Digital Payment: Catching the Upcoming Trends

As the world has become more digital, there are increasing options for payment methods. The advancements in technology have boosted the development of digital methods. This kind of digital payment makes people’s lives easier by providing convenience, efficiency, and secure methods of their payment.

More specifically, retail payment has experienced significant growth and transformation in recent years.  The use of cash has declined while there is an emerging trend of new digital payment in the retail industry. Besides, it will provide a precious opportunity for billing software development. The article will provide you with what digital payment is, its benefits, and digital payment methods in retailers.

Digital payment: deeper digital engagement for customers

What is digital payment?

Digital payment is a transferring process of value from one payment account to another. Users can use digital payment through digital devices such as mobile phones, point of sales, and digital channel communication. This definition of digital payment can be made with bank transfers, mobile money, and cards. There is no complete definition of digital payment since digital payments might be partial, primary, or fully digital. For instance, a partial digital payment allows both payer and payee to use cash through third-party agents. A primary digital payment means that the payer sends payment to an agent; however, the payee receives cash from that agent.

Benefits of digital payment

Digital payments have brought significant benefits to retailers such as cost savings, financial inclusion, and data security.

Cost savings is one of the best benefits of digital payment in the retail industry. According to Better Than Cash Alliance, a report shows that the Government of Peru saved $96 million by using all governmental payments. It would help reduce payment time and promote efficiency.

Transparency and security are other benefits of digital payment that you might know. This digital payment method can enhance transparency and security, which reduces corruption and thefts. When introducing billing software development, people always emphasize transparency and security for users. For instance, a recent report proves that there is a risk of individual purchasing clerks in the value chains owing to the prevalence of cash.

Financial inclusion: Organizations can easily access a wide range of financial services such as savings accounts, insurance products, and credit. So financial inclusion is one of the benefits of digital payment to any organization. Software outsourcing services usually emphasize the functions of financial inclusion when developing custom software.

Growth expansion: With this benefit of digital payment, organizations can open more business opportunities for the financially excluded. Besides, digital payment methods can enable a more efficient flow of economic resources.

Most popular digital payment methods

Digital currency electronic payment

A digital currency is a kind of money that only exists as electronic data. This digital currency electronic payment can be like regular money; however, it has no physical form and implements digital transactions from any place. Consumers can execute all digital currency electronic payments using electronic money.

The Bank for International Settlements defines e-money as prepaid payment mechanisms for executing digital transactions via POS terminals, direct transfers between two devices, or an open computer network. Some examples of e-money are bank deposits, electronic fund transfers, etc. Electronic currencies have two forms including soft currency and hard currency. More specifically, soft electronic currency allows digital transactions to execute its payment such as Paypal and Credit cards. Meanwhile, the hard electronic currency can be Western Union or Bitcoin.

Different digital payment methods

Credit and debit cards

Amongst different digital payment methods, digital payment uses credit and debit cards is the most common way. Credit or debit is a card sliding into a payment terminal, which will charge a specific amount of money in a digital transaction.

Many cards have near-field communication (NFC), which boosts the payment process without the card being exposed to the POS terminal. It is considered as contactless payment in many industries. Recently, people have started using virtual cards on mobile apps of the banks and other mobile banking platforms, for example, wallets by Apple or Samsung. These virtual wallets connect with watches and other mobile devices to executive digital payments in many fields, for instance, in retailers.

Mobile payments

Besides using watches, more and more people prefer executing digital transactions using smartphones. They use banks’ online services to purchase goods and services with virtual credit or debit cards. Billing software development companies introduce custom apps for online services in which the payment cards can use near-field communication technology or scan QR codes. Moreover, this digital payment method can allow people to transfer their money through Paym (UK) or Bizum (Spain) that retailers now accept.

QR digital payment method 

QR digital payment alternative is convenient, fast, and safe for consumers. People open their banking custom apps and scan QR codes. After that, they can choose which digital payment method they want and confirm their payment.

Supperapps 

Billing software development firms have offered mobile apps for many things including payment methods. For example, these custom apps allow customers to reserve a specific item at an establishment to select later. Then, they will show customers’ point cards and QR codes for payment when scanning their barcodes.

Smart speakers

Smart speakers or home assistants like Apple HomePod and Amazon Echo can make payments through voice commands. These smart speakers allow customers to transfer money from one to another. The figure for digital payment trends has reached 77.9 million users by 2022 from 18.4 million users (2017). Owing to security issues, smart speakers allow customers to make a unique voice pin using a custom app of payment to make transactions.

Top digital payment trends for all retailers

The advancement of digital technology has reduced costs at a double annual growth rate. Besides, it leads to new business markets and a competitive business environment. Here are the top digital payment trends for all retailers while running their businesses.

Contactless payments — An emerging digital payment trend for all businesses 

Contactless payment is a secure payment method applying a credit or debit powered by Radio Frequency Identification or near-field communication. This digital payment method is gaining popularity owing to its seamless experiences and speed.

Open application programming interfaces

It is an available API that provides software developers with access to a proprietary software application. Moreover, an open API will allow retailers to build extra services based on existing infrastructure. This digital payment method helps lower barriers to entry for newbie financial technology firms. It encourages innovation and boosts the emergence of seamless digital payment services for end-users.

Distributed ledger technology

It is one of the digital payment trends using distributed ledger technology. This is a database consensually shared and summarized across many sites, locations and departments. Billing software development firms use distributed ledger technology in developing custom software of digital payment to solve the problem of trust. Since all members have a copy of the ledger within a network, DLT approves a decentralized digital payment method. It does not rely on a single central payment system such as a bank or public organization.

QR codes – One of the most common digital payment trend up to now

QR code, also known as Quick Response code, is a two-dimensional barcode or square-shape code that stores data. The QR code has gained popularity for its quick and easy approach to exchanging information. Furthermore, this digital payment method has the potential to reduce payment costs for organizations. Retailers will put a digital device with a camera linked to a payment account to enhance the payment process.

Biometric payments – a digital payment trend using biometric ID

This digital payment method uses biometric ID as an approach to verification and authorization of the payment process. The biometric ID identifies human faces by evaluating one or more of their biological characteristics. Unique traits include fingerprints, earlobe geometry, retina, voice waves, DNA, and signatures. Thus, billing software development companies often use biometric ID when developing their custom software for billing purposes.

Central Bank Digital Currencies 

Central Bank Digital Currencies is one of the most convenient digital payment trends. Global market economies have changed to intensive practical development from conceptual market research. So using Central Bank Digital Currencies enhances the payment process a lot.  The Central Bank Digital Currencies is the fifth of the world population reporting that they will issue the first digital currency in the upcoming years.

Conclusion

Digital payments will become a reality in the next few years. We will see how digital payment methods will change from physical cash to digital payment. Digital payment has experienced emerging trends that will appear or disappear due to their usage and security. With its advantages, digital payments have boosted the development of retailer chains.