Digital payments cannot take place without data. Data processing during digital payments is the key for transactions made on any digital platform.
Card payments, digital money transfers, POS payments are some of the most used digital modes that are gaining transactions across the globe.
Ever since the pandemic hit the world in March 2020, making payments through digital mediums has hit a new high in whichever nations where there is mobile and internet connectivity available.
With the pace of digital innovation happening, new business models have emerged giving opportunities to new players.
Check out some of these new digital payment options: contactless payments, open application programming interfaces (APIs), distributed ledger technology (DLTs), QR codes, biometric payments, and central bank digital currencies (CBDCs), which various governments are testing.
India leading the race
Payments via QR codes are becoming very popular in India, which is driving digital payments. As per an estimate, over $300 billion payments were made via this medium in 2021. Payments via this means will touch $1 trillion by 2026.
In 2016, only $61 billion of payments were made via the government’s Unified Payments Interface (UPI), an instant real-time payment system developed by the National Payments Corporation of India facilitating inter-bank peer-to-peer and person-to-merchant transactions.
According to Integrated Research (IR), the total transaction value in the digital payments segment is projected to reach $6,752,388 million in 2021, which is expected to touch $10,715,390 million by 2025.
In 2021, the market’s largest segment is digital commerce and is projected to be worth $4,176,874 million in 2021 total transaction value.
Total transaction value is expected to show an annual growth rate (CAGR 2021-2025) of 12.24%.
One of the benefits digital payments provide, IR said, is that it saves cost and provides transparency and security in the society. Digital payments are easy to use and it also lowers transaction costs and most importantly, brings in people based in rural and interior parts of the nations to financial folds, who were out till now due to various challenges faced in the financial sector.
In the world of big data and artificial intelligence, companies want to understand the pattern of payments made digitally. They want to determine which products or services are more likely to be paid for digitally.
What are the age groups that are comfortable with new forms of payment? What is their educational background? How many users are using social media, what they consume on the web, and how they use it.
How much time they spend on the internet, their browsing history, and their search pattern. These are all information marketers wanted to use to make products and services that can be a huge hit among these people.
Many web platforms that already have billions of users have also started their own digital payment services, like WhatsApp, Apple Pay, Amazon Pay, and many more. they could start these services looking at the pattern people were using the digital medium as the preferred medium to make payments without any issue.
However the biggest challenges marketers face today is even after doing all these, do they have the accurate data. AI and machine learning can help them solve these problems. Other payment options are also becoming increasingly popular, such as crypto payments.
Among the buzz created by cryptocurrency is the ability to make payments, as it has no central authority and is not controlled by any corporation or government.
It is built on DLT and Blockchain technology that never goes down, as it is controlled by communities.
In the future, digital payments will be made via blockchain technology, which will be backed by various crypto projects that are already working to solve various problems in the financial sector.
Follow me on twitter.com/TokenBharat
Disclaimer: This is not financial advice. Do your own research. Consult a professional investment advisor before making any investment decisions.