As world economies become increasingly interconnected, the need for businesses to pay vendors, partner, workers and organizations in other countries will also grow. Unfortunately, there are still obstacles that make it difficult to move money across the borders. Digital payments solve many of the physical barriers associated with global payments.
Digital payment, also known as electronic payment, is the electronic transfer of value from one payment account to another via a digital device.
Why Pay Digitally?
The shift from cash to digital payments has some clear supremacy for both customer and business due to more secure no risk and no charge payment. Through mobile phones the payers authentication is been verified either by biometric or through finger print which eliminates the risk to a certain level.
For business the payments received through cash becomes difficult to manage as it requires additional security due the lingering possibility of theft and by going digital this risk is eliminated and the speed of the transaction is also high. A direct succession of exchange is available thus making easier for accounting and for tax compliance.
The rapid rise in smart phone penetration across emerging economies, particularly in Asia Pacific, is expected to boost market growth
Furthermore, retail stores and services across the world are rapidly adopting and integrating mobile payment applications, such as PayPal, Samsung Pay, Apple Pay, AliPay, and WeChat Pay, to accept payments. Owing to changing lifestyles, daily commerce, and rapid growth in online retailing, this trend is expected to continue over the next six years.
The major driving force for the adoption of digital payment in hospitals is the government’s efforts for improvement in infrastructure and the increasing number of patients, which leads to long queues. COVID-19 pandemic is proving to be an enabler for digital payments in the healthcare industry.
Major innovations in Digital Payments are :
- Contactless payments
- Distributed ledger technology (DLT)
- Open Application Programming Interfaces (API)
- Biometric Payments
- Central Bank Digital Currencies (CBDC)
- QR codes
The data security and authentication plays a pivotal role in the growth of digital payment as well as in the E- commerce sector. We all know that the technology is not a fail proof application or equipment so it completely depends upon people both the end ,on how aware and to what extend the financial information is shared by the consumer and how the company is processing and safe guarding it from the data theft, frauds and stealing.
The future of digital payment is heavily reliant on the stability of data protection and cyber security.
One of the major drawback for digital payment is that the increasing cyber crimes which leads into digital theft and cyber attacks on financial information. The company or business might lose a colossal amount of client base if the customers get to know about the hacking of system and the reputation takes massive hit which might take some time to rebuild with an added pressure of loss of revenue.
Mobile-point-of-sale (mPOS) is a revolutionary technology as it frees all the merchants from their bricks-and-mortar locations and in-store payments. It liberates them to go to various places like concerts, trade shows, food trucks, and many other where they can seamlessly accept payments from their customers.
The gradual adoption of open-banking APIs and progressive changes in regulatory frameworks are expected to offer growth opportunities in the market.
Fintech players such as SoFi, Venmo, MoneyLion, Block, M1 Finance, and Revolut are shaping the future of the digital wallet by providing simple, mobile friendly platforms.
With a market value of $119.54bn, JP Morgan Chase & Co currently ranks first among the top ten digital payment companies. Visa, MasterCard, PayPal, Fiserv, Stripe, Intuit, Global Payments, ACI Worldwide, and PayU are the other key players of the market.
According to CrispIdea estimates, the global digital payments market will have a transaction value of $8.2tn by 2022.
For details on Industrial analysis and Market segmentation please feel free to refer to the following Digital Payments Industry report from CrispIdea: