Digital Payments - In Future

Digital payments must be 

• Faceless, 
• Cashless and 
• via completely electronic means of end to end transaction 

without compromising availability, provenance and traceability, repudiation and of course information security. 

Since last decade digital payments have garnered a lot of interest and adoption from the users and positively influenced the digital agenda for enterprises and governments.

According to Gartner,

• 5 countries will launch digital initiatives to remove cash from circulation by 2023 fully replacing cash by digital means
• Global cash in circulation will reduce after decades of year-on-year increases by 2024
• Consumers using mobile proximity payment methods will be almost 2 billion, up from 2019’s figure of less than 1 billion, by 2024

Future Technologies of Digital Payments

Use of Biometric - Using unique fingerprints and facial recognition, digital payments can be enabled via authenticating the users and authorizing the transactions, offering accurate, secure, instant and hassle-free way, rather than remembering various PINs and passwords from multiple entities and keeping track all the time. Most of the digital payment players leverage device based authentications and tokenize the transactions without need of user interventions. Most of the payment wallets running on the mobile devices have successfully paved way of this method and good amount of research and development is happening in this area.

Use of Voice/Speech Analytics and AI/ML based algorithms - They have been around for few years now and are driving the way we control our home appliances, even interact while driving, etc. As these technologies will become more efficient and accurate the digital payments would be the ones to leverage them in real life. This will help create more secure and simple way to trade and transact within the digital payment domain.

Near Field / Contactless - Using proximity of device via EVM & RFIDs, POS machines via NFC - there are many ways embedded workflows can be built to provide easy and secure way to transact. There are major credit card players already issuing the contactless that will work with ATMs and POS terminals and even interact with the mobile devices by and between the stakeholders involved in the workflow.

DLT's – Digital Ledgers / Blockchains’ foray with digital currency is well known and many regulators are finding ways to strike a balance between autonomous currencies and digital payments, which is significantly decentralized, anti-fraud and business continuity driven DLT’s will surpass our expectations and establish the technological governance to fool proof the digital transactions in years to come.

AI/ML and Data Science – It will substantially improve the insights on the volume and velocity of digital transactions which is a common barrier for fraud detection, risk management and regulatory mandates etc. Use of AI/ML coupled with established data science practices will pave way for governments and banks for traceability, customer acquisition and retention, royalty management, credit scores, marketing etc., expanding the canvas of intelligence of digital payment transactions.

The first wave of the digital payments started a few years ago. Users can no longer be constrained by banking hours, type of devices, physical cards etc., to transact by and between entities.