The Rise of Digital Payment Systems

 

Hello!

Welcome back to my blog! This week’s blog is on the topic of how the use of Digital Payment Systems has drastically increased over the years.

Digital payments are financial transactions that do not involve the physical transfer of money. Digital payment systems expand the range of people that can buy or sell, but they save costs through higher efficiency and allow for more transparent and secure online and offline trading. The types of digital payment systems include contactless payments, bank transfers, QR Codes and credit/debit cards.

In 2023, the number of non-cash transactions reached 1.3 trillion globally. By 2027, its forecast to reach 2.3 trillion.  The Covid-19 pandemic drove a large increase in digital payments, as customers sought contactless payments,  to minimize physical interactions. As stores shut down, consumers were forced to buy nearly everything online, so contactless payments increased dramatically.  In 2021, during the pandemic, 76% of adults had a bank account, up from 68% in 2017.

Digital payments systems has its many benefits to businesses also, which include:

•  reduced transaction costs
•  reduced cash handling risks

However, digital payments also has its disadvantages. One of the primary disadvantages revolves around security issues. Both businesses and consumers face constant threats of cyberattacks, including phishing and hacking. Ways businesses can combat these issues include:

•  Provide training to employees on handling electronic payments securely
•  Use fraud detection tools to monitor transactions and identify suspicious activity
•  Regular update e-payment systems and software to ensure liability

The graph below shows the rise in Mobile POS payments from 2017 and 2027. The rise of POS payments are increasing dramatically.

Some people may ask, what is the future of digital payment systems? Globally, they are expected to increase by more than 80% from 2020 to 2025. Digital payments are expected to become the norm and reshape the commercial world, as the use of mobile wallets and open banking systems are expected to dominate the industry!

I hope you enjoyed this week’s blog.

Till next time,

Niamh