2020 has been a tumultuous time for businesses in every sector, but one of the legacies of the Covid-19 crisis has been a huge reduction in cash transactions and a big upsurge of making use of alternative payment methods, such as the use of online payment platforms. This trend is set to continue as businesses and customers see the benefits of making payments online. But, what other developments can we expect to see in payments industry in 2021 and beyond?
Artificial Intelligence comes of age
The acronym on everyone’s lips at the moment is AI or Artificial Intelligence. The effect of AI is being felt across every industry sector, but in the world of online payments it has the potential to vastly improve payments ecosystems for banks, payment processors, businesses and their customers.
The technology is already being rolled out in the form of chatbots, Smart assistants, such as Siri and Alexa, and new applications are in the pipeline. In terms of the payments industry, AI has the potential to greatly enhance the user experience (UX), reduce fraud, create new ways for businesses to interact with customers and personalise payment processes. Along the way, we can expect to see new, more efficient ways of carrying out transactions.
Beyond this, with digital payments set to reach record numbers in 2021, AI and Machine Learning will play a pivotal role in monitoring and analysing all these transactions, offering real insights for businesses in every sector. Which bring us on nicely to the next trend for the online payments industry – data.
Information has always been vital for companies in order to gain insights and make informed business decisions. Right now, there’s more data out there than ever before – far too much for humans to process. Which is where AI and ML come in. Artificial Technology has the power to collect, move, analyse and transform millions of pieces of data in seconds.
Two important areas that will benefit are security and authorisation. AI can convert this data into solid advice on why transactions don’t go through and deliver technical tweaks that can eliminate obstacles in the authorisation process and lower costs.
Look out for new tools coming from KoalaPays that can help you make better, more informed decisions when it comes to your business strategy.
The power of the digital wallet
The use of digital wallets (or e-wallets) and mobile payments is rising exponentially, overtaking traditional payment methods. Here, at KoalaPays we already offer these services to our customers, as this area is expected to become a major industry player in the coming years.
This is because digital wallets have the ability to store additional information such as loyalty cards, or driving licence details, as well as offer increased transparency and security when it comes to monitoring transactions. Two-Factor Authentication (2FA) makes it almost impossible for cyber-criminals to access accounts. And because e-wallet can only be used at specific retailers, they’re not subject to interchange fees imposed by payment networks.
For businesses, digital wallets are a valuable source of information that can be used to tailor and segment your marketing efforts for greater returns.
For all this to happen, consumers need to know that online payments are secure. After all, they are the ones who are driving changes in the sector.
Online payments have already become one of the most secure ways to pay and accept payments. However, new technological developments such as advanced encryption, biometric authentication, e-wallets and AI/ML will provide solutions that give customers the peace of mind to buy with complete confidence. Once they have that, they’ll make purchase decisions more quickly and buy more often.
Mobile payments are becoming big business, but we’re only at the start of the curve. Thanks to API and Open Banking, 2021 could be the year that mobile payments go mainstream. And talking of Open Banking, 2021 will also be the year that banks and the FinTechs create solid partnerships that see them combine their individual strengths to deliver better services than ever for customers and businesses alike.
While cash and payment cards are here to stay for the foreseeable future, online payments are set to become one of the most common ways customers purchase goods and services. Digitisation and moving to an online payment service provider will be invaluable for businesses who want to win new customers and gain new tools for frictionless payments and better business processes.