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How The Payments Industry Is Working To Improve Financial Inclusion

The era of digitalization has entirely transformed the way money moves today. These days you don’t have to carry a fat wallet in your pocket but just a smartphone. Besides, the Fintech industry has disrupted the financial sector to such an extent that more people are now engaging in digital methods of controlling their wealth.

To garner new customers, it has become imperative for every financial organization to build a digital solution. Not just for the sake of profit but to level up the competition. This has directly led to the financial inclusion of more and more people.

There are many factors that have led to digital transformation in the finance sector. One of those key factors is digital payment solutions. The payment industry is the key magnet that has garnered more users in the digital space. Let’s see how!

Payment Industry and Financial Inclusion

Financial inclusion is a broad term and includes various aspects. Hence, we cannot say that only the payments industry is contributing to it.

However, it is safe to say that it is having the maximum impact. You will be amazed to know that digital payments will hit the $6.6 Trillion mark in 2021. This is almost a 40% hike in two years. The stat is clear proof that payment apps are ruling the market other than trading and banking apps.

The question that pops here is how? Let’s see!

Digital Banking Made Easy

Unlike the traditional banking system, one does not have to visit the bank every time they need money or pay for something. Fintech app solutions have made it extremely easy for people to hold on-the-spot transactions anywhere and anytime.

Payments apps are the most common type of fintech app solutions used by people. As per stats, 39% of the users in the US use mobile payments more frequently.

There are banking apps, too but payments apps are more widely used as they can also be linked to the user bank accounts.

eCommerce

The eCommerce market is on the rise. As per stats, it is expected to grow at the rate of 14.7% from 2020-2027. This rise in the eCommerce market has led to a boost in online payments.

The 2020 stats reveal that 60% of Indian consumers paid for their shopping on Flipkart and Amazon via digital methods. Moreover, the COVID-19 lockdown has led to a 40% increase in the use of digital payments by Indian users.

There are many reasons behind this:

  • Rewards and discounts: Most of the digital payment solutions today offer several discounts and rewards for the payments customers make for eCommerce products. Apps like Google Pay, PayPal, Drop, Amazon pay offer great deals on various bank credit and debit cards.

The provision of discounts and rewards has led more people to use payment apps. How?

As per stats, 70% of millennials use mobile payments for rewards. This makes eCommerce one of the key reasons for the adoption of payment apps.

  • Convenient: Convenience is another factor that has led to the adoption of payment apps.

As the users don’t have to search for the exact amount that they need to pay in their wallet and don’t have to stand in long queues to pay bills, the digital transformation in the finance sector has surely made them wallet-free.

Contactless Payments

Since the inception of COVID-19, the trend of contactless payments is on the rise. No matter if you order food, clothes, or anything else online, it has become necessary for people to conduct contactless payments. Not only necessary, but people are more inclined towards paying by scanning QR codes and through technologies like NFC and RFID.

The reasons behind this are that these transactions are safe and secure. Moreover, they are faster and help banks for brand building and boosting revenue. Most importantly, they fall in favor of protecting people from health-related issues.

Trading

There are many of us who like to trade, like buying and selling stocks. The selling and buying of stocks was a job of hassle earlier, but today, it has become a walk in the park for the people. The reason behind this is the introduction of trading and payment apps.

There are various digital payment solutions developed by top Fintech app development companies around the world. Some of the best examples of these solutions are:

  • Paytm: Paytm is an Indian payments app developed by One97 communications. It offers its users the ability to pay bills for various utilities. Recently, it also started offering traders stock trading within the app.
  • Fidelity: It is not exactly a payment app, but it is fit for a person who is a beginner in the field of trading. The app does not require any minimum deposit, while it offers you a lot of services at a low cost.

Money management

To keep your budget intact, you need to ensure that you don’t spend more than required. Hence, it is necessary to have an app that can help you keep your expenses in check. There are many Fintech app solutions that enable users to do this.

For example,

Mint: It is a brilliant money management app that helps users achieve their long-term financial goals. Every time you get close to your budget limit, it sends you a warning sign.

Other than this, there is Credit Karma, Acorns, Digit app, and many others that have contributed to financial inclusion. You will be amazed to know that around 14% of people use a budget app daily in the UK.

So, these apps also play a key role in digital transformation in the finance sector. And as they are also used for payments, they form a part of the payment industry too. All credit goes to the Fintech app development industry.

Final Words

The digital payments industry is the backbone of the world financial system at present. Hence, Fintech app development companies are working their best to bring out something unique. This has not only led to cutting-edge advancements but has also made the life of people easier.

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