The rapid growth of electronic payments has been driven by emerging Asia and the CEMEA region, with North America lagging behind. This is because mature markets often have legacy payment infrastructures. However, regulation has been a powerful force in driving change in these markets and has buoyed growth rates. North America has been slow to adopt new technology, particularly card technology, which requires businesses to upgrade payment terminals. The adoption of contactless cards is also slow in this region, as they are seen as a business cost.
Online banking
In recent years, the growth of e-commerce has fueled the growth of electronic payments. Online purchases are faster, cheaper, and more secure than paper payments, and people have been using credit cards instead of cash for years. In addition to e-commerce, smartphone and other mobile device use has been on the rise. The increasing use of mobile devices means that consumers are more likely to make payments online, which opens up a new pool of customers.
While cash remains the primary form of payment, digital transactions offer a number of benefits. For example, a number of developing countries have gained access to formal financial services because of digital payments. In Africa alone, 62 percent of adults have a bank account, making digital payments a key element of their financial ecosystems. Digital payments also have the potential to raise income-earning potential, increase women’s economic participation, and create more equitable societies.
Mobile payment
The rise of mobile payment has opened up new possibilities for consumers and merchants alike. While the mobile payments system has been around for a while, new players are making inroads into the market. The virtualisation of banking business has weakened traditional boundaries, enabling new entrants to compete with banks for market share. Moreover, the increasing customer confidence is driving merchants to offer mobile payment services.
As a result, mobile payment usage is set to rise in the coming years, particularly in Asia and China. Smartphone usage and development are on the rise, a trend that has largely driven mobile payments. According to eMarketer, people spend 88% of their time on mobile apps, so it’s no surprise that this trend has been reflected in a rapid rise in mobile payments. It’s not just smartphones and tablets that will be capable of mobile payment.
Point of sale (POS)
The growth of electronic payments is largely fueled by the growth of point of sale (POS) systems. POS systems have evolved into mission-critical business applications, enabling business owners to manage finances and make decisions from anywhere. With modern POS systems, owners can integrate them with other business applications, including accounting and email marketing, to make their businesses more efficient and profitable.
POS is the key interface between consumers and merchants. Point of sale (POS) systems are increasingly integrated with mobile applications. For example, a department store might have POSs for individual product groups. This way, the staff can actively promote products and help consumers make purchasing decisions. However, this interface is not universal and can impact a business’ profit margins and buying habits. Similarly, a concept convenience store like Amazon Go could use mobile payment systems and apps to allow shoppers to pick up items without going through the register. In the future, these technologies may revolutionize the entire POS experience and enable payments to be rolled into a seamless customer experience.
Digital wallet
The growth of digital wallets can be attributed to the ubiquity of mobile technology. Many wallets allow consumers to pay with their mobile phone by waving it over a payment terminal, thereby avoiding the need to insert cash. A digital wallet can be a valuable tool for merchants, as it can also be used as a data archiving system, giving insight into consumer consumption and value-added services. Merchants and consumers alike will benefit from convenient payment systems, as inconvenient experiences can result in high consumer churn. Furthermore, digital wallets allow businesses to offer personalized marketing, discounts and loyalty programs.
The digital wallet is one of the fastest growing payment technologies today. Its popularity has been accelerated by the prevalence of mobile payments, such as Apple Pay, Google Pay and Samsung Pay. These wallets also allow users to store other data, including their credit card details and flight tickets. They are also safer than cash. With a plethora of applications and services, consumers are now able to pay for anything with the touch of a button.