Future of Online Payments: Banking Technology Trends for 2023

The world of payment and finance is constantly changing because we live in a significant time. Several industries make use of digital payments on their platforms. Digital payments enable individuals to make their purchases online without a physical presence. It enables a seamless transaction between businesses and consumers at large. 

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Digital payments are contactless payments that are here to stay. It is widely adopted because it is easier, faster, and more secure. Over the years, there has been a change or shift in the work culture, such as remote working, which often requires online payments. Keep reading this article to know more about the current banking technology trends.

Biometric Authentication

Some online payment options now make use of biometric authentications for payment authorisation. Biometric authentication involves using an individual’s unique biological characteristics to verify their identity. It is an ongoing trend in 2023 involving an individual’s structural characteristics to verify the authenticity of a payment.

Biometric authentication is a secure and reliable digital authorisation for payments that helps to reduce or prevent fraud and identity theft. This unique payment verification helps to provide efficiency, security and accuracy. It is highly secure and unique to the characteristics of an individual; hence it promotes customer trust in businesses. 

Vein Mapping

Vein mapping on the palm is a non-invasive and contactless form of biometric authentication recognition. It is unique to an individual because the layout of an individual’s hand is different from any other person’s. This biometric authentication method helps with identity theft because it is difficult to copy another individual’s vein geometry. 

• The technology involves using infrared rays to capture the visible pattern of an individual’s vein. 
• During the capture, the rays also help to detect the blood flow in the person’s palm. 
• The patterns captured are unique and can be used to identify the registered individual. 
• Many businesses with high-traffic locations use this authentication to ensure a secured payment. 

Facial Recognition

Facial recognition is a popularly known biometric authentication among online businesses. Most businesses make use of this method for easy identification during payments. It is the extraction of an individual’s facial structures, such as:

• The distance between the lips and nose 
• The eyes
• The nose structure

The authentication compares these features to other images to find a match, making it a secure way to authorise transactions. It involves turning a person’s beauty marks and unique lines into a mathematical space through skin texture analysis. There is thermal imagery and technology which makes it difficult to cheat the system. 

Fingerprint Scans

Fingerprint scans are one of the safest and most convenient ways to authorise an online transaction. It improves customer satisfaction and decreases chargebacks. Fingerprint scans are a viable authentication method because everyone has a different fingerprint. 

It is simple to use and set up, and it is almost impossible to simulate another person’s unique fingerprint. The privacy of the individuals is also protected, and it brings about a seamless transaction. 

Cards to Codes

Previously, most bank accounts were recognised by the combinations of some random digits on the card. However, there is now a more secure and computerised mechanism for payment. Europay, Mastercard, and Visa technology upgraded their technology and improved the convenience of online transactions.

The technology is famous for using codes that vary for every transaction. These were temporary codes that enhanced the security of the bank accounts. It helps prevent unauthorised transactions, as most businesses ask for the code for verification. 

Real-Time Payments

Over the last decade, real-time payments have remained a significant financial innovation that helps to boost digital economies worldwide. Real-time payments are a digital infrastructure that settles immediately. The RTP networks always process online transfers 24/7 because they are always online. 

RTP should not be called “fast payment” because not all are conducted in real time. It brings value because the payments are fast and great for individuals needing immediate transactions. Most companies favour real-time payments because they recognise the value.

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In the case of business-to-business, RTP helps in the availability of data remittance and liquidity management. It also helps businesses to confirm their payments and improve their control over their payment time. The information involved is accurate, and there is little to no delay in the data processing.

Businesses can now make their instant payments through their mechanisms. These mechanisms include e-wallets, instant bank transfers with account numbers, and real-time payment transfers between two banks. 

Digital Currency

Digital currency comprises the central bank digital currency, cryptocurrency, and stablecoins. However, the most common form of digital currency is blockchain technology, a cryptocurrency foundation. These currencies are easily accessible and available only in electronic or digital form. 

These currencies are also known as electronic currency or digital money. It does not require any intermediaries, and it is a cheap currency trading method. Although all cryptocurrencies are digital currencies, not all digital currencies are cryptocurrencies. Transactions involving digital currencies are often made via electronic wallets connected to a designated network. 

Digital currencies are for online transactions because they have a similar utility to physical currencies. However, these currencies may be restricted in some online platforms, such as gambling sites or social networks. Some gambling sites, such as https://www.slotozilla.com/uk/free-spins/10-free-spins-no-deposit, enable the use of cryptocurrency for fast transactions.

A major advantage of digital currencies is that they enable individuals to execute seamless and instant cross-border transactions. These currencies can be decentralised or centralised, and they transfer value. 

Virtual Currencies

A virtual currency is stored and only transacted through a designated mobile application or software. It is also a digital representation of value that is often unregulated and issued by groups of developers. Virtual currencies are easy to use and secure. It has a fast transaction speed, and all virtual currencies are digital currencies. 

These currencies are susceptible to hacks, and they have no intermediaries involved. It can also be algorithmically programmed for automated transactions. Depending on the operating network, virtual currencies are often classified into closed virtual and open virtual currency. 

Cryptocurrencies

Cryptocurrencies are currencies that exist in a digital form for making a secured transaction. It operates on a decentralised system to issue new units. This currency does not need any verifications from banks for transactions because it is a peer-to-peer system. It enables individuals to send and receive funds worldwide. 

The first cryptocurrency ever founded was Bitcoin in 2009. It uses advanced coding that enables the storage and transmission of crypto data to public ledgers. This type of currency operates on a public ledger popularly known as Blockchain. The blockchain records all the updated transactions carried out by the currency holders. 

Some of the best-known cryptocurrencies and their description are:

Central Bank Digital Currencies (CBDC)

CBDC is the digital version of the physical currency of a country, such as a digital pound and dollar. The central banks in the country manage and issue these forms of digital currencies. These banks oversee the country’s currency and monetary policy. The currency is similar to the cryptocurrency; however, its value is equivalent to the fiat currency of the country. 

A major benefit of CBDC is that it ensures access to funds when cash is not accessible. It also brings about an efficient payment system because it enables faster transactions. 

Conclusion 

Online payments offer individuals several advantages, such as data accuracy and fast transactions. In today’s world, new technological trends facilitate efficient online payments. These trends include biometric authentication, digital currencies, real-time payments, and cards to codes.