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.