With the ever-evolving system of payment, things have been transforming rapidly. Several trends and innovations reshaping the finance system worldwide, helping us move ahead with a secure, efficient and user-friendly payment ecosystem. The rise in the advancement of technology is resulting in some user-friendly payment gateways that enable even international money transfers with less cumbersome. Here we will discuss some of the leading head payment systems that have provided the globe with some stupendous payment systems aligning with the technology.
Trends and Innovations of Payment Systems
The rise of digitalisation and the COVID-19 pandemic has profoundly confined the use of cash, thriving towards a cashless payment system. With numerous digital payment systems like online banking, UPI, cards, digital currencies and payment tags, becoming prominent ways of paying, this is just the beginning of a tech-led payment system. Here are some trends and innovations that could firm their feet in the payment system.
Digital Currencies
Digital currencies have been popular globally for around a decade with cryptocurrencies like Bitcoin and Ethereum being in the limelight for a while now. The central banks are exploring the potential of digital currencies with Central Bank Digital Currencies(CBDC). These digital currencies are issued and regulated by central authorities, unlike the decentralised cryptocurrencies that are not regulated by any government bodies or institutions. Some countries like Sweden and China have already begun to develop their own digital currencies, as they tend to increase payment coherence and cut down transaction costs.
Digital Wallets
Digital wallets have been a very successful mode of payment in our country, with well-established platforms like Google Pay and Paytm. This payment mode surged during the COVID-19 pandemic as it enables contactless payment. Embraced by an abundant population, the mobile wallet allows users to make secure transactions through a QR code scan without the hassle of exchanging the remaining money. Everyone from small vegetal vendors to huge companies has welcomed this pay method with open arms.
Buy Now Pay Later
The buy now pays later (BNPL) has revolutionised the way people shop and manage their finances. This innovative payment option permits the consumer to shop now but pay their bills over a while. This method is conveniently better and less cumbersome than traditional credit cards, as it increases access to goods for consumers who do not have credit cards or don’t want to use them because of their fuss. Some BNPL services also provide interest-free installment plans if you repay within the given time.
Open Banking
Open banking is a new financial trend that is gaining a grip throughout the globe by giving consumers greater control over their financial data. It involves the sharing of financial data between the banks and the third party via a secure application. The open banking system allows newbies to put forth their financial products and services while benefiting the customers with seamless and efficient financial services, integrating multiple accounts into a single platform.
Cross Border Payments
The cross-border payment methods trim the challenge of financial services between the two countries, which helps interconnect the world, better in global commerce. Unlike, the traditional banks that make an international money transfer inefficient, this cross-border payment system can handle it more efficiently. But still, there are loopholes in the system that need to be addressed, like the cost of the transaction, processing time, currency exchange risks, and security concerns.
Conclusion
The world as a whole has come a long way with regard to payment systems, from barter systems to coins and notes to cheques and now the latest cashless payment system. With changing times, the mode of payment and money transfer has also advanced, and certainly, after the pandemic, everyone has to agree on the best payment system for cashless transactions. Along with that, several other innovative ways have brought significant changes to the complete payment system. With some advanced innovations like digital currencies, digital wallets, buy now pay later, open banking and cross-border payments, the world is heading towards a hinder-free finance world.
