How the Corona scare has empowered contactless innovations?

Covid-19 has changed the way we live our lives. The fear of the virus is so overwhelming that people are looking for safe options to transact. This situation has benefitted contactless innovations immensely. Majority of the population has increased the usage of mobile wallets and tap to go credit cards. Mobile wallets in India such as PayTm, PhonePe, Google Pay etc. have witnessed. In these tough times, it is very much evident that more and more people will be using this kind of payment going forward. As a matter of fact the World Health Organization feels that, “As far as possible it is advisable to use contactless payments to avoid the risk of transmission”.

Technology surrounding Contactless innovations

Let us familiarize with the technology driving the contactless innovations with regard to payments. There are two kinds of payments being used. One happens to be contactless cards and the other using the e-wallets.

Contactless Cards:

In a bid to effect a transaction, the card communicates with a POS terminal via NFC called Near Field Communication or Radio Frequency Identification. After establishing the communication, the card produces a unique code for each transaction to provide safety.

With no requirement of a signature, these payments have a limited transaction which is called Cardholder Verification Limit. With this kind of payment gathering traction across the world, financial institutions have also upped their limit of CVM to permit customers to transact safely.

E-wallets:

These are a kind of solutions that help users to pay with ease. This is a very secured method as well. Over here every sensitive data gets replaced with a token. It also safeguards sensitive personal data such as card number against misuse. However, the device doesn’t store the real account number on it. Tokenization along with Radio Frequency Identification offers a swift, easy and safe way of making transactions.

Advantages of Contactless Innovations in payment?

No touch involved

This is indeed heartening in these times as there is no contact between you and other person during a transaction. So, you can easily frustrate coronavirus, literally.

Swift

It is believed that these transactions happen within a few seconds. So, speed is almost assured.

Safety

This technology is very dependable and safer than other modes of payment. It is an effective counter against fraudulent practices.

Excellent customer experience

Having a seamless and swift checkout procedure, customers are having a gala time.

Round-the-clock payment

As for contactless payment mode, people get the privilege to pay from anywhere and at any time. This is available to users all the time, so it can be a highly desired option.

How do fintech and banks satisfy the evolving demands of customers?

They must scale up their operations and grow their technological prowess to meet the demands of customers. This can be done through:

Banks and Fintech partnership

Fintech has grown considerably with regard to payments. This has prompted several Fintech and banks to come together a lot.

It is very beneficial for both banks and Fintech. Through collaboration Fintech can get access to a lot of banks and infrastructure and at the same time permit banks to inculcate new skills and also make innovative Fintech solutions.

The collaboration is not simply restricted to payments as there have been incidents of offering mentorship to start-ups in early phases.

Digital revolution with open banking

Open banking has been accelerating digital services for the past few years. It has third party providers and banks to nurture the customer financial information permitted by customers. It enhances relationships with users. Open banking even has decentralized policies permitting users to exchange their data with banks. It enables users to handle their finances efficiently.

Bettering customer experience

Customer experience has to be accorded high priority to improve digital services. It is a significant aspect as it will be chiefly responsible for across the board adoption of contactless services by the customers.

Crux of the matter

The pandemic might have dented the prospect of every business, but those in digital operations have not at all been impacted. Contactless innovations have proved to be a boon for users during the Covid-19-induced new normals. Going forward as well, it won’t be strange or baffling if contactless payments set new trends.