The Evolution of Payments As We Know It
When it comes to financial transactions, and payments, in particular, evolution occurs at a constant and rapid pace. New ways of conducting and processing payments keep being discovered year after year, and who says we are finished? There is, even more, to expect, as far as the future of payments is concerned.
The outbreak of the COVID-19 pandemic in early 2020 contributed to the acceleration of the digital revolution. It changed the way businesses accept payments, as well as the payment methods consumers are comfortable using. Service providers and consumers are now a lot more dependent on digital payment methods, and the need for physical contact in effecting financial transactions is gradually being dispensed with. According to Statista, the total transaction value of global digital payments is projected to reach 6,367,356 million Euros in 2022, and ultimately projected to reach 8,648,102 million Euros by 2025.
Payment is set to assume new dimensions in the near future, and here are some of the ways in which this paradigm shift will manifest:
- Payment solution providers that can effectively use transactional data will have a competitive advantage. Transactional data uncovers an abundance of new opportunities, including preventing fraud and streamlining financial planning for corporate and end consumers. Businesses will increasingly see the importance of payment data insights, and consumers will agree to share more data if it means they can pay less for goods and services.
- Businesses will have to come up with frictionless payments to stay competitive. Frictionless payment involves the use of data from websites, devices, and apps to ease the process of buying and selling. Frequently used frictionless payments include contactless card payments, QR code payments, mobile and digital wallet payments, recurring payments or subscriptions, invisible payments, in-app payments, and one-click payments.
- Consumers will continue to opt for contactless and cashless alternatives. Thanks to the pandemic, there has been a growth in e-commerce and increased card payments on a global scale. The use of cash in financial systems will further decrease.
- The use of digital wallets will increase by huge margins. Retailers will move the point of sale (POS) from a permanent physical location to a mobile experience. More and more people will conduct transactions from their smartphones, so the need for physical contact between service providers and consumers will reduce even further.
- Over the next decade, real-time payments will be the norm in worldwide markets. The difference between domestic and cross-border settlement systems will shrink and provide benefits to merchants, including funds being immediately available.
Current Payment Trends To Look Out For
There are a few trends currently influencing the direction of payments as we know it today. These include:
- Buy now, pay later: This trend has taken the world by storm over the last few years. People are now able to spread out costs and still get everything they want, when they want it – often with zero interest.
- Buy now, pay less: The loyalty schemes of old are making way for a new generation of smarter solutions that offer a win-win-win for members, merchants, and loyalty programmes alike.
- No-contact transactions: Contactless payments involving card readers are going nowhere in 2022, but the growing popularity of digital wallets means that no-touch payment technology is increasingly popular.
These trends are here to stay, and they are clearly set to revolutionize how payment works on a global scale. The next few years will be interesting as it relates to payment solutions. Consumers want ease and speed, and service providers have their work cut out in terms of catching up.
How Paga is already easing into the future of payments
In terms of the future of payments, Paga, one of Africa’s leading payment solutions, has already taken concrete steps to stay ahead of the game. Some of the future manifestations of digital transactions involve recurrent payments as well as digital wallets, and Paga already has those in its current lineup of services.
With recurring payments, Paga allows you to set up your account in a manner that it will be debited a specific amount at a specified time of the month for a particular service. It’s like a bank’s standing instructions, but for e-wallets. For instance, you can have your account debited for the sum of N10,000 on the 26th day of each month for electricity bills.
A recurring payment is designed to take away the burden of initiating a regular payment while ensuring you do not miss the payment. It is simple to set up. To do this:
- Log into your Paga account
- Select “recurring payments” from the list of services
- Create a new recurring payment
- Select the service you want to create a recurring payment for
- Fill out the details of the recipient/beneficiary
- Set up the schedule and fill all required fields
- Review the details and confirm the transaction.
With respect to digital wallets, Paga acts as a mobile wallet where any user equipped with a mobile device can conduct financial transactions. It is easy to use, it is secure, and transactions are conducted speedily.
You can fund your Paga e-wallet in either of the following ways:
1. Transfer from a bank account directly to your Paga account. To do this:
- Log in to your internet banking
- Select “transfer to other banks”
- Insert your account number
- Select “Paga” as beneficiary bank
- Input amount
- Fill the required field on the transfer page
- Input your PIN and complete your transfer.
2. You can visit mypaga.com and deposit money into your Paga account from your ATM card. To do this:
- Click on “wallet” under My Paga
- Click on “add cash”
- Enter amount
- Select card as a payment option, then click on the deposit tab that will appear below
- Enter your card number, expiry date of the card, and the CVV at the back of the card.
- Input your PIN, click “deposit” and follow the instructions to fund your wallet
3. Visit any Paga accredited agent to fund your wallet.
The future of payments is upon us, and it’s imperative that service providers step up their game and reinvent themselves, while at the same time guiding their customers through the new wave. The future leaders of the financial services industry will be those who, like Paga, anticipate new trends early enough.