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What the future of digital payments will look like

The world of digital payments it continually evolves, and the advent of new technologies and innovative solutions only lays the foundation for a host of opportunities that will fundamentally change the way we conduct financial transactions.

Mobile Wallet, the wallet within reach of your smartphone


Con “mobile wallet”refers to the ability to manage and make payments, including peer-to-peer (P2P) money transfers, directly from your smartphone. Thanks to a dedicated application, the phone becomes a sort of “digital wallet“where possible store payment cards, identity documents and loyalty cardsto monitor expenses in real time.

If he “mobile payment” is the ability to conduct transactions directly from the mobile phone that can be enabled also via biometricslike fingerprints or even the iris, the “P2P transfer” is one of the types of Instant Payment most widespread since it is based on the transfer of money in real time from person to person, through distributed peer-to-peer networks.

Having become famous for file sharing, P2P is now used on platforms such as Paypal, Satispay or Postepay to split expenses, send gifts or contribute to online collections. However, the prospect of using facial recognition to pay, as was experimented in Tokyo in Yahoo! stores, is distant. Mart for the current biometrics rules enshrined in the GPDR.

A mobile wallet is like having a wallet on your phone with which to manage and make payments, and P2P money transfers

There are various types of mobile wallets, issued by financial institutions, banks, telephone operators, independent third parties and large commercial chains. Some “closed-loop” perform transactions only to and from a specific company, while others store payment information on the device (device-centric) or elsewhere, such as in cloud services (device-agnostic).

Device-centric mobile wallets can be divided into “proximity wallet” who carry out transactions in proximity to the device by interacting with the operating system and “in-app wallet” that allow remote payments. Examples of proximity wallets include Apple Pay, Google Pay and Samsung Pay, while some “closed-loop” apps fall into the category of in-app wallets.

With the Internet of Things, the car pays for itself


Another trend concerns theInternet of Things (IoT), so objects connected to the network and the credit card can manage payments without direct user intervention. The most famous example is that of the refrigerator that orders groceries by analyzing what is missing. But among the Smart Object Payments the most convenient is certainly the car.

Directly from the dashboard with a button or a voice command, you can ask Smart Car to pay for refueling, parking or tolls, but also lunch, without lifting a finger. Volkswagen and Mercedes already offer models that “pay for themselves” but for now exclusively services and products of the manufacturer, not of third parties. However, the options are also growing because the market for connected vehicles is on the rise.

In the not too distant future, cars will pay tolls and parking autonomously, making drivers’ lives much easier

The future perspective places thefeatured voice interaction, with Big Tech reclaiming their seat at the table. If currently, manufacturers are working internally to develop their own payment systems, they will eventually have to deal with the technological preferences of customers, who often gravitate towards solutions offered by giants like Apple, Google and Amazon.

This level of automation could redefine the concept of the vehicle, transforming it from a simple means of transport into a real one traveling payment method which not only improves convenience, but also accuracy in payments, reducing the risk of human errors.

Blockchain brings transparency and decentralization to the world of digital payments


The growing collaboration between Big Tech and the financial sector is a sign of a time when technology is radically redefining how we think about and manage payments in search of new more convenient, safe and efficient methods. In this transformation, Blockchain plays a crucial role.

Often associated and sometimes confused with Bitcoin, the Blockchain concept is demonstrating its value in multiple sectors, including digital payments for which it guarantees maximum security and reliability by leveraging principles of transparency, immunity from fraud and decentralization secured through the use of encrypted distributed ledgers that provide reliable, real-time verification of transactions bypassing traditional financial intermediaries.

Since 2016, central banks around the world have paid attention to Blockchain and Distributed Ledger as enablers of a digital currency to which the characteristics of cryptocurrencies such as programmability and disintermediation are attributable. Today, numerous financial institutions and investors have recognized the transformative potential of blockchain.

The idea of ​​a digital currency issued by a central bank, with the advantages of security and stability that it brings, joins cryptocurrencies that continue to gain ground

In October 2020, PayPal unveiled a new service for buying, holding, and selling cryptocurrencies from PayPal accounts. In September 2021, Visa announced its plans to create a cross-chain payments hub that would facilitate the transfer and exchange of digital assets across different blockchains and payment channels. In December, it introduced a cryptocurrency advisory service to assist clients in the realm of digital currency and non-fungible tokens (NFTs).

These significant developments that see payments companies investing in blockchain and cryptocurrencies are set to build confidence in the industry, which will translate into increased revenues for the global blockchain market.

Artificial Intelligence for secure and customized digital payments


Although theArtificial intelligence Although it has been part of the financial landscape for some time, its use has remained rather limited. Yet the advantages are many and range from greater security thanks to timely fraud detection a personalized user experiences thanks to the analysis of spending behaviors.

Machine learning algorithms continually improve their ability to identify suspicious transactions, including the total amount spent, the location of the transaction and the identity of the provider, triggering thorough checks for those that deviate from a user’s usual spending patterns. This not only safeguards customers but also minimizes losses for both merchants and financial institutions.

Artificial intelligence not only enables the processing of an increasing number of transactions, but also ensures minimal fraud and errors

But artificial intelligence can also recommend relevant offers, discounts and rewards, creating a more engaging checkout journey for customers. In addition to making transactions faster and more efficient, it can improve customer service through the use of chatbots, which thanks to Natural Language Processing (NLP) can offer personalized, automated and scalable assistance, saving companies billions of dollars in operational costs and time. An approach that could evolve towards delegating purchases on third-party platforms to bots.

To know more: Digital payments, what they are, what they are, innovation and platforms


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