The global payment landscape is evolving at a dizzying pace. In 2020 alone, the Fintech industry boomed exponentially by at least 30% across the world and 55% in Southeast Asia when all other sectors were falling. The COVID-19 pandemic platonically changed the entire landscape of the global economy and forced the global leaders to consider effective business strategies to keep running their businesses.

In Bangladesh, this new revolution of Fintech was pioneered by Tanvir Mishuk with the introduction of Nagad. Since the digital financial system is of the essence here, so people started asking – Are digital financial services any safer than traditional services? 

The marriage of technology and financial services is one the best innovations of the 21^st century. In fact, it largely proved that digital payment goes hand-in-hand with businesses in order to keep them running when traditional transaction remains unavailable. But the popularity of digital services poses an important question to the global users of fintech services.

Is Digital Financial Service Reliable? 

The rise of cashless payment during the pandemic caused by COVID 19 is the standing proof of how people rely on digital financial services. It gives all the more reason for people to feel confident about digital payments – domestic and international. And that’s because of their proven security and integrity to keep all things running. And as such, people feel more convenient to transact using cashless media like – mobile phones, credit cards, and etc.

The exponential increase of digital payment services globally reached a transaction value of US $5,204 billion, of which China holds the biggest share of digital payment of $2,496 in terms of usage of digital payment systems. This can be advocated by McKinsey’s 2020 Global Payments Report, where it is expected that the global cash transactions will decline by 4-5%.

What Makes Digital Financial Services Reliable?

Digital payment option is more convenient and safer than traditional transaction in many ways, and the most prominent feature that defines it is – multi-level security/identification phase. Digital payment systems are designed to authenticate the user by using various features such as – fingerprint scanning, facial recognition, One-Time-Password (OTP) for verifying the user account, NID verification, end-to-end encryption for an uninterrupted transaction, and etc.

In fact, there are two main reasons why the user experience of digital payment services has been so seamless and quickly accepted by the customers:

1. Authenticating the user’s information prior to a transaction and making it easier for future transactions to take place easily.
2. End-to-End encryption during the transaction process ensuring the security of the process each time the transaction takes place.

These factors largely contribute to why people easily adapted to cashless payment technology. But wait, there’s more…

Cash Payments vs. Digital Payments

A paper-based payment system is expensive for any business and the customer it serves. It takes between $4-20 to process a single check and also up to 15 days to clear a check if there’s any dispute. Besides, paper checks slow down the cycle of payment which causes the delay. This expense is completely irrelevant in digital payments as the cash is processed instantly and in no time.

Accepting checks as a form of payment makes the businesses susceptible to frauds which include – identity theft, forgery, and etc. This is not a problem with digital payment as the verification is done prior to a transaction which eliminates the chance of fraudulent behavior.

Mitigating a dispute over payment is difficult to handle when the payment happens via check. The verification of payment is a complicated process requiring a lot of time. This does not happen in the digital payment system because the dispute claims can be easily refunded online.

Integration of digital payment services with other reputed entities like – government services, banks, shopping brands, eCommerce websites, and apps make it easy for users to trust digital payment as much as a physical cash payment, if not more. In fact, famous platforms like – Facebook, Instagram have integrated their own shopping ecosystem and in-app payment system to make payment easy for the consumers.

In Conclusion

2020 had witnessed a seismic change in consumer payment preferences. So, 2021 will be all about addressing and adapting to the change, seizing the opportunity to bring in profits and ensure easy digital transactions along the way.

The effects of the pandemic that started last year are also carried onto this year, and while economic growth took a severe hit, the growth of Fintech is likely to be hit as well. But regardless, 2021 will be a challenging year for the global economy, but one thing that certainly holds true is a bright future for digital financial services.