Payment methods for a new age
A recurring theme in our blogs this month has been the effect of digitisation on payments. From keeping your personal information safe to invisible banks, we shed some light on what it means to pay in an increasingly digital world. What’s clear is that change is on the horizon, and it will be for the better. Indeed, the digital revolution is improving the way consumers interact with payments.
Here are some of the highlights of what we covered in February.
The more things change, the more they stay the same
Newer payment alternatives, such as mobile payments, are usually presented as dangers to the popularity of cash and card, but the numbers tell a different story. Cash is still the most favoured payment method worldwide and payment cards are predicted to total 22 billion by the year 2020.
This means that while ATMs and POS (point-of-sale) systems will have to evolve to remain relevant, they won’t be made obsolete. In fact, the ATM has a vital role to play in self-service banking. It has already evolved to keep pace with technologies such as near field communication (NFC) and biometric authentication. The same can be said about point-of-sale devices and systems.
Get ready for AI
Whether it’s Stephen King warning us against it or Elon Musk urging us to lean in, everyone is talking about artificial intelligence (AI). It’s the technology behind first-person shooter video games, online customer support as well as video surveillance, but it’s also making some interesting contributions to the financial services sector.
KPMG predicts that AI will make banks completely virtual within the next 13 years, but even before that happens, AI will cause a lot of disruption in fintech and payments. In the US, human traders on the stock market are already competing with computerised algorithmic traders who aren’t prone to errors or being fraudulent. In South Africa, Absa has had success with its Facebook Messenger and Twitter ChatBanking which makes use of AI. Fraud detection, machine-to-machine payments and blockchain systems will also benefit from AI.
Don’t let your guard down
Hopefully artificial intelligence can eliminate cybercrime, but until it does, we’ll have to rely on keeping our wits sharp in order to protect the security of our personal information. A good place to start is to stop assuming that you’re too smart to fall for a scam. Cybercriminals are improving their tactics, and sometimes they fool even the most tech-savvy targets.
It’s non-negotiable. Responsibility in the digital age means taking strict precautions when you shop online, bank or use apps. Consumers should always check that every website that processes their card details has the padlock icon and “https://” before the URL; always report emails to the bank when they ask for a PIN or password, no matter how believable they look; and be careful of the kind of permissions they grant to apps.
Be sure to offer the right payment methods
If you’re a small business that accepts cash only but would like to expand to other payment methods, there are a few things you should consider. An mPOS solution like ZipZap is a great way to start accepting cards, whether you’re a mobile business or not. You can rent it or get it for free if your monthly transactions reach R25 000. But for frequent, high transaction volumes, it would be better to supplement your mPOS solution with a traditional POS system that is secure, upgradeable and easy to integrate with barcode scanners and tills. The digital age will continue to shift the way payments work and the only way to make sure these shifts work for you is to be prepared.
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