The evolution of digital payment technology is reshaping how we conduct transactions. However, amidst these advancements, concerns persist regarding their security, broader acceptance, and accessibility.

Can emerging technologies such as blockchain and decentralization fulfill their commitment to a more secure and inclusive payment system? Ensuring widespread adoption among various user groups, especially in underserved communities, is crucial. Additionally, how will governments contribute to regulating the digital payments landscape?

These questions were among the topics discussed at the World Changing Ideas Summit, particularly in a panel titled “Tomorrow’s Currency: Powering the World of Payments.” 

The panel included influential members from the payments industry, offering their valuable perspectives. This address brought attention to the challenges and promises of emerging technologies such as blockchain and decentralization, emphasizing the crucial need for broad adoption, especially within underserved communities.

ENSURING SECURITY OF DIGITAL PAYMENTS

Jamal Al Awadhi, the Chief Operating and Experience Officer of Wio Bank, started the conversation by highlighting the role of emerging technologies in safeguarding the security and integrity of digital payments. He discussed various methods that institutions either currently employ or should consider implementing.

He emphasized that using biometrics, coupled with the ongoing implementation of enhanced encryption technologies across payment platforms, simplifies and streamlines the payment process for customers. Simultaneously, these measures ensure the security of transactions from point to point.

He also underscores the significance of blockchain, asserting its potential to revolutionize payments. By offering a transparent and immutable record of all transactions, blockchain facilitates easier tracking of the movement of money, aiding banks and customers in identifying and preventing fraudulent activities.

In conclusion, Al Awadhi cautioned against the constant innovation by fraudsters, stressing the necessity for financial institutions to maintain vigilant monitoring of transactions and transaction data. He suggested leveraging AI to identify and counter emerging fraud methods effectively.

“It is a bit of a whack-a-mole. You’re almost chasing a moving target. You’re only as good as the last one you caught, and then they innovate. But I think a number of these technologies can help and need to be incorporated at an institutional level,” he said.

WIDER USER ADOPTION AND FINANCIAL INCLUSION

Sandeep Gomes, Regional Head of Merchant Acquiring at Amazon Payment Services, emphasizes the potential for enhancing user experience to drive broader adoption of digital payment platforms.

Gomes argues that the “key mantra for success” lies in listening to customers. He clarifies that customers seek improved, seamless payment experiences, secure processing environments, and stable, reliable platforms. By attentively understanding customer needs, financial institutions can devise solutions that alleviate these concerns, ultimately fostering wider adoption of digital payments.

Gomes stresses the often overlooked language and communication features of apps, noting that many popular communication apps are predominantly in English, posing a barrier for non-native speakers. He argues the importance of educating users on effectively using these apps to overcome language-related challenges.

Ankur Sethi, Chief Operating Officer – Ecommerce at Aster DM Healthcare, spoke about the importance of merchants finding the right balance between customer convenience and security. According to Sethi, the first step is ensuring the constant protection of data. This involves collaborating with regulated partners that adhere to all relevant data privacy regulations.

In the realm of financial inclusion, Sethi asserts that digital footprints play a crucial role in integrating the underserved into the financial system. By monitoring individuals’ digital interactions, financial institutions gain a deeper understanding of their financial habits and requirements. This valuable information can then be leveraged to create innovative products and services specifically tailored to the distinct needs of the underserved population.

THE CRUCIAL ROLE OF PAYMENT SERVICE PROVIDERS

Gomes highlights the pivotal role payment service providers (PSPs) play in the digital payments landscape. These entities facilitate businesses in securely and efficiently accepting various payment methods. As a platform, PSPs establish the connection between merchants, payment networks, and banks, ensuring swift and accurate processing of transactions.

In addition to providing diverse payment options, PSPs are critical in safeguarding customer data and ensuring compliance with regulations. 

Their role extends to delivering a seamless payment experience for merchants and customers, ensuring speedy and efficient transaction processing despite technical challenges. Gomes encourages PSPs to offer cost-effective payment solutions and support merchants by addressing troubleshooting and facilitating dispute resolution.

FUTURE INNOVATIONS AND COLLABORATION

Al Awadhi says the future of digital payments is all about adoption. “We are seeing innovation in payment systems across the board, from the blockchain to central banks. For example, peer-to-peer payments using phone numbers are now possible.”

Gomes sees this as one stride towards a future with a broader spectrum of payment options. This future may include electronic checks and novel blockchain-based technologies designed to capitalize on speed and trackability in the payment process.

Gomes stresses the importance of collaboration and knowledge-sharing to drive innovation. He believes the government assumes a leading and pivotal role in regulating the finance sector, primarily because of its sensitivity.

“We all know finance is generally a sensitive area, whether for governments, individuals, or consumers. And that’s why this industry is regulated and moves slower than other industries,” he explains. 

Gomes emphasizes the government’s significant responsibility in educating and empowering consumers regarding digital payments. He stresses the necessity for collaboration between the government and financial institutions to devise localized solutions and train staff to effectively communicate the advantages of digital payments to consumers.

Jamal also emphasizes the need for collaboration, saying, “I think bringing together the regulators, consumers, merchants, the payment processors, and starting to share that information will increase visibility and enable accessibility.”