An insight into the rising needs of innovative FinTech payment solutions that need to be adopted by the merchants in order to seize global opportunities.
The year 2020 has shown significant changes needed across many sectors; the payment industry was not an exception. The Covid-19 pandemic accelerated the need for innovative digital payment solutions. Moreover, trends including contactless payments and cross-border remittances have become even more significant. Vendors and merchants need to integrate a payment infrastructure that caters to their global and local businesses.
In this article, we understand how the covid-19 pandemic has affected the overall payments industry. We also take a look at the different fintech payment solutions that merchants and vendors need to adapt to cater to the changing demands.
Payment Solution Trends Post Covid-19
Reports indicate that trends of payment acceptance have significantly shifted after the pandemic. From rising consumers shopping online to contactless payments, here are some of the trends that have changed in the payments industry.
1. Contactless Payments
A Gartner report indicates by 2023, a number of countries will launch initiatives to eliminate cash circulation and shift to payment digitalization. The report further suggests that 80 percent of the purchasing orders for most organizations will be contactless by the year 2024. Governments and payment service providers also encourage contactless payments as a measure of safety. However, the current scenario suggests that the trends of contactless payments are likely to continue.
2. Cross-Border Payments
Cross-border payments have also changed as one of the consequences of the Covid-19 crisis. A report by McKinsey suggests that cross-border transactions are predicted to rise to more than 5500 billion transactions by 2022. The average global annual cross-border transaction per capita increased from 0.5 in the year 2014 to 0.7 in 2020.
The number of consumers using mobile phone payments will increase twice, reaching nearly 2 billion, by 2024. Trends from the report indicate that we are likely to see changes in the payment methods. Instead of the banks and critical service providers, consumers will define the changes in cross-border payments. Users are now seeking a faster, more comfortable, and seamless transaction experience.
3. Online Spending
eCommerce and online shopping have accelerated by up to five years due to the pandemic. The pandemic has led to an increasing number of people shopping online to meet their needs.
Retail eCommerce sales grew by 27.6% in 2020. Furthermore, analysis reveals that nearly 75% of buyers and sellers prefer the digital option over face-to-face. The rise in online spending will lead to the need for fintech solutions that facilitate payment integration.
4. Adoption of FinTech
The pandemic has accelerated the adoption rate of fintech services among consumers. Moreover, apart from the millennial generation, the rate of adoption is rising across many user-specific demographics. For instance, even the older generation has adapted to online mobile solutions and other digital services.
Innovative Payment Solutions Post Covid
The payment landscape has significantly changed after the pandemic. In a post-covid era, innovative solutions and technology-driven ways should be adopted to cope with the current changes. Merchants, vendors, SMEs, and enterprises need to rise to the current demands for enabling a user-friendly experience to their customers.
Here are some of the strategies that vendors must take into consideration:
1. Speedup the shift towards more contactless payments
Contactless payments are already found in many e-commerce outlets. However, there is a need for a more accelerated shift towards using more contactless payments. Online stores need to integrate innovative payment solutions into their infrastructure. Offline stores must consider offering multiple payment solutions including cards, QR code transactions, mobile wallets, and more.
2. Flexible and personalized payment experiences
Consumers are now on the lookout for more flexible solutions that offers multiple features. As businesses continue to expand globally, local payments in their preferred currency are one of the solutions.
XanPay is a payment solution provider that facilitates your customers to pay in their preferred fiat currency. On the other end, the merchant receives the payment in their preferred banking currency.
3. Improving existing payments infrastructure
Current payment infrastructure systems have become outdated. ECommerce platforms can no longer rely on credit and debit cards as payment methods. The infrastructure needs to be optimized to cater to the needs of a global audience.
Improvements can be made on several aspects: providing a real-time payment experience where customers can undergo transactions faster than usual. Besides, providing easy account-to-account transactions via mobile phones, for example, and providing cross-border payment options.
4. Strengthen the security and safety measures
One of the biggest problems with implementing this transition is the increased risk of digitalized and online payments. Merchants must integrate payment systems that emphasize the security in online payments. Digital frauds should be addressed whenever they emerge to ensure the security of online payments.
5. Cross-Border payment infrastructure
An affordable and reliable cross-border infrastructure has become increasingly relevant. Digital payments and global-scale businesses have escalated the need for an effective cross-border payments system. The current landscape is costly, slow, and ineffective to match today's business needs.
XanPay facilitates a payment solution to process cross-border payments in an affordable, fast, and effective manner.
Although the covid-19 crisis was a downside to different economic fields, it was the fuel to drive a drift to flexible and less contact payment experiences. Customers are now ready to engage in the new innovative solutions as long as there is an added value. This value could be the ease of use, the real-time experience, or the seamless cross-border payments.