Payment Innovations for the New Normal

Payment System

Payment System

The payments ecosystem worldwide has shown buoyancy amid COVID-19.

The outbreak of COVID-19 has a potential impact on diverse industries. To curb its effect, most businesses are now seeking to implement effective business continuity strategies. The payment industry is the one that also deeply impacted by the pandemic and should act urgently to moderate the damages customers, people, partners and payment businesses face. However, as the epidemic forced people to stay home and keep maintain social distancing, the global payments ecosystem has proven resilient with digital payment innovations.

In the very short time frame, COVID-19 has forced payment providers to make operating model changes, enabling them to prioritize greater flexibility and new short-term goals. Accomplishing this goal, several payment services providers turn to contactless payment, making money withdrawal and transactions more convenient and accessible. The rise of contactless technology is also contributing to growth in this trend. The technology typically allows customers to pay by tapping their cards to a point-of-sale terminal.

Countries like the UK is already using contactless technology. In the time of crisis, the contactless card payment limit in the country is being raised to enable even more payments to be made without any physical contact with either currency or a payment terminal.

Certainly, contactless payments are yet to really take off across the world, and COVID-19 may stimulate the adoption rate of this payment method. Even researches show that the use of contactless payments will see exponential growth as consumers are already using payment options like smartwatches, mobile phones and contactless debit and credit cards to prevent the spread or getting contracted to the virus. According to the report, almost half of the consumers in the United States in May reported using contactless payment methods at least four times, while 69 percent agreeing this option more convenient than cash. Most stores now are encouraging customers to use contactless as much as possible to lower the spread of COVID-19.

 

Voice-Enabled Payments

Voice-activated payments may offer banks and other financial institutions an opportunity to maximize the idea of creating their own brand identity. Already, voice- and artificial intelligence-powered devices have taken the world by storm. As advancements in technology and the rapid evolution of virtual assistants are becoming more intuitive with each passing day, the voice-enabled payment method is enabling users to transact money to their acquaintances using the peer to peer network. This can also improve the customer experience as today’s customers are increasingly leveraging voice assistants. Companies like Venmo, Square Cash, and Paypal, among others, are offering this payment method.

 

Payment Tokenization

The sudden outbreak of COVID-19 obviously has a deep impact on people’s every walk of life. But it also gives customers a good reason to be wary of public payments terminals. The outbreak has accelerated the adoption of tokenization, the process of digitizing a single physical payment card into several independent digital payment platforms using tokens. Digital wallets such as Apple Pay, Google Pay and others allow a payment to be made without even touching a card to a terminal or entering a PIN. It is expected that the use of token-based wallets is likely to grow in the near future. 

Businesses that don’t adapt to changing times and are not able to accept payments from digital wallets may lag behind their peers’ growth in the post-pandemic world.

Briefly, despite bringing major challenges to the corporate world, COVID-19 spurs payment innovations at large.