Fintech and Banking industry witnesses New Dimensions of Digital Payment

Digitization has brought about a remarkable change in the Banking Industry. We no longer have to wait hours in the queue for a simple transfer or transaction of funds. The rapid expansion of digitization has made these services swifter and hassle-free for customers. Banks are now using UPI and similar services to expedite the entire chain of Banking processes and make it more efficient for their customers.

However, conventional Banks being a trust institution and risk-averse, have not lagged behind their private counterparts in converting the entire chain of processes into more user-friendly experiences. That is exactly where the concept of Neo Banks comes into picture; complementing the traditional Banking channels. Their cutting-edge and next-generation technology has helped traditional Banks to retain their customers by providing them a more accessible interface for their Banking needs, thereby, enhancing the quality of their customer-friendly experience towards banking.

With more and more individuals turning towards digital applications for their regular Banking needs, Neo Banks have become the need of the hour for traditional Banks to partner with. Partnering with Neo Banks has helped conventional financial institutions to offer more flexible and personalized experiences to customers. With technology at their disposal Neo Banks are here to stay and are pegged to grow at a CAGR of 46.5% globally by the end of 2026. That said, it is safe to say that Neo Banks are a need of the hour if you have to transform conventional Banking to a more transparent, nimble, and seamless digital experience.

Few Interesting Trends of 2022

BNPL : FinTechs have not only eased the user experience but have also helped Banks to offer easy purchase solutions to consumers with their buy now pay later scheme. COVID-19 brought global economies to their knees, making it twice harder for individuals to meet their daily needs. However, with the introduction of the buy now pay later (BNPL) solution, individuals have been able to tide over their financial predicaments smoothly.

One of the most remarkable features of BNPL is that, customers without having a credit card become eligible to avail of this service within a tap or two, compared to the long-drawn process of securing a loan. The option of BNPL is applicable for a varied range of products including appliances, vehicles, travel, and the likes which have made it extremely feasible for individuals to afford these products and services.

Wallets: Its as simple as a wallet that exists on your smartphone instead of in your pocket. A mobile wallet is literally a virtual wallet that holds card information for a user directly on their mobile device. It can manage everything from credit cards, rewards cards, and memberships. Consumers are increasingly turning to mobile wallets due to their convenience and ability to reduce fraud. Payment wallets in India have made online transactions of money easy and fast, with its one-tap feature and quick processing, all at one go.

Open Banking: The financial services landscape is being redefined by disruptors in the FinTech industry. Financial service firms that want to thrive must consider embracing Open Banking APIs. Application programming interfaces (APIs) allow legacy banks to share data and information amongst one another through a third party application. APIs are used for any company (B2B, B2B2C, BaaS to embed its products into a nonfinancial company’s platform.

Traditional went through a tremendous amount of change to offer better and cheaper services to the customers. Banks have to be digital savvy avoid being dis-intermediated by new entrants with superior offerings and services.
Offline payments : Offline payment is taking a new turn in the financial sector. Reserve Bank of India’s recent directives to financial institutions on offline payments including pilots is an indication that the central bank has finally decided to act upon an issue that has been plaguing the payment industry for long i.e. data connectivity. They have recently issued a framework allowing offline payments up to Rs 200 per transaction, subject to an overall limit of Rs 2,000.
Under the offline mode, payments can be carried out face-to-face (proximity mode) using any channel or instrument like cards, wallets, and mobile devices. An offline payment refers to a transaction which does not require internet or telecom connectivity to take effect.
Biometric Authentication: In laymen’s term it uses biometrics to detect and authenticate the identity of the user trying to access a mobile app. It can be performed using multiple ways including fingerprint readers, facial recognition, voice recognition, and more.
In an increasingly digitized world, password-based authentication is no longer sufficient to secure applications and software tools. In recent years, a majority of data breaches and hacks have been attributed to configuring weak passwords for user accounts.
To sum the FinTechs in India with their innovative ability and entrepreneurship has contributed a lot by helping the country surmount the reality of poor internet penetration, bandwidth issue & availability.

The authored article is written by Mr Ambarish Parekh CXO of paycraft and shared with Prittle Prattle News exclusively.

Related Posts

1 of 186