The Covid-19 pandemics has taught many businesses, financial institutions, and companies that digital platforms and technology can be well utilized for cashless transactions. Restrict movement and lockdown in some cities have hindered customers flocking into the street to buy stuff or eat-in restaurant, prompting many businesses to opt for online and E-commerce platforms to stay afloat.
The pandemic has highlighted the importance of digital capacity, which has served as an additional catalyst in an already fast-changing payment industry. We are confident that this new reality will persist and only progress. Following the pandemic, some experts were asked to report any trends, and the following are some forms of payment that have come up due to the pandemic;
- Buy Now, Pay Later (BNPL)
BNPL’s name is pretty self-explanatory. During the pandemic, it is widely regarded as the most developing payment option. Customers can purchase items through BNPL before paying for them. Although it has been a massive success in recent years, many people have criticized this payment method. This method of payment is unlikely to go away completely. However, as more regulations are imposed on the industry, growth will likely slow.
- Fintech and Incumbent Partnerships
Fintech is a technology and innovation means of payment. It is an emerging technology that seeks to automate and improve the use and delivery of financial services while competing with traditional financial methods. This technology is primarily used to assist consumers, entrepreneurs and businesses to improve the way they manage their financial lives, processes and operations, through customized software solutions and smartphone algorithms. Customers can play an essential role in ensuring Fintech has access to banking frameworks. The combination of Fintech and Incumbent Partnerships will help improve some of the currently lacking services; this is because it is not one-sided and that many banks will recognize the importance of this type of partnership and have plans to expand it.
- Embedded Finance
Embedded finance aims to allow non-financial services companies to provide banking services. A non-financial service provider, like a ride-sharing company or a retailer, merges with a financial service provider, like a bank that offers money lending services or payment processing. One example is Uber, which has helped its customers pay for Uber directly from your linked account, eliminating the need to pay with cash or a card. In addition, Uber has also launched its bank, Uber Money, which gives drivers real-time payment access and a Visa debit and credit card.
Request-to-pay is a new payment method that involves a ‘pull’ rather than a ‘push.’ Instead of sending your money to the billing provider, the company will ask for the amount it needs to pay. When you buy something, you’ll get a payment request and an offer to pay for it. All you have to do now is approve the notice, and payment will be automatically deducted from your account. This would provide customers with a convenient payment option.
- Use of AI
AI models can analyze consumer behavior and automated processes more effectively and efficiently than humans. AI is especially beneficial to payment companies because of the large amount of data they collect. With its incorporation into businesses, it can lower costs while also lowering error rates. These abilities are essential in a world where money laundering is on the rise. Many banks have struggled to regulate money laundering on their own, and AI can help.