Implement These 7 Major Fintech Advancements to Maximize Profits in 2023
Technology is constantly changing, and 2023 is expected to be a year of significant advancements (hello, ChatGPT !) The leading companies in #fintech will focus on making payments more convenient, secure, and personalized for consumers by utilizing the latest technology and security measures.
?As a result, consumers can expect a smooth and secure payment experience, both online and in-store. Due to the increasing demand for secure and easy payment methods, seven major tech advancements are likely to emerge (and should be implemented ASAP to take full advantage!).
1. Pursue Profit-Driving P2P Payment Apps
P2P payment apps are becoming more popular, allowing users to easily transfer money to other users or pay for services. These apps can be standalone services, bank-centric services, social media-centric services, or mobile OS-centric systems. They offer unique features such as the ability to withdraw money to personal bank accounts, pay for services, split bills among multiple people, or send money internationally.?
Some P2P payment apps also support the transfer of cryptocurrencies. With an increasing demand for P2P payment services, the industry's revenue has grown over 200% in the past decade. In 2023, companies will likely pursue profitable ventures in P2P payment app development in areas such as:
Retail and B2C services
Action Item One -> Develop a Payment App
2. Use a Payment Gateway to Guarantee Secure Transactions
A payment #gateway is software that enables merchants to securely and efficiently process, verify and accept or decline payment transactions on their websites or mobile apps. It acts as a bridge between the merchant's website or app and the payment processing network of the acquiring bank, allowing customers to make online payments using credit or debit cards.?
This can be beneficial for businesses as it provides a convenient and secure way for customers to make online payments and it can also simplify the payment process by automating the handling of transaction approvals and declines, and reducing the risk of fraud.
Furthermore, it can also make it easier for businesses to integrate with other payment services and systems such as payment processors and payment orchestrators.?
In 2023, companies are expected to use a combination of efficient but expensive real-time payments (#RTP) and cheap but slow ACH transfers. We recommend using algorithms to determine the best and most cost-effective systems and providers for your transaction needs.
Action Item Two -> Developing a Payment Gateway
3. Offer e-Wallet Features Consumers Want
The use of digital wallets, such as Apple Pay and Google Pay, is becoming more prevalent at checkout counters as mobile payments become more common. As consumers prefer frictionless payment methods, businesses are offering more options such as digital wallets, one-click payments, and in-app payments.?
This trend is expected to continue with #ewallets becoming even more popular and companies adding new features to attract customers. Additionally, companies such as PayPal will continue to expand their offerings and become more popular.
David Barrett, the CEO of Expensify , spoke to Softjourn about the connection he sees between payments and the integration of communication features in digital wallets and expense platforms. He believes that it’s time for these platforms to step up their game by adding communication features - like Slack , SMS, or WhatsApp - but optimized for financial conversations at work and between friends.
Action Item Three -> Build or Improve Your Digital Wallet
4. Consider Web 3.0 Payments Technologies
Web 3.0, the third generation of web technology, is focused on integrating structured data and intelligent services to understand and fulfill user intentions. In the context of payments, this means using technologies such as natural language processing and voice commands for easy payment through voice commands, personalizing payment recommendations and offers based on past payment history and preferences, and using blockchain and smart contract technology for more transparent and secure payment processes.?
While still in early development and adoption, it is likely that #Web3 #technologies will become more widely used in the future and be an important trend for payment systems to consider.
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Action Item Four -> Implement Blockchain Technology
5. Utilize Up-and-Coming Fraud Prevention Tech
As e-commerce and online payments rise, so does the risk of fraud and cybercrime. To combat these threats, fintech companies prioritize #cybersecurity and implement strong security measures to protect customers' financial information.?
Revolut , for example, uses biometrics, PIN codes, and SMS login, as well as single-use virtual disposable cards and temporary card freezes, to prevent fraud.
The Encryption-as-a-service company, Vaultree , recently raised $12.8 million to develop end-to-end encryption that protects data at all times, whether in use, at rest, or in transit.?
In 2023, more companies in the fintech industry are expected to use Machine Learning (#ML) and Artificial Intelligence (#AI) to prevent payment fraud. ML allows financial institutions to analyze past data and create mathematical models that identify normal user behavior, making it easier to detect any unusual activity without causing inconvenience to customers.?
Fraud is projected to cost the card industry over $400 billion in the next decade, highlighting the importance of robust security measures in the fintech industry.
Action Item Five -> Implement Strong Security Measures
6. Expand Services to Stay Competitive
Banking as a Service (#BaaS) is a model in which traditional banks partner with fintech companies to provide banking services through APIs, allowing fintechs to offer a wide range of services such as account opening, money transfer, and credit card issuance without building their own infrastructure.
?As mobile banking becomes increasingly popular, with over 80% of millennials using it in 2022 and 3.6 billion users expected by 2024, BaaS allows fintechs to quickly expand their services and stay competitive. Additionally, BaaS can provide traditional banks with a new source of revenue and a way to reach new customers.?
Overall, BaaS can offer customers a more comprehensive suite of financial services, increasing loyalty and retention, while providing a more seamless and convenient experience.
Action Item Six -> Integrate BaaS
7. Strategically Invest in Modernizing Your Application
In a challenging economic environment, business leaders may be tempted to make short-term cost-cutting decisions that can negatively impact their long-term strategy.?
While it is important to conserve cash flow, it is also crucial to make strategic investments in #technology, talent, and customer experience that will provide the greatest value for the company in the long run.
Instead of rashly cutting costs, fintechs should approach economic developments with caution and make decisions that will support their long-term success. For example, business leaders should take special care to modernize their legacy applications, as outdated systems can prove to be more costly and difficult to maintain.
Plus, by modernizing, businesses will benefit by having a more scalable, secure, efficient, and user-friendly app, while freeing up resources for other strategic investments.
Action Item Seven -> Modernize Your Legacy Application
How to Implement These Technologies
With the quickly expanding market for digital wallets, #P2P apps, and #paymentgateways, we predict 2023 will be all about making payments exceedingly frictionless, personalized, and more secure for consumers, both online and in-person.?
Stay ahead of the curve in the #payments industry by clicking here to access our comprehensive guide on implementing the latest trends and technology for frictionless, secure, and personalized payments for your customers in 2023.
Don't miss out on the opportunity to enhance your offering and stay competitive in the market!