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Fintech - Advancement in Payment Solutions



Situation:


Recently, the traditional banking system has been diminishing, as the use of cash

has been reduced. Due to the pandemic, many businesses shifted to an online

mode of operation, where payment through cash was not feasible. Although local

shop owners continued offline, there was hesitation in accepting cash payments

due to direct contact. All this resulted in the need for new payment solutions

from the fintech industry.


Problems and Implications:


The traditional method of payment, i.e., cash was proving to be inefficient in

today’s automated world.


1. Fear of theft: With the increasing number of pick pocketers, there is an

increase in the chance of our hard-earned money being stolen. The fact

that there is no authorization required for the money to be used by anyone,

makes it more vulnerable to theft.


2. Harm to the environment: The manufacturing of notes involves paper, due

to which deforestation happens! Some cashless modes of payment like

debit cards and credit cards are made up of plastic, which creates a

negative impact on the environment.


3. Damaged currency notes: Since the currency notes are made up of paper, it

gets damaged easily, resulting in unacceptance of the damaged notes.

However, the damaged note can be exchanged with a proper one only if

the serial number of the note is not damaged.


4. Not user-friendly: In case, one forgets the wallet at home, he/she is unable

to make any kind of payment, leading to inconvenience for the user. It also

compromises hygiene and can act as a host for viruses and germs.


Need pay-offs:


A lot of new payment solutions are being developed in the interest of customers.

Currently, fintech is not only simplifying and optimizing payment solutions but

also helping people with their financial needs by issuing loans.


1. Tool less payment: Nowadays, smartphones, watches, cards, and wearables

are widely being used to make cashless payments, but involve a risk of

being forgotten at home. Therefore, biometric payments are being used in

many companies, to overcome this. Tool less payments will also lead to cost

reduction as no manufacturing cost of the tool will be required.


2. Buy now, pay later: This solution of payments helps the buyers to purchase

the product now, with the deposition of a small amount initially, and the

rest using installments. In this way, the buyers can fulfill their wishes, even

if their financial status is currently not appropriate.


3. Environment-friendly: The new payment solutions involve no usage of

plastic or any other material that will cause harm to the environment,

thereby fulfilling sustainability goals.


4. Security intact: With new technologies being used for payment solutions,

fintech ensures that the technology security level in payment solutions is

not compromised.


The fintech industry is continuously trying to emerge with innovative payment

gateways and attractive solutions to improve the quality of service and benefits

for the customers. The automated technology is helping them offer the best

financial services and create a pioneer in the banking ecosystem.

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