The Future of Payments
As fintech remains a staple growth in the modern day, payment technologies also grow to keep up with the convenience demand of technology. Not only is the infrastructure of back-end payment systems being rebuilt to keep up with compliance demands, but we're also seeing improvements on the front end of customer-centric solutions via contactless payments. Blockchain and similar cryptocurrencies also affect the payments industry, which is known as a decentralized currency. All these advancements make all fintech enthusiasts wonder- considering compliance, what is the future of payments? Let's take a look now.
Blockchain and Crypto
Relatively new alongside artificial intelligence- blockchain and crypto have trended with the younger generations. However, contrary to conventional stocks, typically on index funds - the appeal of these stocks is due to their volatility, which short-term investors can capitalize on for considerable gains. Before we examine how this affects the payment industry, let's look at blockchain and crypto.
What is Blockchain?
Blockchain is known as a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. Utilized as the back-end accounting for cryptocurrency, blockchain is the system of logs for how the cryptocurrency is used and moved around. Further - known as crypto farms, crypto enthusiasts also find this industry lucrative as they can create computers that contribute to blockchain-- which handles updating the ledger with the crypto movement.
What is Crypto?
Cryptocurrency is a digital, encrypted, and decentralized medium of exchange. Contrary to conventional stocks on the stock market or meme stocks, these currencies are handled on the blockchain, which the government did not initially regulate. Many short-term investors have created considerable wealth with BitCoin and Ethereum (along with other rising coins). However - as all good things come to an end, 2020 sparked the government to become involved, mainly due to the AML standards and capital gains. With this industry being scrutinized, the crypto market remains in question.
How do Blockchain and Crypto affect the future of payments?
While not affecting traditional payments or forex trading, cryptocurrency and the blockchain remain a separate interest. However, it's essential to note the volume of individuals who trade cryptocurrency is noteworthy. Keeping up with the trends, the payment industry has invested in their technology, where some Point of Sales systems accept crypto coins.
Contactless Payments and Digital Wallets
Contactless payments and digital wallets bring payment accessibility to customers everywhere. Alongside facial recognition and thumbprints in biometric authentication, security measures ensure that convenience doesn't come with prevalent security flaws. Before determining its effect on the payment industry, let's see what contactless payments are.
What are Contactless Payments?
Contactless payment is a cash-free, tap-and-go payment method. Contrary to traditional cash or debit/credit cards - the idea is to leverage standard technology (such as your phone) to pay for items via the Point of Sale (POS) system. With biometric authentication, this convenient form of payment utilizes your phone by hooking your bank information to the software needed to initiate the payment with the POS.
How do Contactless Payments affect the Payments Industry?
Contactless payments affect consumers, which - in terms, involves the payments industry directly. This customer-centric solution leverages technology to its highest degree, advancing fintech in everyday household items. Aside from giving consumers a more convenient way to pay for products via point-of-sale systems, this also affects schema mapping as transactions pass the clearing house.
Conclusion
The need for convenient payment solutions fuels the financial industry's continued growth. Both front-end and back-end payment infrastructures—such as contactless payments—are developing to satisfy customer and compliance requirements. Decentralized currencies are another way blockchain technology and cryptocurrencies change the payment industry. In terms, the payments industry remains a lucrative sub-industry of fintech as technology pushes consumer convenience demand further.
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