Today’s world is very much a digital one, and technology has infiltrated almost every aspect of our lives, including how we make payments.
Cash is no longer king, and technology has completely transformed how we spend our money or perform any transactions. This article is going to focus on seven ways in which payment technologies have changed the ways in we spend our hard-earned money.
1. Cryptocurrency and Blockchain Technology
The rise of cryptocurrencies like Bitcoin and Ethereum is one of the most notable financial revolutions. Fintech companies have developed the once cumbersome blockchain to be responsive, allowing for instant transactions that can be verified on a public ledger.
Crypto offers merchants and customers an entirely new way to pay for goods and services. One popular use of crypto online is gambling. Online casinos are increasingly starting to accept crypto deposits and withdrawals, with the best crypto casino (of which there are several) also allowing for anonymous transactions with low fees while offering a wide variety of games.
Crypto has become mainstream, although it has not yet been embraced by all merchants. That means that the market is not yet too competitive, and those who accept digital currencies as payment can grab a section of the market before crypto payment adoption becomes more widespread.
2. Buy Now, Pay Later
Buy Now, Pay Later (BNPL) services have been around for a few years already, but when these services first emerged they completely changed the payment game.
Initially, BNPL was embraced by large retail stores that allowed customers to take items home after swiping a store-specific credit card, which would then be paid for during a set payment period. Smaller retailers weren’t able to create their own credit cards, but this recently changed.
Around 2012, a new payment network was created. Affirm was one of the first to provide this solution, and Afterpay came soon after. Klarna and Zip Pay are also popular services.
These payment networks allow customers to purchase products without immediate payment. Instead, customers are offered an interest-free, flexible payment solution.
Retailers can secure the payment even if the customer doesn’t have the cash on hand, and customers get to pay for the products/services as soon as funds come in, as agreed to by the payment terms.
3. Contactless Payments
No payment tech has enjoyed rapid adoption like contactless payments. Although it has been around for years, it was always considered a novelty. But, today it is almost the accepted payment method, with most merchants that accept card payments also offering contactless payments.
Contactless payments (when you simply “tap” your card or phone) make use of near-field communication technology. It often doesn’t require a PIN unless the payment exceeds a set amount.
It is fast, safe, and efficient, and doesn’t require customers to fumble with cash or come into contact with other people’s germs.
4. Peer-to-Peer Payments
Peer-to-peer (P2P) payments are transactions made between two people, and not between a customer and a business or two businesses.
Historically, P2P payments involved logging into your bank account, getting the other person’s account details, and transferring funds from your account to the other person’s account. But, thanks to technological advances, payments can now be made in real-time using software from PayPal, Venmo, or CashApp.
These payment methods have become more common for smaller retailers, for example, someone who has a stall at a market or sells products over social media.
5. Biometric Payments
Many people already use some type of biometric technology to make payments, such as using their fingerprint to log into their banking app on their phone. This is pretty standard and doesn’t require any new technology for merchants. Contactless payment systems can be combined with biometrics on smartphones to complete purchases.
However, some newer biometric payment methods have revolutionized transactions. Biometrics can also include scanning someone’s face, and these payment methods are becoming increasingly common.
For example, in Russia, facial recognition is used for payments at metro stations. Commuters simply walk past the scanners, and their tickets are automatically paid for.
PopID, an LA-based start-up, introduced facial-recognition payments in 2020, where patrons could use the tech to pay at selected retailers or restaurants. All they have to do is walk up to the till, and the cashier will complete the payment using biometrics.
6. Digital Wallets
Digital wallets, also called mobile wallets, are like traditional wallets where money is kept, except they’re stored on your phone or tablet, and not in your purse or pocket.
These mobile wallets have become standard for making in-person purchases. There is no longer the need to take out your bank card or swipe/tap it to complete a purchase. Instead, you can access your digital wallet on your phone and simply tap your phone to the card reader.
Popular digital wallet options include Apple Pay, Google Pay, Samsung Pay, or PayPal Wallet.
There is also a growing trend of crypto wallets, like Bitcoin wallets, that can speed up payments at merchants who accept cryptocurrency.
7. QR Payments
Have you ever noticed a small black and white square filled with a pattern of even smaller squares at a cash register? This is a QR code and it has transformed the payment industry.
To complete a payment using a QR code, the customer has to open their payment software (e.g. SnapScan or Zapper) or banking app and scan the code. They can then choose how they want to pay (like using their bank card or a Unified Payment Interface) and complete the purchase.
It is easy, safe, and very convenient.
Final Thoughts
Technological innovation is constantly transforming the world we live in, making it easier, faster, and more convenient to perform daily tasks. Payment technologies are constantly evolving, helping customers to spend money more easily, while merchants can receive payments faster.
Fintech is a rapidly growing industry, and it will be fascinating to see which payment technologies are being developed next.