Digital payments have become the norm when it comes to consumer finance. According to some new reports, emerging payment methods such as account-to-account payments, digital wallets, and Buy Now, Pay Later. More than 80% of all consumers have used digital payment methods in the last 1 year. This number is expected to grow to 93% by the end of the next year.
A lot of these digital payment methods rely on the open banking framework and are a natural progression of shifting landscapes. In our guide, we will be telling you all the ways things you need to consider while integrating digital payments systems into your FinTech solution.
Things to Consider While Building a Digital Payment Method
1. Consumers Want Convenience Over Anything
Consumers all across the globe are using digital payment methods and it’s easy paying bills using this method. Paying bills and managing finances online is easier than any other method.
Subscription bills, utilities, loan repayments, and retail payments are more convenient with open banking-powered apps and services. Around 80% of all customers already know of account-to-account payment, but they may not be aware of the benefits of open banking. Open banking payment methods add speed and efficiency to the process.
2. Consumers Want Flexibility While Making Payments
Almost all global customers want flexibility and control to optimize their digital payments. Similar to the motivations around bill payments, consumers are connecting their accounts to automate the repayment process for BNPL and installment loans. 50% of consumers are currently open to the idea of connecting their bank accounts with other financial services to enable auto payments, and over 52% of customers claim that they want automated repayment solutions to prevent missed payments.
3. Security is the Top Priority for Customers
Consumers understand the value digital payment systems bring to the table. The customers who aren’t on board with digital payment methods are mainly because they think it’s not a secure method of sending money.
If you’re looking to integrate a digital payment system with your FinTech, then you need to build trust about digital payments in your customers. Building comfort with emerging digital payment methods is a key step in supporting future adoption as the two are tied together. Faster transactions, the convenience of payment, transparency, and security are the top reasons for customers to overcome security issues.
4. Consumers Use FinTechs to Keep Track of Their Finances
Consumers are relying on FinTechs and also open baking to get through everyday financial activities. The reason is simple, FinTechs make it easy to handle these tasks than doing them manually. 83% of all consumers have used digital tools at least one time to handle financial activities. Over 50% of customers use technology to complete 4-5 tasks. The majority of users see making payments as the only beneficial use case of FinTech companies and open banking technologies.
5. Latest Technologies are Most Famous Among Gen Z And Millennials
Newer generations are more likely to adopt newer technology compared to older users. When it comes to digital payments younger generations are the ones who pushed forward the use. It’s anticipated that their use case will keep on growing. There are generations who are less likely to make payments compared to younger generations. The percentage is 50 for Gen Z and 78 for Boomers. Younger generations are less likely to use cash for making payments. But security remains a major concern for all generations while using digital payments.