Future of payments

People are now worldwide preferring cashless transactions to make their day-to-day payments. Online payment is a comprehensive, practical, and flexible method for fast and secure payments. Nowadays, it has become popular in industries and businesses. Two major factors lead to enable this change. One of them is digitization, and the other is pandemic circumstances.?

All the digital providers are working closely to improve and innovate the payment methods according to the demand and upcoming trends. Fintechs are expecting that the golden time for the online payment landscape is yet to come. It is interesting to know that in the present time, online transactions have set a milestone. Thus, there's a strong belief that the future of payments will grow exceptionally and give a new shape to the payment ecosystem.

Paperless transactions - simplified and short

Sending money to relatives, friends, or family and in business was typically lengthy some time ago. The process of payments to vendors and merchants has narrowed down with no risk involved. It has accelerated the importance of digital payments in primary channels like B2C, B2B & C2C. The new payment model gives an enhanced and personalized digital experience. There are payment service providers, payment gateways, and APIs to experience the best outcome of safe online transactions for customers and businesses in the market.?

Kuwait is known to be the big chunk of digital transactions. The total valuation of online transactions to reach US$10.09bn in 2022. Not only the cashless services, but today customers enjoy a wide range of services without going to the bank.?

Key trends for payments

With the increase in digitalization, financial institutions are focused on providing solutions to customers' problems. Problems can be many, but the one solution that banks have changed customer behavior is the use of online payments. Technical advancements and innovations are the key indicators to changing the perception. Initially, users were hesitant to use online payment. The world has seen so many dramatic changes in the economy. Nobody wanted to be a part of the jeopardy of digital payments. Everybody was dependent on the traditional payable and receivable culture. They do not find it worthy unless continuous development and research, and user experience prove that it is the safest and fastest method to transfer money from anywhere.?

Buy now, pay later: BNPL is the fastest growing method around the globe. This payment model has allowed customers to control their budget and finances by paying the provider after a purchase. BNPL is short-term financing with rules that gives time to customers to repay in the future. Startups such as Tranch from the UK, Billie from Germany, and postpay in UAE are some leading fundraising firms. The amount of e-commerce purchases made through BNPL is estimated to reach $306.8 bn by 2024.

The importance of cash has diminished: Cash is always a primary choice of payment for many people. In the modern days, customers are not comfortable carrying cash but are satisfied with making payments through phones or cards and wallets, etc. This change came into rapid existence during the pandemic. Time is not far when some developed countries will be known for running a cashless economy. Slowly and gradually, people are moving toward change. Hopefully, the world shall see a new boost in the economy.

E-commerce: Electronic commerce is a weightage tool to drive digital payments globally. More than four million Kuwaitis have access to the internet. Online shopping and purchasing from cards, APIs, and wallets are increasing with no signs of slowing down here. Citizens of Kuwait are spending on e-commerce websites on a large scale. Since 56% of the country's population is under 36 and has a high income, this is a lucrative e-commerce market.

The use of electronic wallets and open banking: A mobile wallet is a digital wallet that allows users to make payments, pay for goods and services, and access account information from their smartphones. The notion of a digital wallet does the same job as your real-life leather wallet but in virtual form. You can keep and maintain funds as per credibility issued by banks to buy goods and services.

Compared to other methods of disrupting financial services, people are more relative toward open banking. The financial sector is moving toward standard technological interfaces that allow data and services to be exchanged, known as application programming interfaces (APIs). By providing APIs, companies enable third-party developers, business partners, and corporate departments to access their applications' data and functionality. The use of APIs in commercial use will create new opportunities for organizations.

The real-time payment system: It is a technology invented for the betterment of users who are always in a rush to make business payments within a short time. The real-time payment system is a game changer and brings value to businesses in many ways. They are fast. Funds can be processed instantly. Ideally, it is a 24*7 process. You will get a quick payment confirmation notification. The adoption will continue to rise, and real-time payments will continue to emerge on various paths as merchants, businesses, and banks recognize the value of this system. RTPs are mainly trending in Asian countries.?

How the future of payments look alike

Sweden leads the pack and can become the first paperless economy nation, as per the survey conducted. Time is not far when most developed countries will alter and accept the pattern of digital payments. It is an impeccable way to pay as a customer and receive as a vendor within no time. Banks and businesses are working together to develop a more seaming experience for their users. An increase in smartphones, digitization and the use of Internet automation, and technical advancements will enable positive changes in all segments of customers and business life. These five aspects will be the trajectory of online transactions in the future. Now the question is, how do you want to overcome the challenges and encourage to adopt a payment integration system in your business??

Connect with Ottu's team to dwell in a contactless payment system.?