There has been a dramatic change in the way customers make payments since the outbreak of COVID-19. The payment providers also created innovative solutions to ensure reliable and speedy transactions. New technologies have also cropped up in the recent past across New Zealand and around the world, which have changed the way people make transactions. Here are some fast payment trends we expect in 2023.
Frictionless Payments Will Be Enhanced
Ecommerce websites and gaming platforms have been looking for ways to cut out customer friction in order to stay competitive. Customers are looking for online casinos with fast payouts and e-commerce websites with quick checkouts without compromising their security. Frictionless payments make use of data from apps, devices and websites to make transactions faster. This way, merchants reduce card abandonment, increase revenue and enhance the customer experience.
Some of the popular technologies in frictionless payments include the use of QR codes, contactless payments, mobile payments, recurring subscriptions, one-click payments and invisible payments. They feel like a natural part of the customer experience, eliminate waiting times, reduce the cognitive strain on the cardholder and lower the number of steps the user needs to complete a checkout. In 2023 and beyond, frictionless payments will be the new norm as online platforms enhance these benefits.
The Cashless Economy Will Grow Exponentially
The use of fiat money has been the main method of completing transactions. However, since the outbreak of the pandemic, there has been a change in how people use money. Most people turned to cashless payments after 2021, even in traditional brick-and-mortar stores.
It is expected that Europe will surpass North America in cashless transactions in 2023, reaching about $308 billion by the end of the year. New Zealand will also see an increase in the number of people who prefer to use cashless payment methods. While physical money will not be removed from the economy, its use will be greatly reduced in favour of online and card-based payments.
Contactless Payments Will be the Primary Method of Transaction
When card payments were introduced, one was supposed to enter the card in an ATM or related machine, enter the PIN and complete the payment. Unfortunately, this took time, especially where customers were checking out in brick-and-mortar stores and outlets. On the other hand, contactless payments just require users to tap their cards on sale terminals to complete payments. These payments are secure, safe and fast. They are commonly used with credit and debit cards, digital wallets, or smartcards.
This type of payment makes use of either near-field communication (NFC) or radio frequency identification (RFID). RFID matches or tracks individuals, while NFC transfers information between items in close range. These two technologies enable communication between the user’s card and the payment terminal. Most of the customers scan and pay using an app, followed by the card holders. In 2023 and beyond, contactless payments will be the primary type of online payment for checkout terminals.
Biometrics Will Ease Authentication
Biometrics have been built into most devices, especially mobile devices. They include facial recognition and fingerprint recognition and provide a quick method of authenticating the device’s user. These methods can be integrated into various phone activities that need authentication, including payments. They get rid of the tedious process of having to recall and enter the PIN every time one makes a transaction.
Many payment providers will adopt these technologies in 2023 and beyond and make them their primary method of authenticating users. However, the use of PIN numbers will not be fully eliminated. When signing up for their accounts, users will be asked to capture their biometrics or connect to the already-set ones. When making payments, they will have a choice of several authentication methods.
Traditional Payment Methods Will Include Cryptocurrencies
Crypto payments have been around for some time. They have enabled New Zealanders to make fast, anonymous and secure payments across the world. The popular crypto coins in New Zealand include Bitcoin, Litecoin, Ethereum and Dogecoin, among others.
Users use digital wallets to complete transactions with cryptocurrencies. However, many online payment providers have started to offer cryptocurrencies alongside the fiat ones. This means that New Zealanders will be able to complete payments with either digital or fiat currency using the same wallet.
Making payments this way is convenient and fast. It also gives users several options to complete their transactions. Besides, the use of fiat platforms for crypto payments will spur increased acceptance and usage of e-currencies across the country.
At the moment, New Zealand does not have established regulations on cryptocurrencies. However, the growing number of brick-and-mortar and online stores accepting these methods is increasing.
There Will Be Gradual Introduction of Smart Speaker Payments
New Zealanders are increasingly accepting smart technologies in their homes and workplaces. Today, it is easy to find homes with smart speakers like Alexa, climate and utility control systems like Nexus and Siri, along with automated water and robotic cleaning systems. Recently, a considerable number of people have started to use smart speakers to send and receive cash.
The use of voice technology to make payments is not widespread as people are still concerned about the security of the system. However, as technologies get smarter, it will be possible for smart speakers to verify users with greater accuracy. In 2023 and beyond, several payment providers may introduce voice-activated payments to their available features.
As computing technologies evolve, payment providers will be looking for ways of integrating them into their services to enhance their convenience, security and speed. Fortunately, the technology ecosystem is evolving fast. Therefore, innovations will come to digital payments in no time. Besides, social-economic factors will play a role in pushing some of the trends, such as contactless and frictionless payments.