Technology in the finance industry and payments domain is advancing rapidly. It is important for businesses to watch the latest trends in the finance sector and merchant processing solutions so that they can stay ahead in the market.
Most businesses don’t understand that payment trends have an impact that goes beyond just the finance industry. With the evolution of payment trends, different industries will find new ways to monetise services and offerings, while companies will explore new methods of optimising their customer experience or software using their payment services.
These changing payment trends present large opportunities for platforms and businesses. Let’s take a look at some of the growing payment trends of 2021.
Fusion of Banks and FinTechs
Banking systems have a huge database of customer information, brand recognition, market knowledge and experience of the finance industry. Despite these advantages for traditional banks, they lack the capabilities to meet the growing customer demands for customisation, personalisation and speedier transactions. The greatest challenge banks face is implementing high-end technologies within the finance sector because of the weak culture of innovation that banks have.
Collaborating with FinTech organisations can be hugely beneficial for banks and the banking sector overall. Banks are always on the lookout for increased ROIs with customers and approaches to engaging with Fintechs. The aim is to cut costs and not incur losses.
Payments Affected by the Cloud
Delayed payments and long transaction times are among the leading reasons for customer dissatisfaction with online businesses. This results in negative publicity for your business and operations. With cloud technology, a network of remote servers is used which are hosted over the internet. These servers store and manage payment data better than local servers do. They also offer several business advantages such as flexibility, automation, high security and faster cash flow. This makes for a huge upgrade for your existing merchant solution and removes the problem of delayed payments. You can also take advantage of the cloud’s cost-effectiveness, reliability, higher productivity and feasibility.
Real-time Payments Make a Difference
Real-time payments are touted to be the game-changer in the payments industry. RTPs provide security, convenience and speed, which has rightfully made them a go-to choice for customers around the world.
RTP makes sure funds are available to the transaction beneficiary immediately. It has been designed to meet the needs and standards set by the CFPB (Consumer Financial Protection Bureau), a set of principles for quicker transactions. RTP offers real-time notification of transactions in the form of invoices with payments, confirmation messages, payment requests and real-time account statements, among others. These features ensure a system of certainty and transparency is maintained for transactions between both parties.
NFC and EMV
NFC or Near Field Communication has grown in popularity within the payments sector owing to its high security standards and easy-to-use interface. It is a modern payment method where users simply need to tap or wave their devices to make payments.
EMV cards with chips work in a similar manner. The waving or tapping technology is compatible with credit cards to allow contactless payments. EMV helps merchants and payment processors to reduce their liability by securing transactions to higher security standards. EMV is cost-effective and highly secure compared to swipe methods of payment, making it one of the top trends in 2021.
The payment ecosystem has a lot to offer in 2021 in a post-Covid world. The global finance industry has recognised the importance of seamless, agile, secure and global payment methods. In the new normal, organisations should be prepared to develop strategies that rely on and reflect their future-ready mindset. This is the only way to survive and grow in today’s highly competitive payment landscape.