authentication has turned into a reliable and secure alternative to make digital transactions. In accordance with a recently available research, biometrically verified mobile commerce transactions are anticipated to constitute a tremendous 57% from the total biometric transaction by 2023. Biometric payment cards can also be becoming more popular as they support tap-and-go payments, allowing users to produce faster digital transactions. The digital payment technology provider, Worldline is joining up together with the French FinTech, A3BC (Anything Anywhere Anytime Biometric Connection), to protect mobiles from intrusion using a two-factor authentication process. The combined solution eliminates identification by having a single touch, rather it recognizes fingerprints through a picture from 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 credit cards being the highly adopted payment type globally. Digital wallets offer flexibility to users to store multiple payment methods in one digital home and turn cash into electronic money needed for online or in-store purchases. Loan companies have previously began to embrace the digital wallet trend by offering virtual cards to business customers. The virtual cards stored in digital wallets consist of details like 16-digit card number, CVV code, date of expiry and work the same as the physical credit card. Currently, only 37% of merchants support mobile payments at the point of sale, however with the increasing adoption, merchants are going to spend money on technologies facilitating digital wallets. The virtual wallets can conserve money because of low processing costs since they limit transaction values and frequency. Artificial Intelligence (AI) is increasing the user experience in terms of transactions with ChatBots, designed to execute and robotize essential exchanges as per the user’s interest. Besides, cryptographic money-based e-wallets are now being embraced by new companies to small-medium organizations for storing digital money. Smart voice technologies are contributing to the increase of smart voice wallets since that time Amazon propelled the principle of the platform, that’s now being followed by Google and Apple.
E-Commerce Boom Accelerating Digital Payment Market Growth
E-commerce growth at an exponential minute rates are creating shock waves, as well as the sonic boom is reverberating over the FinTech sector. The development of several e-commerce companies is driven with the form of financial services they supply. Digital transactions help it become convenient for the seller and buyer to make transactions and also be loyal to the marketplace space. The COVID-19 pandemic added some other dimension to e-commerce innovation, introducing newer trends like payment alternatives at checkouts (steer clear digital wallets), virtual cards, QR codes, and also other touchless transactions. Besides, the Buy Now Pay Later (BNPL) trend is dominating the e-commerce industry mainly because it relieves the financial burden about the buyer. BNPL involves a soft credit check needed, hence the consumers can purchase what they desire, maintain the inventory moving, and pay overtime without having affected their credit standing. BNPL provides businesses with much-needed liquidity and greater flexibility in 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 comprehension of hyper-local markets and how it can establish strong local partnerships. Businesses and consumers increasingly “went digital” for providing and purchasing goods and services online. When the pandemic hit, people did not need to touch or exchange cash due to paranoia of catching chlamydia from physical currencies. Several governments around the world introduced digital financial transfers to provide COVID-assistance. Owing to lockdown measures, consumers shifted to online platforms, which catapulted the requirement for digital payment systems. Now, digital platforms have become a vital part of people’s lives, and rrndividuals are more likely to continue internet shopping inside the post-pandemic period. The dramatic shift in consumer behavior will probably augment the demand for e-payment systems much more. Therefore, organizations are focusing their attention on digital mediums in order to meet the newest customer demands and thrive businesses from the changing market scenario. Organizations are reimagining customer journeys to scale back friction and supply new safety measures. Payment companies such as PayPal and Square Cash are staffing up charges to improve view the rearrangement of societal norms and stabilize the company in the future.
e-Payment Systems will be the Future
With increasing smartphone and internet penetration, rrndividuals are becoming tech-savvy, which presents endless opportunities for that digital payment markets. Post-pandemic, digital payment systems are likely to carry on and flourish in the past into the future. While cards remain the first choice for payments worldwide, mobile wallets are quickly gaining traction. The original cash flow is declining in bank branches and ATMs, demonstrating an electrical move perfectly into a cashless society. Currently, China dominates the worldwide mobile wallet consumption, followed by The philipines. However, it is possible to many countries that are highly dependent upon cash due to not enough trust towards banking institutions and not enough proper broadband infrastructure, etc. Sooner, social media-initiated payments, biometric payments, voice-activated payments will certainly become mainstream in developing countries too.
Cybersecurity and Privacy Concerns with Online Payment Solutions
Cybersecurity and privacy threats are getting to be a troubling nervous about the increasing incidences of internet fraud. In line with the Mastercard survey, one inch four consumers experienced some type of fraud in 2020, ramping up the cybercrime rate by 49%. In the first half of 2020, online scams increased by 73.8% from 2019. However, adopting new-age technologies such as multifactor authentication, biometrics, 3D security, Artificial Intelligence, and Machine Learning might help control fraudulent activities including phishing, virus attacks, etc. Shifting to contactless cards, QR codes, and tokenization could also help mitigate risks associated with digital payment solutions. Besides, sensitizing end-users in regards to the secure use of e-payment solutions through amplifying efforts towards building financial literacy can help to prevent frauds. The emergence of mobile commerce and also the evolution of e-payment platforms backed by robust security solutions can help drive the aim of making the economy truly cash-less.
Based on TechSci research directory of “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 international payment gateway marketplace is expected to cross USD15 billion mark in 2019, registering a CAGR of 22% by 2026. The expansion may be related to the growing demand for online transactions, rising broadband connectivity, and exponential expansion of e-commerce across the world.
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