Payment Trends: The Evolution of Transactions
From the ancient days of bartering goods to the era of digital payments, the world of transactions continues to evolve. Each new method brings more advantages than the previous one, shaping the way we handle our finances. In this article, we will explore the latest payment trends and examine the convenience they bring.
Buy Now, Pay Later (BNPL)
As customers shift towards using credit cards for large purchases, Buy Now, Pay Later (BNPL) services have gained significant popularity. Currently, around 360 million people worldwide utilize this convenient payment method, and this number is expected to rise to 900 million by 2027.
What makes BNPL so appealing is its low cost and flexible payback structure. With newer packages continuously being released, BNPL becomes an even more affordable option. This payment method particularly attracts young shoppers and senior citizens who do not possess credit cards. In the future, BNPL has the potential to replace traditional means of establishing credit.
Influx of Mobile Wallets
Mobile wallets are taking the payment world by storm. These apps turn your smartphone into a digital wallet, providing a plethora of functionalities such as storing money, sending and receiving payments, paying bills, and earning rewards. Trustly is one such trusted mobile wallet that offers seamless transactions across various industries.
With mobile wallet transactions projected to reach 49 billion worldwide by the end of 2023, major corporations like Apple and Google are joining the trend by offering their own mobile wallet solutions. It is only a matter of time before more businesses develop their proprietary wallets, ensuring fast, convenient, and paperless transactions.
Contactless Payments
Advancements in technology have made contactless payments a significant trend in the payment landscape. By simply waving their smartphones before a reader, users can complete transactions without physical contact. This payment option gained even more traction during the COVID-19 pandemic when minimizing contact became crucial.
Instantaneous flow of encrypted data to point-of-sale devices and the superiority of contactless payments in terms of speed and security have convinced many users to adopt this method. Major tech companies like Samsung have introduced their own contactless payment systems using near-field communication (NFC) technology. The popularity of NFC payment systems continues to grow globally.
Increasing Demand for Mobile Point of Sale
The rise of mobile point-of-sale (mPOS) technology has revolutionized payment processes for businesses. Instead of relying on traditional checkout counters, salespeople can now use their own mobile POS terminals, providing improved flexibility and enhancing the overall customer experience.
Global Market Insights predicts that mPOS will grow at a compound annual growth rate (CAGR) of around 19% between 2020 and 2026. This indicates the increasing demand and preference for this digital payment method.
Biometric Authentication
Biometric authentication is another prominent payment trend in 2023. Utilizing unique biological and anatomical features such as fingerprint scans, facial recognition, and iris scans, this form of verification ensures secure and personalized transactions.
With biometric authentication, the risk of identity theft and fraud is significantly reduced. Its precision, efficiency, and safety make it a prime candidate for becoming the standard authentication method for all electronic transactions.
Decentralization: An Alternative to Traditional Banking
In response to the limitations and vulnerabilities of traditional banking systems, the emergence of real-time payment options like Automated Clearing House (ACH) transfers is challenging the status quo. Previously, bank wires monopolized digital payments, despite their inconvenience and susceptibility to fraud.
However, new competitors are entering the market and offering real-time payment solutions, which mitigate transaction fees and security concerns. These alternatives are becoming widely accepted by businesses and consumers alike, making digital payments more accessible and secure.
