The increasing use of digital financial services—mobile banking, online purchasing, and peer-to-peer payments—means that money is increasingly passing from computer to computer rather than through human hands. There will be no cash, plastic cards, paper bills, checks, envelopes, or stamps. Digital is no longer just another method of transferring funds.
Every organisation that moves money must interact with customers through computers, smartphones, and other devices, and provide quick, secure payment services.
As consumers worldwide sought to shop without contacting anything or going anywhere, the covid-19 pandemic boosted digital money movement, from online purchases to contactless payments and smartphone wallets.
“The common denominator across almost all post-pandemic behavioural shifts is the growing importance of digital payments. Covid forced a market that was already growing to greatly accelerate,” says Paul Fabara, executive vice president and chief risk officer at Visa, whose worldwide networks handled an estimated $13 trillion worth of transactions last year.
According to the World Bank's Global Findex Database, 76% of adults worldwide have a financial institution or mobile money provider account as of 2021, up from 68% in 2017 and 51% in 2011. 71% of adults in developing countries are included in this figure. By 2021, nearly 95% of adults in high-income economies will have made or received digital payments. During the pandemic, 80 million adults in India and 100 million in China made their first digital payment.
Fraudsters are well-known for going where the money is, and their online activities are expanding in lockstep with the increase in digital transactions. As per FBI's Internet Crime Report for 2021, annual losses from cybercrime in the United States nearly doubled between 2019 and 2021, from $3.5 billion to $6.9 billion.
Driving online transactions
According to Aaron Press, research director of worldwide payment strategies at IDC, who tracks the development and adoption of real-time payments, business-to-business customers are beginning to demand the same seamless real-time transactions that consumers expect.“If you think about the way you shop online for personal things or pay your friends using a mobile-to-mobile app, those expectations are finding their way into the business environment,” he says.
According to an MIT Technology Review Insights survey of global business leaders, digital payment technologies are of high interest across all types and sizes of businesses. Although 36% of respondents are new to digital payments, 43% expect to expand their offerings over the next 18 months, and many are experimenting with cross-border transactions (37%), as well as cryptocurrency (18%).
Press concluded, "Digital payments are more efficient and dramatically reduce errors. You’re much less likely to fill out something the wrong way, because there are checks and balances within the system.”
The full report can be viewed here.
