*Experts advocate the future of digital payments is designed to be frictionless and invisible as consumers seamlessly pay with their smartphones, watches, faces, or voices

Gbenga Kayode | 绿帽献妻

With new technologies in the world of payment systems, experts in the Financial Technology (FinTech) sub-sector of the economy have projected that cash is no longer king in a digital world where the experience is fast becoming more important than the transaction.

The outbreak of the novel Coronavirus (COVID-19) pandemic has caused several consumers to reevaluate their usage of physical tender as they embark on a journey of contactless and mobile payments, CyberNews report said.

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Audiences are said to have sacrificed traditional methods in exchange for contactless convenience as omnichannel purchasing became the norm in the marketplace.

Frictionless payment with a smartphone聽 聽 Photo: Hubspot.Net

A report by Gartner provided businesses with a timely reminder of why they need to transform their payment processes to build organisational resiliency.

In the merging order, both retailers and merchants quickly adapted to a new world of contactless payments, but where do we go from here?

And what digital payment trends can we expect to see in the months ahead?

The emerging world of frictionless payments

Time is consumers鈥� most valuable non-renewable resource, and many would argue it is the new currency.

The report noted a few years ago, a survey revealed that 87 percent of consumers would abandon their carts when faced with a long or cumbersome checkout process.

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Amazon famously simplified online shopping with its one-click checkouts, and over 74 million shoppers in the US pay $119 a year, not for a product but for convenience and to save time.

With Amazon Go, the online behemoth is now planning on using its shopping technology to skip lines and checkouts to grab and go, according to report.

It was learnt the first seamless experience for a consumer will quickly become the future expectation for every future transaction.

Consumers are already beginning to avoid traditional retail friction points, such as waiting in long lines and entering their PIN on a heavily used keypad to complete a purchase.

Uber is cited as another example of a company that has enjoyed a great success by making the payment process invisible in recent times.

However, observers regard this as just the beginning, and frictionless payments have already entered the mainstream.

For example, thanks to Internet of Things (IoT) technology, car parks can scan licence plates and automatically charge consumers鈥� accounts.

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Restaurants and bars are also increasingly using in-app pay services that enable users to place their orders without leaving their seats.

Experts indicate that these trends will continue to expand throughout every industry as online, and offline the payment process slowly winds down.

For retailers, these new expectations should fuel investment in technology that will help to reduce abandoned shopping carts online, improve efficiency at in-store checkouts, and increase consumer satisfaction in the process.

Role of mobile payments

Mobile payments are rapidly becoming the payment method of choice for both consumers and businesses, report stated.

It was gathered that when many people working from home at scale in 2020, there was a 72 percent increase in remote and mobile banking.

Referencing a recent report, it is noted that 54percent of all business-to-business payments in 2020 were completed using mobile banking services.

Whether in the office or a shopping mall, we are increasingly leaving our physical cards and cash at home as we continue to manage everything from our smartphones.

Flexibility of Mobile-point-of-sale technology

The mobile-point-of-sale (mPOS) technology is also creating opportunities for early adopting businesses who are daring to think beyond their brick-and-mortar location.

The flexibility of mPOS enables staff to break out of fixed checkout areas to serve their customers in almost any location.

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As the world begins to open back up, report says quick-thinking retail teams can increase their revenue with mobile services in concert arenas and trade shows, and take services directly to their clienteles.

Everything from buying a train ticket to grabbing a drink from a vending machine is increasingly completed by mobile payments.

As Gen Z begins to reshape the workplace and the world of retail, consumers can expect mobile payments to continue to go from strength to strength, CyberNews report stated.

Biometric payments

Over the past year, consumers reportedly have witnessed the mainstream adoption of contactless and mobile payments, along with a thirst for quicker and frictionless payment solutions.

However, the Achilles鈥� heel of digital payments is security, report said.

Remembering letters 3, 5, and 7 of cumbersome passwords is understandably not a big hit with consumers and a big reason biometric authentication is looking like an attractive alternative.

Many already unlock their smartphone and complete payment using facial recognition or by using their fingerprint.

In China, they have removed the device from the payment process to pay for food using just facial recognition. But I will let you decide whether this drifts too far into creepy territory.

Smart speaker payments

When was the last time you purchased something by speaking to a digital assistant such as Alexa?

Despite the hype, voice shopping without a screen is struggling to win the hearts and wallets of consumers.

Although voice is guilty of adding friction when shopping, voice commerce could play a role in how you manage your home finances, report noted.

In the process, consumers can already check their account balances, track their spending, or pay a bill with a single voice command.

More and more digital banking applications are beginning to provide similar functions as they jump on the voice payment bandwagon.

Paying an invoice using your voice while cooking your dinner certainly removes a friction point, but only time will tell if these new services are ready for mainstream adoption.

With an increasing hype around the tokenisation of payments, future payment trends point to DeFi (Deregulated Finance) as it continues to experience exponential growth.

Therefore, as regulators struggle to keep up with the pace of technological change, the report said costumers can expect a turbulent road ahead.

However, if DeFi can grow beyond basic applications, it has the potential to transform the financial world, according to report.

The FinTech revolution and the battle to redefine the payment experience are just getting started.

Incidentally, slow-moving traditional or conventional banks and card networks are accused of not adapting quickly enough to the changing financial landscape.

Report added that Amazon Go, Uber and Deliveroo have already set future expectations for a world of invisible payments.

As this becomes our standard expectation for other experiences, the future of digital payments is destined to be frictionless and invisible as we seamlessly pay with our smartphone, watch, face, or voice.

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