What Financial Technologies Will Help to Speed Up Payments

What Financial Technologies Will Help to Speed Up Payments and Expedite Their Admissions in 2023

The financial industry is continually revamped by emerging technologies. As long as it happens smoothly, you might miss it, but if you look back 10 years, the changes are very significant: from mobile banking to cryptocurrency adoption. Fintech aims to speed up payments and expedite their admission. Of course, this is good for financial transactions because businesses and customers get smoother, faster, and more secure payment services. 

Financial Technologies That Accelerate Payments

We often write about crypto payment solutions. No wonder, because that's exactly what we do. So you probably already know about the benefits of crypto payments for businesses. If not, read this article. Meanwhile, let's look at what other technologies are changing the fintech market right now.

Open Banking

Open banking is a transformative banking model that permits data sharing between authorized fintech providers and banks. The concept hinges on APIs that facilitate interconnectivity, encouraging a more integrated, efficient, and user-centric financial ecosystem.

The need for open banking primarily arises from the limitations of traditional banking systems, known for their silos and restrictions. Open banking dissolves these barriers, ushering in an era of enhanced financial transparency and customer-centric services. With open banking, consumers can view their financial information across multiple providers in one place, simplifying their financial management.

Moreover, open banking accelerates payment services. By offering a seamless flow of financial data, it eliminates redundant steps in transactions, reduces friction, and ultimately speeds up payments. One key example of this technology in action is the partnership between fintech firm Yolt and Starling Bank. Yolt leverages open banking APIs to provide users with a consolidated view of their bank accounts, credit cards, and pensions, simplifying financial management.

Artificial Intelligence

Another instrumental technology enhancing financial services in 2023 is artificial intelligence. Yes, we understand that you might already be tired of him. Now, AI is written about as often as blockchain in 2017. But this does not negate the importance of either one or the other. With its potential for data processing and predictive modeling, AI is changing the way financial institutions operate, especially regarding accepting payments.

From boosting productivity to facilitating personalized customer experiences, the benefits of implementing AI in financial services are multifold. AI-based systems can automate manual, repetitive tasks, freeing up resources and allowing businesses to focus on strategic functions. In a similar vein, AI can help expedite payment processes, further improving the user experience.

Using Artificial Intelligence in eCommerce

Many don't yet fully realize how much AI can change every industry. It can not only generate essays and images or parody the voice, but also efficiently handle large amounts of data, which is critical, including for e-commerce.

• AI can improve the user experience in eCommerce
  by enabling personalized recommendations based on user behavior. Predictive analysis, an AI tool, can also help eCommerce businesses forecast sales trends, effectively manage inventory, and strategize marketing efforts.
• AI can drastically speed up payments in eCommerce. 
  AI-based algorithms can automate payment processing, leading to faster transaction times, fewer errors, and reduced operational costs. This expeditious process makes it more appealing for customers, leading to enhanced customer satisfaction and retention.
• AI is a powerful tool for fraud detection. 
  Unusual transactions can be flagged in real-time, adding a layer of security to accepting crypto payments. This level of security is crucial in the eCommerce industry, where businesses are often targets for cyberattacks.

To be fair, AI is rarely used for these purposes right now, but it clearly has potential.

Embedded Finance

Another financial technology that makes payments better is embedded finance. Embedded finance provides users with a seamless, streamlined experience by integrating financial services within non-financial platforms.

The concept of embedded finance covers a wide spectrum of services, including embedded banking, insurance, investments, lending, and payments. By integrating these services within everyday platforms, businesses can offer more comprehensive, convenient, and customized services to their users.

Embedded banking, for instance, could allow users to make financial transactions, check account balances, or transfer funds directly through their favorite shopping apps or social media platforms. Embedded insurance might let customers purchase coverage directly through car rental or travel booking platforms. And when it comes to embedded payments, users could make purchases or transfer money directly within messaging apps or other platforms they use daily.

The power of embedded finance lies in its potential to streamline services, improve user experiences, and increase engagement and loyalty. By removing the need for users to switch between multiple platforms or apps, embedded finance can make financial management more efficient and less time-consuming, thereby speeding up payments.

Buy-Now-Pay-Later (BNPL)

As its name implies, BNPL allows consumers to purchase products immediately and pay for them over a specified period of time, usually in interest-free installments.

At the heart of BNPL's popularity lies its versatility and simplicity. It serves as a practical financial tool, particularly for those unable to pay the full cost upfront, enabling them to manage their finances better and avoid costly credit card interest rates. BNPL also empowers consumers with more financial flexibility, removing the psychological hurdle of parting with large sums of money at once.

But the real appeal of BNPL isn't only its simplicity and convenience for the consumer but also its transformative potential for retailers and businesses of all sizes. It's a powerful tool for increasing sales, improving cash flow, and enhancing customer loyalty. By offering BNPL as a payment option, businesses can attract a broader range of customers, particularly those who prefer to stagger their payments rather than pay all at once. Examples of services include Affirm and Afterpay.

"What kind of innovation is this? This is ordinary lending?". Not at all. Lending may require a credit check, while BNPL providers usually don’t, meaning customers can avoid hard inquiries on their credit reports. Also, BNPL usually provides for an interest-free period, while loan repayments may involve the accrual of interest from the outset.

RegTech

RegTech represents the new wave of technologies aimed at simplifying and enhancing regulatory compliance. Using artificial intelligence, machine learning, big data analytics, and blockchain, RegTech solutions streamline compliance processes and mitigate risks.

At a basic level, RegTech helps businesses automate complex compliance tasks. For instance, in an era where accepting payments online for small businesses is increasingly common, ensuring compliance with diverse regulations can be a challenge. RegTech solutions can monitor transactions in real-time, flagging any suspicious activity and reducing the risk of regulatory breaches. By the way, this is especially relevant for crypto.

PerformLine is a leading RegTech company providing a multi-channel compliance platform that automates the path to discovering, monitoring, and mitigating regulatory and brand risks arising from deceptive marketing practices.

Talking about crypto, Chainalysis, for example, offers blockchain data and analysis to government agencies, exchanges, and financial institutions across 40+ countries to enable them to detect and prevent cryptocurrency-related crime and money laundering.

But beyond basic compliance, RegTech also offers strategic benefits. It can provide businesses with clearer insights into their operations, helping them understand their risk exposure and make informed decisions. More importantly, it enables businesses to respond rapidly to regulatory changes, ensuring they can continue operating smoothly even as the regulatory environment evolves.

Conclusions

The financial technology landscape is rapidly evolving, driven by a combination of technological innovation, changing customer expectations, and regulatory pressures. From open banking and artificial intelligence to embedded finance, BNPL, and RegTech, businesses are leveraging a wide range of B2B fintech trends to streamline their operations, enhance customer experiences, and ensure regulatory compliance.

And, of course, let's not forget about cryptocurrency payments. Even using the above innovations, traditional payments remain slow and expensive. Meanwhile, thanks to decentralization and transparency, cryptocurrencies have long offered a level of security and accessibility that was unachievable before.

Contact Whitepay to start accepting crypto payments.

As we move into 2023 and beyond, we can expect to see these fintech trends continue to shape financial technology. Businesses that can adapt to these trends and harness the power of these technologies will be well-positioned to lead the charge into the future of finance.