You can see the current balance of your checking account by logging into your bank’s or credit union’s app. Digital payment providers like PayPal allow you to manage funds outside of the scope of a traditional bank.
You can purchase something online by punching in the information from your debit or credit card. Even your employer can deposit your paycheck into your checking or savings account electronically.
Digital payments have already altered the way we think about currency. Now they are changing the way we look at global commerce.
The EU’s PSD2 Revolutionizes the Payments Industry
The second Payment Services Directive, an order designed by members of the European Union, created plenty of changes with its implementation in 2018. It works to eliminate the monopoly that banks have on the data they collect about their customers.
Merchants like Amazon can now retrieve account data from your bank with your permission. That allows them to make payments for you without the need to redirect to a third-party service provider like Visa, MasterCard, or PayPal.
If a consumer has more than one account, then the changes created by PSD2 allow for all of the information to display in one place.
Because this process puts more critical information into one accessible spot, PSD2 requires robust identity checks when you make an online payment. That means you need to do more than punch in a number with an expiration date. You must verify that you’re the one initiating the transaction.
This process brings us one step close to open banking and a global economy.
Digital Payments Trends to Monitor in 2020 and Beyond
Open banking means more competition, so digital payments will come from a variety of providers in 2020.
Mobile devices make it easier to carry financial data and prevent loss, allowing digital payment methods will expand at point-of-sale opportunities.
In-store apps like Apple’s iBeacon or PayPal Beacon simplify payment processes because it eliminates the need to stand in line to make purchases. Each transaction creates a specific code so that you pay through the app instead of the register.
Deltec Bank said, “Digital currencies will also change the way we think about global commerce.” Bitcoin is a borderless solution that reduces fees and processing times while expanding the levels of transparency in a transaction. When we use cryptocurrency, then it becomes possible to create liquidity from items that generally wouldn’t give us this option.
You could own a percentage of a famous painting, control equity in your home without a loan, or invest in raw materials without the need to purchase corporate stocks or bonds.
Several P2P options for currency transfers have also been tried over the years, such as SnapCash on SnapChat. You can still send people money through PayPal with an email address without a fee. Mobile payment apps can even transfer money directly from one bank account to another.
Digital payments are transforming how we spend our money each day. These strategic assets make it easier to create completely integrated customer experiences at every stage of the sales funnel.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.