Conventional mode of payment involving cash and manual skill of rapid counting of currency notes at mega retail stores is fast losing our sight, as we are facilitated by certain digital payment framework functions by a push of a button or through a card swipe. Clearly, there has been a great disruption occurred as Fintech industry continues to get inundated by evolving innovation in tech, but at swift steady pace. I quote Ms. Mei Lee Quah, who serves at the position Associate Director at Frost & Sullivan and thus comes with close optics about telecom and payment industry over the years. She opines, ”In this role, I mainly undertake market research and management consulting engagement for clients that are mostly telco or payment companies and regionally based conglomerates”.
In the light of growing trend of e-wallets and biometric payments, there has been a drastic shift in the way payment is made in return of goods and services, now which is steeply different to what used to be until a few years ago. Ms Quah is all full of hope about possible payment disruption to occur in coming years. While making a prediction, she says, “A cashless future will be inevitable”. For global citizens like us, to sneak into a cashless world, experts firmly believe that when printing, supplying and managing cash would become a tough job and a safe, secured and reliable electronic payment framework would prevail and it would be compelled to take ground.
Cashless payments phenomenon, that centres around our pockets is fast gaining ground across the world. Take the case of mobile mega market involving mobile based payment, which shows signs of great growth aspect which, Frost & Sullivan expects, is likely to get doubled by 2023. Considering Sweden, which is widely regarded as the highly cashless society where just 20% of overall economic activities involve cash as per what is observed by Riksbank, which is central bank of Sweden. Besides, New York Times reported that thousands of people in Sweden have got their hands impressed with microchips, through which, they can easily get a coffee by just waving their hand.
Even though there are present scores of different ways of implementing payment but Ms Quah maintains that society has seen particular surge with cards recently. She also believes if there were a payment method that could be utilized by commoners at length, “we would have been ready with a viable global alternative to cash years ago”. As cards cannot be pressed into service by all of us and whenever we want, it creates a vacuum for other payment methods to fill in the gap and e-wallets and carrier centric billing top the list.
In words of Mr. Saurav Shankar Singh, senior partner at IMA AppsWeb Solutions Inc, New Delhi, while working closely with leading financial institutions scattered across Asia, to develop applications meant for mobile payment, maintains, “In many Asian countries, e-wallets trend proliferates in a great speed, as even many Asian governments encourage it by making it acceptable standard of payment”. In fact, in case of China, such a market size has swollen to trillion dollar and prominent tech giants of the land, clearly Alibaba and Tencent also among top performers here. AliPay and WeChat are counted among the top and stiff competitors to Alibaba and Tencent, and former apps are commonly used in across China, but still, Mr. Scot UF, Director, Bright Brands Company, Hong Kong, feels the potential for scores of similar brands in such a monetary framework which he describes as “emerging market”. In his words, “If such companies that are proactive in certain regions, join hands to mingle efforts, whole of China including Hong Kong, would inch closer to accepting e-wallets and as an effective choice to cash acceptance on a massive global scale”. In such a cashless scenario, financial field is not the only one to get flooded with benefits, rather, functional tendency among enterprises would also get sharpened.
Ms Quah revisits to maintain, “Merchants should think beyond just accepting payments but also to how going cashless can impact their overall profitability”.
Shifting mind towards future we are fully equipped to easily presume that innovation would continue to race ahead while upcoming 5G technology will just act like a catalyst to it. Siding with the 5G technology, Mr Saurabh expressed happiness, “5G will give rise to many possibilities, use cases and business models and if enmeshed with payments, the communication technology will put customer relations on a differently new track and will also enable stiff competition among companies”. Clearly, when we feel the urge for lightning speed payment transfer, 5G technology holds the lever. In similar way, MasterCard, US based fintech company, proclaims that from April 2021 onwards, customers will be able to shop with biometrics, in a bid to identify themselves. Speaking on this, Mr Saurav Shankar maintains that when players like MasterCard initiate a decision, its impact is wide and deep enough to felt across the world and many other banks and finance companies will compete for a similar pie. He says on the issue, “mobile based biometrics will give place to mobile payments”.
Ms Quah rushes her thoughts on this, “we need more global first solution providers and we need local first solutions providers to partner locally, regionally and globally”.
Inter-operatibility should be a central theme while at the same time we need to cater to local behaviour, needs and preferences”.
Not mincing words, friends, cashless society is likely to unfold soon and which would emerge on lands such as Scandinavia as well as China at same time. In some years down the line, Mr Scot hopes that we are going to see less cash prevailing but such would vary from country to country, depending upon the relevant IT infrastructure and government regulations.
Mr Saurabh Shankar considers, “in the upcoming global payment market, my future perception is that it will get mingled with the society easily and that digitalization would prevail globally”.
While concluding, Ms Quah mixes her views,” To be able to do this, payment solutions have to closely meet the needs of the people that they serve and have to integrate seamlessly and securely with applications that bring the true convenience to consumers. The potential for the payments industry is much bigger than just replacing cash. It is an enabler of industry transformation, which we are going to see a lot more of in the coming years”.