The rising popularity of digital payments reflects the convenience of the method. Not having to carry cash reduces vulnerability, adds to the convenience and makes transactions more efficient.
The advancement of technology has helped develop various industries, including Fintech. For example, 46% of people exclusively use digital channels for their financial needs.
Digital payment is an avenue with high potential and there are several methods of making these cashless payments. As a result, there are a few digital payment trends emerging in 2021, mostly accessible with mobile apps.
Advantages of Contact-Free Payment
The global digital payments industry reached a $5.4 trillion value in 2020, indicating more than 15% increase year-on-year. This trajectory is expected to grow to $10.5 trillion in the next four years.
The development of the fintech industry, and specifically digital payments, is due to the many benefits of contact-free and cashless payments.
Faster Transaction
Time is money. If a transaction can be made quick and efficient, then the method has increased value. Instead of getting cash from an ATM, which demands time to navigate there and wait in line, payments can be made with the tap of a screen.
Easy Global Payments
Online payments have opened doors for global transactions. With mobile apps, the issues of time and location become irrelevant. Instead, payments can be made from anywhere in the world.
Added Security
Contactless payments offer added security compared to paying cash. Electronic features such as tokenization, encryption and SSL, add an additional layer of security during transactions.
Economic Savings
Installing a credit card facility at a business costs money for each transaction. With other digital payment options, a fixed fee is paid to a service provider and no further fees are charged. This saves the business money in the long run.
Contactless Payments
It took a pandemic to make the world aware of the risk of human contamination during daily happenings. Human touch is avoided with contactless digital payments such as QR codes and contactless POS terminals.
Top 7 Cashless Payment Trends​
There are several digital payment trends that are changing the dynamics of the FinTech industry. Each offers unique value and advancements to the current digital payment systems.
1. Secure EMV Technology

Europay, Mastercard and Visa (EMV) technology is based on smart payment cards, also known as chip cards. Another name for EMV technology is integrated circuit chips or IC cards. The chip is the feature that stores the data.

Cards are inserted into the reader. For added security, a pin or a signature may be required. As an added bonus, EMV cards contain microprocessors so cardholder and offline transaction validation is possible.

EMV technology is an advanced development from storing all the data in the card’s magnetic strip.

2. Smart Speakers

Devices such as Alexa can do a lot more than put on a relaxing playlist. Voice assistants are also able to receive voice commands to make service transactions such as ordering food or booking a taxi.

The first smart speakers were primitive in graphic design but have since developed rapidly. A recent survey revealed that 35 percent of consumers use voice assistants to buy products such as groceries and clothes.

This behaviour makes smart speakers a digital trend, especially when it comes to making purchases.

3. Biometric Verification
Biometric verification is an important development and helps to identify and authenticate a person. Using recognisable and unique data allows a digital payment to be verified. Some of the most popular biometric verification methods include;
  • Facial recognition
  • Voice identification
  • Fingerprint scanners
  • Eye retina scanners
Biometric technology is predicted to increase over the years. By 2025, technology’s value is predicted to $68.6 billion.
4. mPOS Payment Technology

Mobile point-of-sale (mPOS) technology is another digital payment method rising in popularity. Vendors in all settings have started to accept payment through mobile phones.

The portable point of sale plugs into a smartphone or tablet and operates as a register. Businesses that do transactions on the go and outside of a specified geographic location find this payment method particularly useful. For example, market vendors and food trucks.

All that is needed is an internet connection, a debit or credit card reader and an application downloaded to the mobile device.

5. Artificial Intelligence & Machine Learning-Based Payments

Artificial intelligence (AI) and machine learning (ML) offer a safe and secure payment method. These methods offer convenience by integrating chatbots for virtual assistance. They also offer added security by flagging unusual transactions.

AI has had a big impact on technology industries. Fintech, in particular, has high expectations for AI benefiting digital payments. By fighting fraud intelligently, powering better customer service, and driving digital transformation.

6. e-Wallet Solutions

The virtual wallet saves a person’s payment information on a smart device. The individual can then send and receive funds through a digital payment system.

Not only are transactions quick, easy and convenient, but e-wallet payments also offer other benefits. For example, the system offers discounts, gift cards and other consumer deals.

Using a mobile wallet offers convenience, security, and low cost transactions. Often all that’s needed is a single tap on a screen.

7. NFC Technology

Near Field Communication (NFC) technology is a contactless communication technology that works using a radio frequency field. NFC technology’s purpose is to exchange data between two devices using a basic touch gesture.

This method of payment makes NFC technology an effective contactless option. The process is quick and easy. NFC in mobile apps is revolutionising the payment system by enabling transactions without hassle, fuss or high costs.

Digital Payments Will Continue to Boom

Digital payment technology is a foundational pillar in the development of fintech. Several companies have invested in making online payments secure, convenient and easy. The joint effort of big companies has increased the development of digital payments across the world.

These are a few of the digital payment trends in 2021, and more developments are expected to emerge. Keeping security and convenience at the heart of these advancements, it’s exciting to see what the future holds.

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