The coronavirus pandemic is forcing societies to move towards an increasingly digital environment. This shift is resulting in some fintech sectors like online payments to see a surge in growth. But what does the future hold for this fast-growing industry? Well, it’s tough to make predictions, especially about the future. But here are four of our predictions on what we believe will happen to the payments industry within the next five years.
- The Rise of Buy Now Pay Later (BNPL)
The COVID-19 pandemic has led to many consumers seeking payment options that offer more convenience and flexibility. This demand has recently seen the BNPL industry experience explosive growth and forced market players to provide flexible paying solutions.
BNPL works by allowing merchants to offer instalment payment plans to their customers. They benefit both merchants and consumers. Merchants can increase scale and access new revenue streams, whilst consumers receive an appealing alternative to higher interest rate credit cards.
This payment solution will only increase in use over the coming years, and they look set to have a significant impact on the credit card industry.
- Increased Use of Biometrics
Consumers are becoming more concerned about security and theft, which is understandable given that card payments can be susceptible to fraud. A solution to this is using biometrics to confirm the buyer’s identity, rather than using a PIN number or password. Not only would this make purchases more secure, but it would make the entire payment process faster, too.
A recent study by Fingerprints revealed that 56% of shoppers would prefer using a biometric sensor on their payment card instead of a PIN, highlighting the growing demand among consumers for more secure payment solutions. We can expect this space to evolve throughout the coming years.
- Payments to Be Done Be From a Mobile
The pandemic is forcing many of us to limit our contact and interaction, which is why mobile payments represent such a great solution. They are easy to use, faster, safer and more secure.
With mobile payments we can manage our money anywhere and at any time. As they become more commonplace and customer-oriented, mobile payments will play a significant role in the future of finance. The rise in mobile payments could make the likes of plastic cards and cash a thing of the past.
- Digital Currencies May Replace Traditional Ones
Over the last few years, we’ve seen a plethora of new digital currencies hitting the market, with Bitcoin and Ethereum being the most notable examples. However, big-tech companies are also entering the space with Facebook and Google announcing they will introduce their digital currencies.
Digital currencies are appealing for merchants and consumers. With low transaction fees, quick settlement and more security, they make a great alternative to cash. Will they replace traditional fiat currencies? Maybe. Only time will tell. However, in a few years, we can undoubtedly expect more businesses and banks to launch their own new form of digital currency.