Payment is an important pillar of the global economy, as it is essential to consumers' daily lives, to the stability of businesses, and to the operations of all industries. With the economic globalization, changing customer expectations and innovation drive the developmemt of technology. Meanwhile, fierce competition in the market is driving innovation in the payments industry, and payments-related infrastructure has been an important part of the rapid transformation of companies in recent years. Today, we will discuss the five key drivers of the payment industry transformation.
1.A New Cashless World
According to the Global Payments Report, it found that the number of respondents who spend half or more of their monthly expenses on e-commerce has increased by 24 percent since the outbreak of COVID-19. From Statista, it is expected that by 2026, 91% of the world's population will own a smartphone, and they will be less likely to expect to return to the traditional cash transactions of the past after experiencing the speed and convenience of a smartphone, and there will be an increasing number of people who realize that digital payment are a better, faster, safer and more convenient financial service.
2.The need for quick payment
It is known that both consumers and businesses are very conscious of the time-cost of transactions, and the need for instant transactions is driving and influencing cross-border payments, international remittances and e-commerce. Whereas in the past, reflecting the immediacy of cash transactions through electronic means was an ongoing and complex technical challenge. Nowadays, most financial institutions, whether banks or third parties, have real-time clearing and settlement facilities, which allows businesses to process payments quickly.
3.Embedded payments will be more popular
Embedded finance is the placing of a financial product in a nonfinancial customer experience, journey, or platform, which has been one of the much-discussed topics in financial services over the past few years.
As the industry gradually embraces the trend toward embedded finance, many companies outside of traditional financial organizations are beginning to offer financial services related to their existing products. According to data from research and marketing firms, the embedded payments industry is expected to grow from $124.7 billion in 2022 to $380.5 billion in 2029.
4.More payment data
The multiple digital touchpoints involved in the cashless payments ecosystem provide a wealth of data that is valuable for banks and fintech to analyze customer relationships. According to the analysis, businesses using powerful AI tools to unlock payment activity data can deliver more efficient and tailored products in a safer, and more secure environment.
5.A more secure payment environment
The rapidly growing e-commerce industry also increases the possibility of online fraud. In the future, payment institutions will be able to detect and circumvent anomalies earlier through safer and smarter security facilities to understand customers' financial habits.
According to predictions, future fraud prevention measures may include voice-activated transactions, biometric identity verification and smart assistant payment verification, which can all play important roles in ensuring the security of digital payments.
For global businesses, cross-border payments including advertising, purchasing, and employee expense management are inevitable, and then put higher requirements in card numbers, payment efficiency, and security.
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