(Newswire.net — May 28, 2020) — Technological advancement is revolutionizing the way we perform the majority of everyday activities. Just a few decades ago, no one imagined that the internet would be so widespread, with billions of users worldwide. The global web cuts the distance between countries and continents, helping many to overcome obstacles.
Every industry is trying to adapt to modern technology. Today’s demand in every field requires the presence of digitalized products and services. They are usually much more convenient, smart, fast and easy to use. Moreover, digital platforms have proven to be much safer than traditional branches, particularly in the field of finance and banking.
Without a doubt, the financial industry is making some of the biggest changes to address the needs of modern customers. The portion of young people, millennials and Generation Z-ers, is increasing quickly and their spending habits are quite different from those of older age groups. Importantly, the youngest are expected to be the biggest spenders we have ever seen. Generation Z-ers total purchasing power is estimated at $143 billion in the United States alone, making them a target audience for almost every business.
The field that responds the fastest to increasing demands in digital financial services is fintech. The term itself simply is a combination of two words – digital and technology. However, it is not as new as many might think. The field itself nowadays covers a whole variety of financial areas, including but not limited to banking, payments, insurance, etc.
Although it was not initially called fintech, the industry emerged in the 1950s, when the first credit card was issued. These paper cards were rather limited and did not manage to spread into masses at that stage. Later, in the 1960s, the first debit card was introduced, which saw more people using cashless payment methods. Finally, the 1990s became the era of credit cards, the soaring trend of cashless payments. This period contributed a lot to shaping the way we pay today.
Later there were novelties such as contactless payment. In simplest terms, standard plastic debit and credit cards started featuring the ability to pay without physically touching the payment terminal. This became possible thanks to the Near-field communication (NFC) technology.
However, throughout the history of over 70 years, the biggest breakthrough in cashless payments is the invention of digital banking. Today, if your commercial bank does not support some type of digital payment system, it really is lagging behind. Mobile banking apps are used by customers of almost every major commercial bank around the world.
Solely technological companies, such as Google and Apple also introduced digital payment systems incorporated into technology manufactured by them. Apple pay, a flagship payment system by the company was launched in 2014 and now has over 380 million users worldwide. Such services further increased the efficiency and convenience of digital payment systems, attracting more and more users. Moreover, the overall trend is that more and more people turn to payment methods that do not include cash. Some are saying that the cashless future might be closer than we think. Some of the most developed countries already see the number of digital payments exceeding cash.
Despite the rise of digital payments and a visible preference of the general public to use cashless methods, some do not agree. Cash remains a primary means of payment for the majority of people over 60, even in some of the most developed economies in the world. The World Economic Forum, along with other influential organizations estimate that going cashless would potentially be detrimental for millions around the world. It would cut access to finance and banking for many people who primarily use cash.
Besides digital wallets by commercial banks and plastic cards, independent digital payment services, such as Paypal have also emerged. Many, due to the specifics of the field, prefer to use such platforms over traditional ones. They are particularly popular in Africa, as the Forex trading industry is vastly expanding. MPesa Forex brokers usually perform transactions using Paypal or other, local digital wallets, which are being launched at a high pace as the continent continues to develop.
What kind of payment method should my company incorporate?
First off, it is important to note that every business is specific, with particular approaches and a unique audience. Thus, the primary payment methods or ones you will focus on the most should be chosen accordingly.
Many business owners believe that amid the increasing trend of cashless payments, they should as well refuse using cash altogether. That is why we come across a growing number of cafes, restaurants and shops in major cities that have gone cashless or have announced plans to do so in the nearest future. This has also become a sort of a statement against physical money, targeting different audiences.
On the other hand, many old-style facilities refuse to use the majority or all of the cashless payment methods. Cash-only businesses lose lots of potential profit, particularly in developed nations, where the majority of financial transactions already happen through digital platforms.
The fact is that global purchasing power is increasing, thus, more and more people will be able to spend bigger amounts. Every already successful or future business should think about attracting as many users from social groups with different spending habits as possible. Market research is crucial for it to be successful. The world is a more diverse place than ever before and with such a great gap between the demands of older and younger people, as well as workers in a whole range of fields, companies should make sure that everyone can have access to their products and services.
If there is a payment method today, likely, it has its own user base. Cash is still used by many, debit cards are being quickly replaced by other digital methods, but they are here to stay for a long time. The introduction of new technology does not essentially mean that we should refuse using the older one, especially when so many people around the world are still highly dependent on them. Thus, the more payment methods your business offers, the better it will be for its revenue and profit.