Payments are an ecosystem in constant evolution. Small entrepreneurs and businesses may easily feel it difficult to stay up-to-date. However, to stay ahead of the curve, it is crucial to keep pace with the innovative technologies in this sector.
Four technology-driven shifts happening worldwide
To stay competitive, it is critical that entrepreneurs and businesses keep in touch with the major shifts in the payment sector across the planet. New technologies are bubbling and it is wise to learn from market practices from Europe to Asia.
Contactless cards are common in Europe and Asia
Contactless payment cards emerged around 2005 as a major payment application. It includes credit and debit cards. Contactless cards are embedded with integrated circuits that can store and even process data, as well as communicate with a terminal via radio waves.
Contactless cards have multiple benefits. They can be used for identification, authentication and data storage. They can be used with devices embedding a contactless reader technology like Time& Attendance terminals, parking, lifts, and point of sales, amongst others, In terms of business, they are a flexible and secure means of effecting transactions, requiring minimal human intervention. They are also engineered to be tamper resistant.
Contactless cards are used widely in Asia and Europe, unlike the United States which is still lagging behind. In Europe, for example, it is common now to use a contactless card to pay for the Tube, the bus or the train. It simply consists of waving the card instead of having to swipe a card or pay by cash. Nevertheless, contactless cards are generally used for small amounts of money.
Some examples of contactless bank cards are:
- ExpressPay by American Express
- PayPass by MasterCard
- Zip by Discover
- QuickPass by UnionPay
QR- Quick-Response- codes have become increasingly popular thanks to the mobile revolution. Unlike the traditional bar code, a QR code stores information in two dimensions, thus giving it the pixelated pattern. While the bar code is meant to be read by a scanner, a QR code is designed to be read by a mobile phone camera. One of the various uses of the QR code is to make payments.
To enhance the consumer experience, merchants are relentlessly looking for more and more convenient means of payment. Using the QR code is among one of them. All a client needs is his mobile phone with a camera and a mobile app that can scan, store and share QR codes.
There are three main payment types with the QR code:
The cashier enters the amount to be paid and the customer opens his QR scanning app to display his unique QR code to the retailer. The latter scans the code to identify the customer and deduct the money from the mobile wallet of the client, using a compatible mobile payment app.
Without QR scanners
In this scenario, it is the customer who scans the QR code on his mobile app to identify the retailer. He then enters the amount to be paid and completes the payment.
This payment mode is common for self-employed professionals such as taxi drivers, to pay rent or even to pay back a friend. In this case, both the person paying and the recipient open their QR scanning app. The recipient’s unique QR code is scanned, sum to be paid is added and the transaction is complete.
Alipay in China is the pioneer in the QR code payment. This mode of payment is also used by Visa globally in certain countries in Asia and in Africa.
Technology products generally quickly become obsolete. Merchants are caught in this vicious circle as they have to keep themselves up-to-date with the latest technology and see their existing technology products collecting dust. This is why software integration of payment systems can enhance existing systems to make the more future-forward and seamless too. As such, merchants can integrate the software into their existing systems rather than having to deal with multiple parallel modes of payments.
Going cashless as India
India is a great example of how the country de-monetized itself. Within a short lapse of time, mobile commerce expanded into the biggest payment cashless option, boosted by the creation of the start-up Paytm. The company currently prides itself in its 100 million registered users and transactions exceeding 60 million per month.
Related articles published in Mobile payment :
- Chinese tourists are adopting mobile payments for shopping abroad
- Expected trends in mobile payments
- Digital wallets as the payment method of the future
- Tips to choose the payment system best for you
Image : Shutterstock