Promoting Growth in the Card Payments Industry

Customers who are underbanked or unbanked are urged by many nations to utilize prepaid cards instead of banks.

FREMONT, CA: Card payments have been around for 80 years, yet everything has stayed the same to keep up with ever-changing customer needs for digital payments and the tremendous expansion of innovation in the fintech industry. Many financial institutions that rely heavily on legacy systems to provide financial services are finding it more challenging to remain competitive in the face of the card payments industry's rapid changes. Legacy systems are not designed to be easily updated or changed, and as the card payments industry evolves, these systems need to be updated to accommodate for new features and capabilities. This leaves financial institutions at a disadvantage as they struggle to keep up with their competitors.

Embedded payment capabilities and the growth of global card users are upcoming developments in the card payments industry.

Challenges: Banking institutions and suppliers have also evolved slowly, leaving their old systems unprepared for quick innovation. Although their platforms were solid, they couldn't compete with the agile financial solutions developed by fintech firms. This was especially true during the 2010 fintech boom. Another problem is that over two billion individuals are still unbanked or underbanked. This demographic includes those residing in the United States and those in emerging economies. Despite identifying this as a significant challenge, studies also demonstrate that it offers a potential opportunity for card payments to be adopted. Other issues confronting financial institutions that continue to use legacy solutions include a lack of customer data. No data reveals an awareness of client demands and how the institution manages fraud.

Digitized: In the last few years, there has been a significant shift in customer expectations. Whereas before, it was common for consumers to receive a letter indicating that their credit card would be delivered within ten business days of approval, this situation is now unthinkable. The gadget has evolved for the client, with all items and services available quickly with a single phone swipe. The phone is expected to become a "digital card" for the consumer. Thus, tokenized wallet-based cards can be issued and accepted through the phone in today's digital age.

Convenience: According to market research, integrated payments are another trend to watch out for. The payment process is "interwoven" inside the user experience, eliminating customers' need to visit a distinct step during the payment process. Integrated payment processes make it easier for customers to complete purchases because they are integrated into the user experience. Customer satisfaction increases as a result of making transactions easier. Embedded payments eliminate any checkout-process friction. This capability's strengths are increasing card transactions and reducing the ever-increasing cart abandonment problem.

This type of solution facilitates the urgent need to address many of the challenges previously mentioned since there is no preexisting legacy heritage or infrastructure. Despite the explosive growth in innovation within the fintech industry and the ever-changing demands of customers for digital payments, little has changed.