5 digital payment trends shaping the financial ecosystem in 2021
By Leandra Monteiro
Though cash remains the king in India, the coronavirus pandemic has proved an accelerator for the adoption of digital payments. The year 2020 witnessed a surge in digital payments and contactless transactions in the country. With the support from regulators and banks, who are working to instill trust and minimise the risk of non-cash payments, 2021 will witness an increase in innovation in the digital payments industry.
Sujay Vasudevan, Vice President, Cyber and Intelligence Solutions, South Asia, Mastercard shared, “Mastercard has been tirelessly working towards making digital payments more safe and secure. The company has recently partnered with SBI card pay to make contactless payments at Near Field Communication (NFC) enabled point of sale terminals with just one tap on their mobile, without having used any physical credit card. The company came up with a card payment feature known as Identity Check Express which will allow customers to do uninterrupted transactions while shopping online. It is the next generation, mobile first authentication solution that will eliminate unnecessary friction and enhance the security of online transactions without the need to be re-directed to a third website to complete the payment process. Also, the company has been working towards ensuring safe digital payments by investing in predictive technology.”
Digital payments are gaining more and more traction with each passing day. In the coming years, we will witness more influence of futuristic technologies like AI, Machine Learning and IoT in developing customized digital payment solutions. Here are a few payment trends to watch out for in 2021 that will shape the future of the digital payment’s ecosystem:
Tap and go payments: Digital and contactless payments around the world increased in 2020. In India, even smaller cities, where the use of cash is massive, have also witnessed increased adoption of contactless payments. The benefits of paying with a simple tap are far beyond maintaining social distancing, as consumers will prefer to use it for many other reasons such as convenience and security. To promote contactless transactions in the country, RBI has enhanced limits for contactless card payments from ₹2,000 to ₹5,000.
Wearable payment devices: Wearable payment are emerging as a secure method for consumers to purchase products or services by using advanced technology integrated into their smartwatches, smart rings, and wristbands. The tap-and-go payment method provides retailers and vendors with more secure and error-free payment methods. According to a report by Allied Market Research, the wearable payments market is anticipated to reach $1.37 Trillion by 2027 at 21.7% CAGR.
Increase in e-commerce transactions: Due to the restriction on movement during the lockdown, people heavily relied on e-commerce for the purchase of groceries, health products and other essentials. Even now as the lockdown has eased, consumers prefer to shop online as they see the advantage of several choices, access to remote commerce and digital payments.
QR code payments: Payments via QR code will continue to prove its flexibility, especially in emerging markets, primarily because they are easy to use and inexpensive to implement. This type of payment is expected to be easier to use as it only requires an application that allows it to be used in one establishment.
Moving towards cryptocurrency: In the last year a lot more seriousness towards the alternative investment and payment class, cryptocurrency was witnessed. 2021 is predicted to witness a significant surge in investment banks embracing the crypto ecosystem. Cryptocurrency is touted to become the digital gold for millennial investors.
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