How Modern Payment Services are Redefining the Customer Experience

Since the dawn of the internet, it was very clear that things would never be the same again. We have witnessed a variety of advancements and developments across different sectors including the financial services, retail, and tech industries. These are among the most important aspects of modern human life as they define how we pay for goods and services. 

Today, trade and transaction are mostly done through online channels and on mobile. However, traditional channels are still a force to be reckoned with. They are expected to remain around for the foreseeable future. Thankfully, they have not been left behind when it comes to keeping up with the latest and greatest technologies.

Now, in addition to ensuring more opportunities for various businesses and companies, the other main goal of these payment services has always been to enhance the customer experience. This focus on the customer has been the driving force behind adoption trends in just about every sector and it is not going to change anytime soon.

But how exactly have all these developments impacted the overall customer experience?

More Flexibility and Choice

One of the best things about living in today’s digital-first world is the fact that they are so many options. This applies to just about every aspect of modern living. In the case of payments and finance, consumers have access to so many different payment services and platforms.

Thanks to the massive adoption of emerging payment innovations, users now get to enjoy greater flexibility. Most times it is not even about choosing some payment services over the others. Many consumers have opted for multiple services and platforms which they use interchangeably depending on what they are doing.

For instance, digital wallets are great ways for people to send money to friends and family. They are also still great for online shopping. Similarly, digital currencies are a great option for people who want to safely play online casino games. The casino and online betting industries, in particular, are always key considerations considering how aggressive the sectors are when it comes to adapting and integrating new technologies. This happened with e-wallets in the early days. It is now happening with digital tokens and the blockchain.

Safety

In the world of payments, safety has multiple dimensions all of which have a lasting impact on the customer experience. These can be boiled down to what the payments can expose the consumers to, how the payments are authenticated, and how various platforms secure the user data and funds.

The Explosion of Contactless Payments

To begin with, we have seen a massive explosion in the adoption and use of contactless payments all around the globe. In addition to being very safe and secure, contactless payments are all about minimizing physical interaction that may result in other unintended issues. Case in point, the past two years have seen a rise in the use of these kinds of payment mechanisms due to the COVID-19 pandemic. It proved to be a key contributor in the fight against the virus by ensuring little to no contact at physical stores and other places of trade.

Biometric Authentication

The next dimension of safety that is defining customer experience is user authentication. With rising concerns about the effectiveness of such things as passwords and PINs, it was very clear that we needed an alternative solution. That is where biometrics come in. Thankfully, biometric authentication technology has already made its way to the mainstream as part of computing devices such as smartphones, tablets, and laptops among others. Biometric systems are not only safer to use but are also very convenient.

Consumers no longer need to memorize or otherwise write down and compromise their passwords. Who they are is essentially all that is required to give them access to their funds and data. You could use your fingerprints, your voice,  your face, or even your iris to authenticate a transaction. This barely takes even seconds.

Active Safety Systems

The other dimension that has proven to be key to the customer experience is the mechanisms that payment and financial service providers use to actively protect their users. Issues such as cyber theft and money laundering are still quite prominent and there must be solid mechanisms to mitigate against them.

For years, it was all about the latest encryption technologies. Things have gotten more advanced today thanks to the integration of technologies like Machine Learning, deep learning, and Artificial Intelligence (AI). All of them have created opportunities for new revenue and monetization for the service providers. That is great for them but where does the consumer’s security come in?

Well, AI and deep learning have been key in the quest to institutionalize next-generation fraud monitoring and Anti-Money Laundering across the globe. Systems that have integrated these technologies are able to spot inconsistencies and act accordingly. Over time, they have gotten so much better thus ensuring the customers barely need to worry about being defrauded or having their personal information land in the wrong hands.

What Happens to Tradition Payments and Financial Operators?

It is pretty clear that the modern digital payments ecosystem is here to stay. While it is still evolving and there remains room for improvement, the adoption rate is very promising and is a true testament to its potential. Unsurprisingly, with all that to offer, the modern systems have proven to be a formidable competitor to the profitable legacy deposit and payments franchises.

Admittedly, there are still millions and millions of people who still rely on legacy or traditional systems. Some places even have e-Checks, for instance. However, there is simply no telling how long that will last in the very dynamic and fast-paced world that we are living in today. That said, traditional service providers that are unable or unwilling to adapt to the new realities will likely be forced to downsize. If not, things could even be worse and they would eventually be left behind completely. This is not a great spot to be in.

What Next?

The future is coming and it is approaching fast. It is therefore very important for institutions to future-proof themselves not just for their sake but for the sake of their customers as well. The experiences they offer are meant to get better and the best way of ensuring that is the case is by getting on board with the disruptive technologies that are creeping into every aspect of culture and business.

All around the globe we are seeing many central banks taking the initiative and responding accordingly. Having noticed the various disruptions it is not surprising that they have seen the sense in preparing for what is to come.

Speaking of what is to come, one of the things that many experts have projected will soon be a reality is the potential convergence of many of the existing digital payment services or systems. While different providers and businesses will have different operational frameworks and systems in place, tokenization is considered to be a viable solution to that fragmentation. We will just have to wait and see how these omnichannel options take shape.

Conclusion

All the changes we have seen in the financial sector and the impact it has had on consumer experience did not happen overnight. Fintech is slowly taking shape in more impressive than we expected. It is also great to see that a consumer-centric approach is guiding many of the shifts. All in all, we should brace ourselves for a very exciting ride to the future.