While some of us still remember waiting days or weeks for a paper check payment to move through traditional mail or those annoying carbon copies of credit card receipts making a mess, today’s finances are becoming more and more integrated with the devices we carry on our persons.
Software and hardware advances that are specific to the financial sector will continue to develop dramatically, and e-commerce is already changing further as a result:
1. Reaching Out to Those Outside Banking
Along with some of the fintech trends that will define eCommerce by 2020, one of the most significant expansions Fintech has been credited with is bringing e-commerce to those who don’t have a bank account. It used to be one needed at least an account to do anything with billing, credit cards, payments, or even being approved for other credit. The mobile device account has replaced that requirement, creating a proxy ID.
Since it is much easier for folks to get a mobile device account than a bank account, especially in rural areas in some countries, the advances in mobile device financing have overcome this problem. Africa is a great example where millions are transacting with phones and credits on phone accounts without any bank account involved.
2. Replacement of Physical Currency
Carrying money in one’s pocket has been an age-old hazard for generations. It is easy to take, can be used by anyone, and it draws unwanted attention when seen. With digital payment tools, Fintech has boosted electronic currency exchange to everyday usage, and it has reduced petty crime associated with hard cash tremendously. Again, in areas where physical loss is a big problem, digital currency networks make it very easy for one to protect his or her financial assets while still being able to pay at will or order over distance for consumption.
3. Competition is Improving Payment Services
For years, PayPal was the major king of the hill in digital payment for the masses. It was a secure platform to access, learn, and use. However, competition has popped up with numerous options and new ideas on how to improve digital payment services.
Further, U.S. government regulation of American financial players has opened the door for international companies to position themselves better to the rest of the world. All these developments have pushed big players like PayPal to up their game with increased benefits to not lose market share to the upstarts. Either way, the consumer stands to benefit from this increased competition wave in the payment Fintech arena.
4. Expanding Ideas and Concepts
Open a new way to connect, and there is going to be a crowd of people with new ideas of how to take advantage of it. Also, the commonality among all of them is the standard business model of selling a service or product to someone else. FinTech has redefined how services are transferred from one party to another for compensation, causing traditional companies to think about how they plan to survive in the next few decades.
Some professions, like lawyers, are protected by their professional licensing structures, but many others realize the ground underneath them is shifting due to digital business. The most notable market gain of e-commerce via Fintech has been consumer goods, tremendously gobbling up market share to the point that major chain stores are shuttering their physical facilities as a result. Sears, Macy’s, JC Penney’s, Bed Bath & Beyond, Toys R Us and more have fallen or are on the rocks as a result.
The only thing holding back a future wave is the convenience factor of immediate gratification – how fast can I get the product to see if I like it. Once that is resolved by speedier services (think Amazon’ prime delivery here), it will be surprising if any big stores remain at the local mall.
5. Increased International Communication
Wars happen because people stop talking and working with each other. That’s why France and Germany were purposefully linked economically after World War II. Today, FinTech is expanding and thickening financial networks between countries, making it mutually painful to separate.
This push towards integrated markets, financial tools, and related data sharing only increases the presence of a global market and strengthens ties between countries, including with the developing world. In fact, because of how much opportunity is opened, developing world markets are realizing barriers dropping that historically kept them out of economic play, such as market entry costs.
6. Reduced Criminal Impact
In the old days, if someone stole money from you, the only saving grace was whether the funds were in a protected bank account. Otherwise, one was out of luck. Today, losses due to fraud or theft can be rectified quickly with computer-driven changes, pulling back wrong charges, and restoring financial balances in days versus months. While the world realizes lots of issues with identity theft online, what’s not explained enough is how easy it is due to Fintech for problems to be fixed digitally now.
7. Easier Archiving
How many times have people had to struggle to try to find an old receipt for something or an old financial record in a shoebox? Today’s e-commerce world digitizes everything, so even if a record was misplaced, it can be found and restored quickly. This is a huge advantage not only for those trying to keep their finances straight but also a benefit for anyone wanting to analyze the data or use it for further revenue streams.
From marketing products to tax preparation, Fintech advancement has made it extremely easy for users to crunch their data faster, easier, and more efficiently. In turn, it starts producing more ways to save, make better financial decisions, and earn more income as well.
Many of the changes occurring due to Fintech go unseen, but the overall movement has changed life tremendously. Faster access, more-informed users, and higher capacity for transactions have transformed e-commerce from a hobby to a critical revenue path for business today. Where it goes for the future will depending cooperation, but it looks to be a pretty fantastic set of possibilities on a global level.