There is a growing need to secure electronic payments as there is no getting around it. And the only way through it is by adopting a proactive approach to resilient infrastructure capabilities. This article throws light on the future of payment technology.
Digitalization of the economy goes far beyond just dealing with digital data. It translates more literally to the interconnectedness of the economy through various technologies. Analog payments have been pushed back ever since the global pandemic. Today, APIs are taking center stage as the buzzword for embedded digital payment gateways and other concepts such as open banking. While the legacy systems have not been ready for this wave of change, this is a crucial time for committing to the virtual economy as the FinTech industry is breaching the $300 billion mark.
The payments industry is changing rapidly, and banks must prepare for new technologies, regulations, and expectations. Banks should look at their payment systems and explore the potential of cloud-based architecture. They must also collaborate with experts to find an apt API solution for their business. As the central banks are globally considering the opportunity to introduce CBDCs, the need for suitable technology partners cannot be overlooked. From payment processors to IT experts, solution builders are inherent in the payments industry. Let us discuss at length what the future of payment technology holds.
As the payments industry is experiencing a period of disruption, the future of payments is being shaped by new trends in the market that are corollary to consumer habits.
Regulations have changed significantly over the past decade to facilitate the safe transmission of electronic payments, from anti-money laundering laws to Know Your Customer (KYC) requirements for financial institutions. Regulators have created significant obstacles for businesses to navigate before launching/expanding into new markets or introducing new products into existing ones.
You want to be sure that your API solution will work in sync with the rest of your technology infrastructure so that payments can be processed seamlessly and reliably. Additionally, ensuring that any solution you implement is built on a foundation of trust and transparency, is vital.
When looking for a partner to create an API for you, it’s vital to find an organization that has experience working with financial institutions so they can understand what kinds of challenges are commonly faced and how best to address them.
When it comes to payments, the potential of cloud-based architecture is unparalleled. Cloud-based solutions can help with speed, flexibility, scalability, and security. They also reduce costs by allowing you to pay only for what you need rather than purchasing all of the hardware necessary to run your payment system. Payment-as-a-Service from popular FinTech platforms are built for cost and effort optimization by businesses.
Cloud technology offers organizations the following benefits:
There are three essential parts to an online payment system, namely the processor (third-party IT company), the gateway (middleman for data transfer), and the merchant (receiving bank account). When the payment process is outsourced, it becomes easily manageable, reduces the compliance burden, and is more secure. All you need to do is create a payment page with all the relevant payment options and integrate it with the processor. It’s a simple plug-and-play for most organizations these days.
A single platform is a must-have in the payments industry. The benefits of a single platform include:
The way we interact with our money is being reshaped by new technologies. Consumers now have an array of contactless payment methods at their fingertips, including:
If your payment technology is not ready for the future, you could lose out on valuable opportunities. The pace of innovation has accelerated due to evolving consumer behavior. So, both the financial institutions and merchants should prepare for new technologies, regulations, and governance. By collaborating with experts and exploring the potential of FinTech pillars (AI, Blockchain, Cloud architecture, Big Data), banks can get their payment processes together on a single platform to help them survive in tomorrow’s world.
If your organization is looking to integrate these technologies, we encourage you to reach out to our team of global payment professionals right away.
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