If you’ve bought or sold anything online in the past few years, you’re already aware of how much ecommerce is changing. Fintech, or technology used by members of the financial services sector, is giving customers a wider range of new payment options. Merchants are also benefitting, as fintech provides more and more ways to increase conversion rates and collect payments.
In fact, some experts say that fintech will be the driving force behind a boom in ecommerce that is expected to drive global digital sales to reach $4 trillion in 2020. If you’re an online retailer, here’s what you need to know about how fintech will soon change the ways in which you do business – and how it already has.
Fintech Is Already Among Us
Fintech simply refers to the apps, programs, and devices used to keep track of money, make transactions, and provide financial services. Banks, insurance providers, accounting firms, real estate firms, healthcare networks, and other businesses have already been using fintech for a long time to keep track of invoices, payments received, and other financial matters, including fundraising and loan-making. But recent innovations in fintech have put the power of these applications into the hands of even the smallest businesses in every industry, and into the hands of consumers themselves.
If you’ve used PayPal to make or accept a payment for something, you’ve already benefitted from fintech. Other popular forms of fintech include Apple Pay, Android Pay, and Google Wallet. In-app or in-game purchases are also facilitated by fintech. Fintech offers multiple secure means of buying and selling online, and it’s not just a fad. The presence of complex emerging markets around the world means the fintech industry will continue to grow. Fintech enables traditional and online retailers and merchants to provide mobile-friendly payment solutions that can adapt to the often very changeable needs of markets around the world, in spite of local differences in laws, banking infrastructure, technology infrastructure, and operational capacity.
The Future of Fintech
A glimpse at the future trends of fintech shows an industry that innovates to meet the needs of consumers in very different markets around the world. Consumers in many parts of the world, for example, don’t have access to infrastructure services necessary to maintain a wired connection to the Internet; these customers need mobile-ready financial services, and fintech developers are answering the call with apps like WePay, PayU, Dwolla, Stripe, and BlueSnap. Point-of-sale credit is meeting a similar need, by opening up the opportunity for installment or buy-now-pay-later solutions to a wider range of people worldwide.
It’s not just the payment solutions themselves that are changing; fintech developers are also finding ways to change how transactions are recorded and products are delivered. Blockchain technology, developed to track transactions conducted using cryptocurrencies like bitcoin, provides a means of creating a verifiable record of transactions made in a given system. Once new data is entered onto a blockchain log, it can never be tampered with or erased, creating a trustworthy ledger of digital transactions. This provides merchants with a valuable means of recording transactions, and allows them to accept cryptocurrencies as payment.
But that’s not all; some online retailers, like Alibaba, now use blockchain technology to protect against theft and counterfeiting. They do this by using QR codes to assign a kind of blockchain serial number to each physical product shipped, so that it can’t be stolen and swapped out for a counterfeit substitute by an unscrupulous individual further down the supply chain.
That’s not the only way in which merchants are expected to increasingly rely on technology for fulfillment purposes. Amazon’s nascent drone delivery service, Prime Air, while still in development, may one day represent the standard method of delivery for online retailers of all stripes. Biometrics, such as the use of fingerprint identification in iPhones, are expected to become a more standard security technology as merchants and customers increasingly search for a safer way to do business. And chatbots, or computer programs designed to talk with humans, are expected to help streamline customer service by allowing the option to make payments and reservations; view images, videos, or links; or even resolve straightforward customer concerns without burdening a company’s human reps.
Whether you’re an online retailer, a consumer, or both, fintech is poised to make your life – and business transactions – even easier. Within the next few years, mobile pay options, blockchain technology, point-of-sale credit, and other fintech innovations are expected to balloon, revolutionizing the way we buy, sell, and shop – again.