The payments industry has been one of the most active areas of innovation in the banking industry. Fintech Firms and payment solutions company are fast transforming the P2P(person to person) and B2B(business to business) payments sector. Cash & cheques, which were the norms back in the day, are now giving way to contactless and chip-based payments. There was a time when consumers were starved of options. Consumer expectations are drastically different now with the need for easy and instant payments. Today, the permeation of smart devices in the daily lives of people, coupled with the wave of innovation has created a vacuity to be filled by newer payment methods. With the noose being loosened on regulations, several new entrants in the payment sector are working towards providing faster and cheaper transactions, both within the country and across borders. The age-old firms providing cross-border payment services, such as Swift, Visa and MasterCard, are also under threat from new entrants and are working to improve the speed, transparency and predictability of cross-border payments to stave off further encroachments by Fintech.
Cheques and wire transfer have long been the preferred mode for domestic business-to-business(B2B) payments. However, over the last several years, credit card network giants – Visa, MasterCard, American Express – have come up with solutions that let firms issue invoices using a digital payment platform where their creditors can pay electronically. Even though this has sped up the payments process, there are a few glitches that result in a delay. Swift and Interbank – the most commonly used cross border payment transfers – are still following the traditional technology which makes the whole process slow and rather expensive with inadequate tracking capabilities. These obstacles have been overcome by Fintech companies with the use of blockchain and virtual currencies which are faster. The use of distributed ledger technology allows companies to transfer funds faster, cheaper, and in a trackable manner. What takes 4-5 days for SWIFT could be accomplished within 2 days with the use of new payment platforms. These innovative payment products all offer faster speeds and enhanced user experience by reducing friction in the payment process.
Some Payment Innovations to Watch Out For
The Disappearance of Credit and Debit Cards: Even though cards seem to have a bleak existence in the future of payments, they will only apparently shun their plastic bodies to possess mobile phones and wearables and further inherit bodily implants. Further freeing customers from the burden of tangible payment are non-cash options like mobile payments, payment wallet, and even cryptocurrency. So in all, even though the physical experience of the card perishes, the network is here to stay.
- Blockchain for Cross Border Payments: Blockchain is one of the major payment technologies having the potential to redefine and disrupt areas of international payments. For domestic payments though, blockchain lacks the speed and availability as compared to the existing networks.
- Boom in Facial Recognition: With all of the advancements happening in the payments industry, there’s going to be a return to identification awareness. Associating facial recognition with payments methods or consumer IDs will allow safer and more secure payment transactions.
- Impetus to Open Banking: Open banking APIs stimulate innovation and collaboration, leading to expanded banking ecosystems that could include more than just financial services to make a consumer’s lifestyle better.
- AI-Based Predictive Banking: Digitalization has led to an accumulation of data enough to enhance customer experience while increasing accuracy. With such rich consumer data, financial institutions can perfectly know their clients and accordingly provide tailored advice as opposed to blind selling.
To grow and compete amid stiff competition, changing regulations and advancing technology, financial institutes must put innovation to the fore. Mindgate Payment solution has been at the forefront of the payments innovation right from its inception, an outlook which has made it a key global player in payments technology and transaction processing. From providing new generation payment gateway solutions to mobile-based collections and payments platforms like RTP & UPI payment. At Mindgate ideation labs, we conceptualize and co-create solutions leveraging technologies like Blockchain, Machine Learning (ML), Artificial Intelligence (AI), IoT, etc. application to the digital payment space. By following innovations with offerings, We are in a constant strive to address customer requirements through innovative solutions, to drive enhanced value and experience for our customers.