DIGITALIZATION MOBILE TECHNOLOGY

End Of Cash Payments Due To Corona?

CASH-PAYMENT

For payment service providers, the corona pandemic means that they have to develop themselves massively while at the same time processing larger transaction volumes. They are also exposed to greater competition and increased risk factors.

The Number of Cashless Payments Is Increasing.

Even before the outbreak of the corona pandemic, the transaction volume for cashless payments reached record highs. This is expected to continue. However, the pace is determined by the increasing dependence of cashless transactions on a simultaneously subdued global economic development. According to the study, the number of cashless transactions worldwide will likely grow by an average of 12 percent between 2019 and 2023. From 2018 to 2019, these payments rose 14 percent to 708.5 billion transactions. That is the highest growth rate in the last ten years.

The Asia-Pacific region even outperformed Europe and North America with its growth rate of 24.7 percent and was the region with the most cashless transactions in 2019 (243.6 billion). This increase is due to the increasing use of smartphones, booming e-commerce, the introduction of the digital purse (so-called “wallets”), and ​​mobile / QR code payments innovations. Leading here are China, India, and other Asian markets in Southeast Asia, with 31.1 percent growth.

More Competition Among Payment Transaction Providers

New entrants can quickly gain popularity as customers increasingly forego cash while their affinity for digital payments increases. The study results show that 30 percent of consumers use a BigTech for payment services, and 50 percent already use a Challenger Bank for some payments.

In addition, in April 2020, more than 38 percent of consumers surveyed said they discovered a new payment provider during the lockdown. Sixty-eight percent say internet banking and direct bank transfers were the preferred payment methods during the global pandemic. The contactless (tap-to-pay) card payment is second, which 64 percent of the respondents use frequently. Digital wallets (including QR-based charges) were the preferred choice by 48 percent.

Alternative Payment Methods Are Increasing.

Alternative payments such as mobile payments could fuel the cashless payment boom as consumers want more speed, convenience, and a better customer experience.

The use of digital wallets is expected to increase from 2.3 billion users in 2019 to four billion in 2024.

Hidden payments or automated payment processes like those found in Amazon Go and Uber stores are expected to grow by an average of 51 percent between 2017 and 2022.

The Risk of Criminal Acts In Payment Transactions Is Increasing.

Payment service providers have to deal with increased risks in various areas. Industry experts believe they are exposed to cybersecurity (42 percent), regulatory (37 percent), operations (35 percent), and business (30 percent) threats.

Eighty-seven percent of executives in this area rate the vulnerability to cyber attacks as having a high probability. The reason for this is criminals who exploit vulnerabilities that were made clear by the COVID-19 lockdown. This increases the risk of cyberattacks, money laundering, and terrorist financing. To reduce the risk, payment transaction companies are increasingly using technological means.

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *