As the world moves towards a cashless society, the global payment processing industry is undergoing rapid changes. From the adoption of new technologies to shifts in consumer behaviour, these changes are transforming the way businesses and individuals send and receive money.
One of the most significant trends shaping the industry is the rise of mobile payments. According to a report by Business Research Company, the global mobile payment market is expected to grow at a compound annual growth rate of 30.1% from 2021 to 2028, reaching a value of $7.6 trillion by the end of the forecast period.
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This growth is being driven by the increasing adoption of smartphones and the convenience and security offered by mobile payment platforms.
Africa, in particular, is at the forefront of this trend, with mobile money platforms like M-Pesa and MTN Mobile Money making it easier for people to send and receive payments using their phones. In addition, payment gateways like Tingg are reshaping the way people send and receive money online in Africa, enabling businesses to transact without going through traditional banks.
Another trend reshaping the industry is the adoption of blockchain technology. Blockchain enables secure, fast, and cheap transactions without the need for a middleman, potentially revolutionising African economies by making it easier to move money around without losing value through exchange rates or fees.
However, the decline of cash as a means of transaction is not universal. While many countries are moving towards a cashless society, cash still remains the primary means of transaction in many African nations.
According to a survey by McKinsey, cash still accounts for 90% of transactions in Africa, with e-payments becoming increasingly popular but still not widespread.
This shift away from cash is having a significant impact on the payments industry, with companies that process card payments seeing rapid growth. However, there are still challenges to be overcome, particularly in developing economies where access to financial services can be limited.
To address these challenges, financial institutions are implementing more robust authentication processes to protect against fraud and introducing new technologies such as biometrics and blockchain to strengthen security.
In addition, there is an increased focus on data privacy regarding payment processing, with many institutions adopting measures to ensure customer data is protected.
Another key trend shaping the industry is the adoption of contactless payments. Contactless payments use near-field communication (NFC) technology to enable users to make payments without the need to physically swipe or insert their card. This technology has become increasingly popular in the wake of the Covid-19 pandemic, as people look for ways to avoid touching shared surfaces.
Finally, artificial intelligence (AI) is also set to transform the payments industry. AI can be used to analyse large volumes of data to identify patterns and trends, enabling financial institutions to detect and prevent fraud more effectively. AI can also be used to improve customer service by providing personalised recommendations and support.
In conclusion, the global payment processing industry is undergoing rapid changes, driven by the adoption of new technologies, shifts in consumer behaviour, and a move towards a cashless society. While these changes present significant opportunities for businesses and individuals, they also pose challenges, particularly in developing economies.
To stay ahead of the curve, financial institutions must continue to innovate and invest in new technologies to meet the changing needs of their customers.
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