Are you still standing in long queues with a payment cheque for transferring or receiving funds for making different payments? Well, not anymore. The fintech services have reshaped the financial ecosystem to a whole new level. With the incoming Contactless payment tag in India, there has been a breakthrough in consumer behaviour. This tag system is one of the most intriguing innovations in the fintech sector which promises effortless transactions and unparalleled convenience. But, what is its future? In this blog, you will get to know more about contactless payments.
Emergency and Adaptation of Contactless Payments
There has been an acceleration in the use of contactless payments because of the need for technological advancements and sanitary transaction methods. It is assumed that the contactless payment sector is likely to flourish significantly, making billions in transaction values. What drives this transaction? Well, it is mostly consumer’s preference for mobile payment systems and digital wallets that drives the need for contactless payments.
Benefits of Contactless Payments You Should Know About
Contactless payments offer the following advantages:
Improved Security Measures
- Fraud Identification Systems: AI and Machine Learning are used by such systems to identify and stop real-time fraudulent activities.
- Encryption: Contactless payments incorporate advanced encryption techniques that make it challenging for unauthorised elements to access bank accounts or actual transaction information.
- Tokenisation: The process uses a unique token instead of secure payment information. This token can further be used during transactions without disclosing your sensitive account details.
Technological Advancements
Biometric Authentication
Facial recognition and fingerprints are biometric authentication techniques which are among the popular advancements of contactless payment processes. These technologies offer an extra layer of protection, making sure that only authorised users can complete the payment.
RFID and NFC Technology
- RFID or Radio Frequency Identification is a technology that utilises radio waves to detect and monitor tags placed on items. This improves the effectiveness of contactless payments by assuring speedy and legible data transmission.
- NFC or Near Field Communication is another technology that enables devices to collaborate over short distances, making it an ideal solution for contactless payments. Mobile wallets are powered by this technology which include Samsung Pay, Apple Pay and Google Pay. This allows consumers to make safe and sound payments with a tap on their device.
Wearable Devices
Payment capabilities are increasingly integrated into wearable devices like rings, fitness trackers and smartwatches. Even if you don’t carry your smartphone or wallet, these devices make your payment journey rapid and convenient.
Collaboration with Additional Technologies
Voice-Driven Payment Systems
You must have heard of Siri or Alexa. These are voice assistants that many businesses and individuals are integrating with various operations. If you’re running a business and you want to keep track of what amount is paid every time, then you can integrate these speech-activated assistants. With this technology, customers can make purchases and it simplifies the payment process for businesses.
IoT or Internet of Things
IoT is revolutionising a variety of industries, particularly payments. IoT-driven systems can initiate smooth payments. For instance, today’s smart refrigerators can now order groceries on their own and pay for them. Isn’t it fascinating?
Digital Currencies and Blockchain
Cryptocurrencies and CBDCs or Central Bank Digital Currencies integrated with contactless payment equipment are predicted to become a popular concept, bridging the gap between real and virtual financial ecosystems.
Consumer Experience
There will be more advancements in contactless payments when more emphasis is put on improving the overall transaction experience of the consumers. Seamless connection, personalisation and reward schemes are some of the features that will make the payment journey for consumers more engaging and immersive.
What Does the Road Look Like for Contactless Payments in India’s Financial Landscape?
Many developments and trends will become more prevalent which will revolutionise the contactless payment process in India. These trends are:
- Forming alliances among government organisations, technology companies and financial institutions will accelerate the growth of an effective and collaborative payment ecosystem.
- With more and more smaller major stores starting to accept contactless payment systems, the ecosystem for contactless transactions will become stronger and more convenient.
- To make contactless payments accessible to more individuals, it is necessary to overcome the urban-rural divide. For that, attempts are to be taken by the concerned authorities which include government organisations and financial institutions.
Final Thoughts
There is a bright future for contactless payments in the Indian financial landscape if proper initiatives are taken. The speed and ease that contactless payment options provide, make it a joyful experience for consumers. Combining different technologies, fintech companies are trying different efforts to make contactless payments the future of the financial landscape in India.
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