Companies are re-adapting their businesses to offer their users more convenient solutions and not lose place in the digital payments ecosystem
The pandemic was the crucial point for the digital payments and e-commerce will begin to have more weight among consumers, either because they could not do it physically or because the banknotes are another vehicle of contagion.
Viruses aside, 2020 will be remembered in history like the year that digital transformation was able to accelerate in a handful of months, a process what would have taken years.
What’s more, the coronavirus contingency pulled almost 4.8 million new Argentine bank accounts who entered the system to be able charge The different Social helps.
Meanwhile, the launch of 3.0 transfers and the alliance of more than 35 banks for the launch of the MODO digital wallet have finished laying the foundations for the construction of an ecosystem in which all financial market players have a lot to do.
Valeria Celia Rodriguez, director of Lyra Argentina, assures iProUP that physical money will tend to disappear and emerging economies, with low rates of banking and financial inclusion, are a much more likely scenario to innovate in technology and include new segments.
“Both the wallet providers and the users themselves determine the market offer and the trend is interoperability. In Europe it has already happened many years ago and In Brazil, there has been a multiadquirencia in means of payment for more than a decade. For us it is something recent, but it had to happen“, he says.
The credit cards are not alien to this reality and are reconverted to adapt to new demands and solidify its place in the digital payments ecosystem with innovative solutions.
Since Visa reveal that almost half of consumers would not shop at a store that only charges with methods that require contact with an ATM or a shared machine, such as a card reader.
In addition, they account for the ranking of preferred and used means of payment During last year:
- Throughput: 72%
- Credit: 63%
- Cash: 44%
From the company they point to iProUP that more than 50% of the motivations to choose a way of operating revolves around consumer needs, who will only change how they buy or pay as long as they see an incremental value in doing so.
In this context, the whole market accelerates the launch of new products. Agustín Beccar Varela, general manager of Mastercard Cono Sur, clarifies that they work in the digitization of transactional media for years, although efforts were intensified during the pandemic.
“Decreasing the use of cash is essential to advance financial inclusion, reduce costs, move towards a more formal economy and facilitate everyday life of people, “he says.
In this sense, figures of Mastercard and Kantar during the pandemic warn that:
- 56% of users believe cash payments will cease to exist by 2030
- 42% expect all financial transactions to be in real time
- 37% are enthusiastic about paying using just their thumb
“The future will be increasingly ‘multirail’, that is to say, will combine complementary payment methods, with different attributes, to be chosen by an increasingly autonomous and trained consumer. This allows us to expand our value proposition “, anticipates Beccar Varela.
Furthermore, he adds that the pandemic transformed the consumer and it took him to a 24×7 virtual realm, in which turned to digital payments and contactless, which avoid contact with the merchant.
From Mastercard they note that:
- Six out of 10 Argentines increased the use of these transactional systems (contactless or digital)
- Half of the people consider that it is an excellent alternative if they do not have a physical wallet
- 42% saw the benefit of not having to carry a purse or wallet.
For Rodríguez, Visa and Mastercard play an autonomous and different strategy, but both have the enormous task of converting to the new uses that the consumer demands while accompanying the adaptation to the technologies available in the market:
- Tokenization protocols
- Authentication of the cardholder or whoever pays the transaction
- Plastics replacement by contactless
- Use of credit cards on the cell phone without contact or plastic
The secret of Visa
Three years ago when International Visa arrived in the country, brought a digital agenda where tokenization is a key element in the development of contactless solutions.
Visa Tokenis a security technology which replaces information, such as the account number and expiration date, for unique digital identifier (a credential or “token”) that can be used for payment purposes, without exposing sensitive information.
“Contactless or touchless systems are the catalyst for the new generation of payments and the way to reach countless possibilities offered by the world of connected devices “, they explain from the company.
Only in the last 12 months, Visa issued more than 680 million tokens and they hope that this year there will be 2.1 billion digital shoppers globally.
For its part, Tap to Phone, the technology that turns the cell phone into a terminal, without using any additional equipment, is already active in more than 15 markets such as Belarus, Malaysia, Peru, Russia and South Africa.
The number of businesses that use it increased by 200% compared to last year. This tool will be introduced in Argentina, Brazil and other countries of Latin America.
“Added to all this is the strong adoption of contactless payments by consumers, paving the way for the next generation of technologiesincluding wallets on phones, smart watches and other devices connected to the Internet of Things (IoT)“, they add.
In October, it was launched asunique interoperable QR code solution that allows businesses and consumers make and accept contactless paymentslinking your Visa credit, debit or prepaid cards to your devices. Like Mercado Pago, the technology allows scanning and paying, also at POS terminals.
This option is being tested in Uruguay, but the idea is to do it extensive to other countries, among them Argentina, after the firm met with the BCRA after the announcement of Transfer 3.0.
In addition, the company also advances in cross border payments. Last year launched Visa B2B Connect, a network that enables financial institutions to process global international transfers at lower cost and faster than traditional systems.
This initiative is based on Hyperledger Fabric, an open source blockchain developed by professionals from the Linux Foundation to take advantage of all the digital money possibilities that provides the technology that brings Bitcoin to life and to other cryptocurrencies.
In Argentina, Mastercard offers digital payments that run on the rails of debit, credit and prepaid products. While in the rest of the region and the world they already develop real-time P2P (person to person) and P2M (person to commerce) charges.
Mastercard Send is the interoperable platform that allows the sending of funds in real time, 24 hours a day, another solution available globally that, for now, is not offered in the country, although the technology is ready for its next implementation with local partners.
In December, TransferGo and Mastercard announced an agreement that will allow clients from 20 countries to carry out international transfers from any card or bank account directly to Mastercard plastics, in real time.
Through Mastercard Labs the company channels all its research and development projects internally. While with the program Mastercard Accelerate twork together fintechs – such as Uala-, helping them in the incorporation of technology, cybersecurity solutions and providing the advice of its experts.
“If we talk about innovation, we consider it essential to empower technology companies, since those that operate in Latin America and the Caribbean play a fundamental role in accelerating inclusion,” emphasizes Beccar Varela.
In Argentina have agreements of different nature with almost all banks and most of the fintechs . The most recent is a alliance with SeSocio, the first investment marketplace in Latin America, with whom they launched a card that allows you to pay for purchases directly with funds from those investments.
The experience gained during the pandemic is likely to drive the arrival in the country of many of these developments which are already available only in other markets.
The interoperability is the basis of digital payments and it will open the game to all the actors of the ecosystem for the development of new solutions that are increasingly tailored and to the liking of users.