Cash is still used in 83 percent of transactions around the world. Other payment mechanisms are becoming available in this situation, which might completely change the picture.
Although all forms are closely linked, electronic payments, including payments done over the internet and payments made using mobile phones, have seen rapid growth over the years. This has prompted the majority of big banks to embrace an omnichannel strategy.
Cash is being replaced by digital and electronic mobile payment systems, not by cards. New payment methods will start replacing traditional means, and there will be a point when practically all transactions, particularly on smartphones, will be handled online.
Though few dare to forecast how this transition across payment channels might unfold, there is an agreement on the criteria that new payment channels must possess in order to gain market share.
In this blog, we’ll list 6 key characteristics every payment channel must possess.
Every payment channel that has the potential to succeed in the long term must be able to be used anywhere in the world. This will allow bigger, multinational corporations and businesses to shift to that particular channel, given that they can link their branches all over the world and have a centralized system.
The channels should also facilitate both online and in-store payments to offer more convenience and choice to consumers.
The channel must be well regulated in order to comply with all the rules and international guidelines. Without adequate regulations, problems could arise, and people could get exploited or counter issues that cause inconvenience.
Every new channel must ensure it’s safe. Gaining people’s trust is a difficult thing, and if lost once, it is hard to regain. Security should be one of the utmost priorities when opting for a payment channel because it often involves big-money transactions, and any mishaps or interference can cause huge financial losses for all parties involved. It could also lead to lawsuits and other problems.
Payment channels should be simple and easy to understand for everyone. Not everyone is tech-savvy or a tech enthusiast. Many people struggle to understand complicated systems. This is why payment channels must remain simple to understand and practical at the same time. This will encourage more and more people to shift to a particular channel. The harder the payment channel is to understand or carry out a payment, the more the people will hesitate to shift to it.
Payment channels should not involve high transaction fees. A slight fee might not cause problems, but people will hesitate to shift to new channels if it charges them a significant amount for making a transaction.
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