The world of banking has experienced drastic changes, especially in the past several years. The internet has opened new doors of opportunity that have both consumers and retailers excited. Of course, there will always be customers who prefer to handle financial issues in person, but today, an increasing number of people enjoy the benefits that go hand in hand with online payments and banking.
All someone has to do is look at the changes that have already occurred to see that more are to come. With growing consumer and retailer demand, fintech solutions will keep pushing forward. In particular, more reliable and robust strategies allow for better online banking and payment experiences for both consumers and retailers.
However, there are many additional changes coming in the near future, which include the following.
Advanced Mobile Payment Options
Of all the changes seen so far, mobile payment options are without question the biggest and most impressive. As a perfect example, a unique program launched by MasterCard uses advanced biometric authentication. In lieu of numeric and letter passwords, an individual uses a selfie as a way of gaining access to online accounts.
Beyond selfies, MasterCard is exploring a number of other options. This includes things like cardiac rhythm, facial identification, and voice recognition. Regardless of new strategies implemented, the goal is to ensure that consumers, as well as retailers, have a safer and easier experience when conducting banking and making payments online.
Already, several options for mobile payments exist. One is a mobile app that allows consumers to purchase items from a specific merchant. As a secure app, data are only stored on the user’s device, meaning that at no time are data stored on the merchant’s device.
Benefits of Mobile Wallets
From the time of introduction, mobile wallets have had a positive impact on the world of banking. For instance, monitoring and tracking customers’ behavior is something that retailers can do. This gives them a huge advantage for making necessary modifications regarding the types of products and services that they offer.
At the same time, mobile wallets are extremely beneficial for consumers. Many experts believe that this payment solution will drive more people to physical stores for in-person shopping. Not only does that improve store sales, it generates a greater amount of revenue for businesses.
Apple was the primary company offering mobile wallets in 2014, but a year later, others followed, including Samsung and Google. Soon, Chase, Amazon, Walmart, and a host of other companies launched their own mobile wallets. This eventually trickled down to social media sites, like Facebook, that started providing customers with unique payment options for purchasing goods online and sending money.
As the number of changes increased, experts started paying more attention. Based on the newly discovered insight, they now predict that a volume of $500 billion for in-store mobile payments will be reached by 2020. Another prediction is that growth specific to making payments online will reach beyond what was initially envisioned. The fact is that rather than carry cash, more consumers prefer to use their cards and smart devices.
Streamlined Digital Remittances
Sending money around the world has never been easier thanks to digital remittances. Xoom, along with other startups, has shown a tremendous amount of interest in this online payment option. Founded in 2001, this San Francisco-based company has grown so much that it now ranks bigger than MoneyGram, which is quite a feat.
Alternative Peer-to-Peer Lending
Peer-to-peer lending is another change that continues to make an impact on the world of banking. Having achieved huge growth, this lending solution allows people to bypass traditional lenders and go with an alternative solution, one that offers lower interest rates. With such great potential, this is something that a number of innovators are involved with. For instance, Lending Club has originated loans worth more than $20 million since first being founded.
Great Potential with Blockchain Technology
Cryptocurrency and blockchain technology present great potential for both online banking and payments, with many people believing that tokenization will have the greatest impact on the financial sector.
Several startups, including Movile, recognize the value of the blockchain technology. For that reason, they are tapping into its potential. This is done by incorporating bitcoin. Along with allowing in-game purchases, this provides a mobile payment solution that is already used in several developing countries like Brazil.
According to supporters, blockchain technology is not only trustworthy but also completely transparent. Overall, this technology helps streamline the process of making payments online.
Impact on the Retail Industry
Something else of importance to the banking world is that beacons, big data, and sensors are expected to make some major waves for retail companies. With these three options, retailers have a better method for reaching targeted customers using customization in the form of coupons, promotions, and flash sales. For both consumers and retailers, a nice benefit is that these options make finalizing purchases ahead of time a reality.
Transferring with P2P
For a long time, PayPal has been the payment industry leader. However, with new opportunities on the horizon, there is a good chance that various startups will give this giant some serious competition. For example, Ozan.com is a company that offers a line of online financial products. Even better, this company does not impose transaction fees. Venmo is also a viable option for P2P transfers.
Sometime in the near future, many more changes to the banking industry will join those already implemented. As a result, online banking, as well as online payments, will be better for consumers and retailers alike. At the top of the list of concerns is safety. Therefore, cutting-edge security will always be the main focus. However, increasing the speed of transactions is also important since it improves the overall shopping experience.