Fintech has revolutionised the way in which we utilise our money and pay for purchases. Start-ups today are gradually putting an end to the usage of physical cash, instead offering convenient alternatives for consumers – who, in this day and age, value speed and less time-consuming services. A TSYS survey in 2014 revealed that only 9% of Americans surveyed preferred paying in cash, whilst the majority preferred cards – proving that cashless payments are only on the increase.
Therefore, whether you are just a fintech enthusiast or seeking to make use of fintech technology, here are a few things you should know about cashless payments:
– Digital wallets and their popularity show no sign of slowing down
Companies and applications are quickly jumping on the fintech bandwagon, with digital wallets gaining traction in recent times. PayPal, the peer-to-peer payments company, paved the way for the usage of online money transfers between users, offering a quick alternative to checks and money orders. Although the company faces challenges regarding newer alternatives that have gained popularity, such as Bitcoin-powered payment methods, PayPal’s success has surged. In 2015 alone, transactions using the platform totalled $282 billion.
Bluetooth and NFC technologies are also being used to enable payments through smartphone applications – both online and at physical stores – by means of bank account/credit card credentials being linked to a digital wallet and mobile devices being used to complete the transaction. Meanwhile, Android and Apple provide digital wallet services through Android Pay and Apple Pay, respectively.
– Regional trends play a part in technology
Although credit cards account for the majority of transactions in Europe, the same trend may not take place across all of the continent. Sweden and Finland, for instance, mainly make use of debit transactions for most non-cash payments. Banks in the two countries offer real-time online banking facilities, easing the process of fund transfers and expanding on the need for services which would complement this trend accordingly. On the other hand, Asia relies more on online connectivity, resulting in a market which would benefit from non-card-reliant services.
– A wider variety of payment methods are on demand
Consumers are now demanding that a greater option of payment methods is made available. The shopping cart abandonment rate, which stands at 68.3%, is mainly due to buyers realising that they are unable to make use of their preferred payment method – proving that businesses are expected to cater to a wider audience. This does, however, mean that additional costs may have to be considered when compared to the possible profit acquired from successful transactions – which would require an analysis of one’s target market and its preferences.
The cashless trend is on the rise, as more consumers are drawn to the convenience it brings along – whilst companies are creatively introducing new methods to handle money. Keeping oneself up-to-date with the current trends and innovations has not only become extremely beneficial, but also a necessity.