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How emerging technologies are changing the world of payments

For traditional businesses, legacy software can be a business’ most important element as well as its biggest risk, so it is crucial in the height of new emerging technology that these businesses embrace change, writes Carl Strempel, CFO Imburse of Imburse Payments

The payments industry has seen a huge shift since the beginning of the pandemic. Digitalisation was something that banks and insurers were always working towards, however, COVID acted as the accelerator to kick these changes into gear. This has brought about the adoption of mobile devices and the internet in banking causing people to move away from cash as a preferred payment method.  Increasingly tech-savvy customers have started looking towards more user-friendly solutions to better service their needs, and as a result the market has been flooded with innovative alternative payment methods (APM). 

No matter how well an existing system has served a company, there comes a time where the break-even point has been reached. The cogs of the existing machine are worn through, and no amount of patches and repairs can change that. A smarter, cleaner, modularised engine is needed – and in that case, it’s perfectly fine not to own the IP of each cog. It is the journey that really makes a company propel forward. Those that fail to recognise this will be left in the proverbial dust of the Cloud. Holding on to legacy systems, however reliable they might be, blocks access to a whole range of opportunities that banks could, and should, take advantage of. Rather than a safe and stable solution, an old IT system is now a barrier that impedes banks and insurers from offering competitive digital services and requires an exorbitant (and avoidable) amount of money to maintain. 

The digitisation of payments has drastically affected the banking and insurance industry, pushing these businesses to move away from legacy IT systems and adopt modern technologies, or fall behind their competitors. According to a recent Deloitte survey speaking to financial institutions around the world, more than two-thirds of individuals believe that the use of emerging technologies could dramatically increase performance in their organizations. However, less than 30 percent of organisations are deploying these tools. Following this trend, there is now a rich variety of product offerings that make the payments market hugely competitive and force banks to invest in the latest technology to better serve their customers. However, there is more to it than simply pressure from competitors. Adopting a cloud-computing multi-payments system allows banks and insurers to have unrestricted access to other markets and countries, expanding their services to bigger customer bases quickly and effortlessly, therefore improving their global connectivity.

 

Imburse, for example, offers integration-free access to all the payment providers and technologies worldwide, cutting out time and stress of traditional deployments of technology. Whether companies are looking to collect, payout or both, Imburse gives them the possibility to expand their services to anywhere in the world, along with efficient management and security tools. 

 

Currently, there are over 450 alternative payment methods in use globally, and this number is only set to grow as new digital networks and technologies (such as blockchain and the EPI-IC pan European payment solution project) emerge to challenge the fundamental infrastructure on which many of today’s most popular payment methods are built. Where exactly it will end and who will emerge as the major victors in the pursuit of simpler digital payment solutions is yet to be seen. In the meantime, corporates who need to keep existing payments flowing, whilst innovating to stay abreast of the constant change, are facing particularly interesting challenges. 

 

The challenge for most companies to keep up with the digitalisation of banking is primarily one of adoption. It is unfortunate that many new services come with costly and time-consuming integration and reconciliation issues that can often require complex changes to existing processes and IT systems. While payments remain strategically important, they are becoming increasingly commoditised, and often new technologies are only feasible to adopt once the market share and value of the alternative proposition have been adequately proven. This leads to an abundance of missed opportunities both in terms of customer engagement and innovation, potentially proving costly in the long run as more nimble organisations react quickly to changing market conditions. 

 

The one thing that is clear is that change in the payments space is here to stay. Perhaps it is time for organisations of all sizes to reconsider their approach to payments and seek flexible technology solutions that enable faster adoption of payment innovations.

 

 

 

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