Online payments were growing at a considerably high pace before the pandemic, but the pandemic has accelerated the growth rate largely. There has been a dramatic rise in the contactless payment modes as per the need of the hour. Across the Globe, more than 30 % of the total payments now happen online.
The spike in E-payment is holistic and not restricted to any one industry. Most of the large business houses and even the small-medium enterprises rely on online payments for their business execution. The common people are comfortable with the cashless modality.
One primary thing that we must understand in this context is that this relentless change and the current high pace of the change are quite complex. There is a huge integration of networks that makes a secure online payment feasible.
When any company offers the option of online payment acceptance, it must look after plenty of real-time aspects, including a solid way to solve any problems should they arise. An array of factors that must be considered by the companies are:
- Channels to support the payment
- Adherence to any national standard of payment (existing in certain countries)
- A reliable and functional banking partner
- A smooth, secure, and hassle-free payment gateway
- Extremely profound security measures for prevention of any fraud cases
- Verification and identity authentication to prevent any identity or data theft
Undoubtedly, there has been an excellent development of modern technology that helps ensure all these prerequisites. There are also multiple new fraud prevention techniques through which, even if there is any loophole in the security parameter, it can be identified and sorted out immediately.
But one of the main restaurants in this aspect is the development cost. The development and operating costs of these payment gateway technologies are quite high, and companies must consider that. Also, gaining the customer base and maintaining them for a long time is equally vital to keep the digital payment modality continuously working.
Risks Associated with Digital Payments
The digital payment market is a novice, and with the advent of the new market, new technologies step in new risks. Let us have a look at the most conspicuous risk factors associated with the digital payment system:
Cross Border Operation
Many people consider security and theft issues as the primary problem associated with the digital payment interface, but that is not the primary one. The first problem associated with paying and accepting money digitally is the cross-border operation. Every country has its unique payment system. With the perimeters of the country, there is a Unified Payment Gateway. But in the world of globalization, businesses are no more restricted to the borders of a country.
A consumer from the USA may wish to buy the best dresses from Bangkok. Or a company from Korea may wish to buy mozzarella cheese from the Netherlands. If this is the case, then how are they supposed to pay and receive? The need to facilitate the cross-border online payment interface is becoming prominent with every passing day.
However, there have been some baby steps in this regard. Western Union, Google Pay, and Wise are some of the teams that have announced to facilitate this process of Online International Money Transfer, and plenty of countries are going to be facilitated by this process. We can expect that multi-Currency transfers will become easier, less expensive, and, most importantly, faster with the help of such technical upgrades.
Technology Standards
A highly flexible and scalable technology with room for irregular upgradation is needed for the smooth operation of any Unified Payment Gateway. Each country has certain National Standards regarding the use of technology for the operation of a gateway like this. There exist certain pre-set infrastructures for online payment systems stated by ISO 2022 and is important to adopt them.
The technological parameters associated with online payment systems should prioritize the actual need of the consumers. For example, online payment systems should come up with instructional interfaces to make their usage easier and convenient for people who are not tech-savvy. The interfaces must allow for any change to fit in whenever it is needed.
Poor Internet Bandwidth
The Internet is the guiding spirit of online payments. You cannot pay through any online gateway if your device is not connected to the internet. One of the many issues that consumers face is the failure in payment when the device is not connected to a very strong internet connection. Low bandwidth of the internet is one of the root causes of failed online transactions.
The failure in payment is primarily due to the non-responsiveness of the servers whenever they cannot gain access to the required bandwidth. Many instances also reflect that even though the amount is depicted from the sender’s bank account, it does not get deposited in the receiver’s account.
The Online Payment interfaces should make sure that their software and applications can also operate in low internet bandwidth. There are some payment gateways that have adopted measures like intelligent routing and direct integrations with banks to make the payment transfer process super-fast, such that it needs the least internet connectivity. These measures ensure that the operation can happen hassle-free even though the internet connection is not very strong.
Data Security
This is perhaps the most crucial concern associated with online payments. A whole section of the society abstains from using online payment systems simply because they fear that is not safe. The core areas that we must understand here are the root causes of this concern:
- There is no physical person you can go and accuse of theft in case there is something wrong with the money transfer
- There is a possibility that someone else can hack your account and gain access to your personal details, but that is not quite possible with the physical; bank note-mediated payments
- Identity theft and impersonation are two main crimes associated with the online payment system.
Owing to these, many people are not comfortable with using online payment systems. Indeed, these are some concerns we cannot walk away from. But the good news is that payment systems are becoming more secure and sustainable to cater to a larger group of audience and users. In countries like India, the rate of online payment system fraud has increased to 69% during the pandemic. There are various other scam reports that force us to doubt the integrity of online payment methods. One of the ways to overcome these data security issues is to learn how to handle the cards safely.
One way to do this is to use interfaces complying with the Payment Card Industry Data Security Standard. These interfaces follow certain specific rules and regulations when it comes to mediating online payments. Thus, you can have some help from it. At the same time, it is easier to reach the customer care section of such platforms, where you can communicate your concern.
The User Interface
In countries like the USA or England, digital literacy is optimum. However, in developing countries like India or Bangladesh, digital literacy is not satisfactory. Many people in these countries still do not have access to smart devices and a stable internet network. Some people have the devices but do not know how to make a payment using the smart phones.
The User Interface design of many online payment interfaces is exceedingly complex. People find it difficult to understand how to cooperate and to send or receive money using the internet. They also do not come with any instructions. The fear of being unable to handle the interface properly and of losing their money in any attempt of trials keeps people away from using such complex payment interfaces.
It is important for the companies and the online payment gateway developers to come up with user-friendly designs for their interfaces. The use of regional languages can be facilitated so that people without knowledge of English can access them as well. The Ease and speed of payments during any checkout process is also a crucial concern. The core idea is to help more users be able to use the interfaces, and it can be achieved by focusing on better customer experiences and making online payments easier.
Final Words
Change is the only constant thing in this world. We are moving towards a brighter future that shall equip us with greater power to ensure comfort and feasibility in our lives. The evolution of society is one of the necessary aspects of change and growth.
Online payment or the acceptance of digital money in the existing economic infrastructure is one such change. The challenges associated with online payments cannot be overlooked, nor can we rule out the risk factors, but the success in this field is becoming apparent. Adaptability is the key to growth and success, and digital payment is one such adaptability.
Online payments are the best option for quicker, faster, and hassle-free payments. They are accurate, transparent, and the best fit for the modern technological era. We can expect some even more positive upgrades in this interface soon.