As with most aspects of contemporary society, technology is ever changing. Modern society actively invents, designs, and refines the technological systems and processes that even a decade ago could be considered mere fantasy. Into which realms will the financial sector expand to next? What developments and advancements await the relatively recent concept of e-Currency?
Given the radically opposing schools of thought dividing Europe for much of the twentieth century, it would have been impossible for an average citizen – on either side of the political fence – to foresee the changes ahead. The creation of the European Union and the Euro brought together former antagonists, joining countries across the continent together within a single currency alliance. Though not without its opponents, the Euro is now an established and integral component of European society.
Likewise, changes in the realm of financial technologies facilitated the electronic currency revolution, in which money, in its physical form, has begun to be replaced by a digital counterpart. No longer does the population at large keep money in banknotes, preferring to instead have access to funds via bankcards. Technology continues to steam ahead, providing users with simpler, more convenient ways to pay.
As consumers become more familiar and comfortable using digital currencies, online businesses have also flourished. Many companies have shifted entirely into e-Commerce, whereby the physical presence of the business is no longer a requirement. Instead, products and services can be provided entirely via webpages or mobile applications, saving costs and becoming more efficient in delivering purchases to customers. This trend is visible across industries, from payments for goods on the Internet and utility bills to parking and medical services.
Largely seeking to cut excess costs and to save time, consumers and companies alike have undertaken the transition to e-Commerce. Individual users begin to actively seek out and use Internet services, whilst businesses across various industries rush to meet the demand new Internet users create. As a result of this radical shift, payment cards and electronic wallets have become popular, and are constantly undergoing development and redesign to better meet customer needs and expectations.
Despite the fact that society has largely accepted much of the digitalization that technological progress has introduced, consumers often remain wary of providing their banking details to e-Commerce websites. This hesitance has given rise to a plethora of alternative payment systems, which offer users the option of unifying their payment details into a single system, through which they can later pay for a vast assortment of services. The multitude of options through which to facilitate transactions to online companies encourages the consumer to select the payment system offering the best conditions for use, leading to fierce competition amongst the payment systems on the market.
Buyers of online products and services are, quite frankly, spoilt for choice. Over time, people have lost their fear of electronic money, now preferring to have their income deposited directly into their online bank accounts to be spent digitally. The broad selection of payment systems means that consumers choose based on the criteria most important to them – cost, security, and/or simplicity of use.
Payments are not the only process altered by the strides financial technology has made in recent years. Banks themselves must now also contend with new competitors. Non-banking institutions offer an excellent alternative to traditional banks, often even replacing the latter. Holding all the required licenses and certificates and guaranteeing a similar (if not higher) level of reliability and security, non-banking institutions have the advantage in terms of data transmission speeds. Services rendered by a non-banking institution are instantaneous.
The more methods of payment and the more financial services on offer, the greater the ease, speed of use, and reliability of services for the end-user. The developments within the financial industry and the technological progress of payment technologies suggest that the future of payments lies in electronic currency.
The steady rise in popularity of e-Currency, paired with the rapid technological development and disruption to established financial institutions and traditions, heralds a unified form of payment in the near future. Everything is heading towards a unification of payment methods, methods of control and of regulation. As with payment systems encompassing a number of banking details on behalf of e-Commerce users, unified payment seeks to bring together the nuances and processes of various payment methods.
While this shift is currently prevented by a lack of education and a certain resistance to further changes, time will slowly affect individual perspectives across the globe and unification will occur. Technology to facilitate this process will be developed, followed by regulation and the particular nuances concerning this type of innovation. A common consensus will take time, but following the introduction of payment unification technologies, consumers will begin to take advantage of the simplicity and efficiency of this service.
By Michael C.G. Charalambides, Regional Director of ECommPay.