It seems funny to think that digital payments hardly existed as little as thirty years ago. It is difficult for people who now make transactions easily online to understand that it was a lack of secure payments that nearly meant eCommerce did not get off the ground. At the time of the dot.com boom, everyone was so carried away with the possible they did not always focus on the practical. While online shopping was a fantastic idea, there were enormous pitfalls that meant it was an idea ahead of its time.
- Internet connection speeds were so slow it was almost impossible to display any images or content other than very low-resolution ones
- Online security was non-existent, and any traffic could easily be intercepted
- There were no secure, safe or digital ways to pay for anything
The last point was a significant problem. At the time, most people paid cash for their purchases and sent off cheques for mail-order items. Neither of these was practical for online shopping (although cash on delivery remained an option for many years). Credit and debit cards did exist, but the security was inadequate. People wanting to pay for things remotely using payment cards were advised to send separate emails and texts containing card numbers and expiry dates, and there was a good deal of manual processing.
It was the advent of PayPal that was a breakthrough. Buyers and sellers on eBay could simply exchange email addresses to send and receive money. It was revolutionary. The big play platforms like Visa and Mastercard scrambled to keep up with their ‘Verified’ schemes, but everyone was pretty distrustful. One option for digital transactions that was briefly very popular was paying for services and making donations using your mobile phone bill.
Fast forward to 2023, and we now expect to be able to pay for whatever we want in various ways. Fintech innovations have exploded, and we now have umpteen choices, not just in the payment platforms we use but also in the currencies we use. Even digital currencies are no longer the preserve of Bitcoin speculators, with several country’s central banks now looking to create their own. The UK Government and Bank of England held a public consultation on this issue earlier in the year. The outcome could have a significant effect on what happens next in payment solutions for online industries.
Many of us rarely use cash these days, and whether there is an official digital currency or not, we use our money digitally whether we are buying physical goods or services. However, there are still a large number of people who, for varying reasons, want an alternative to eWallets or services like PayPal for making online purchases. It could be because they do not have a bank account or because they like to keep certain expenditure areas separate from others. This is where prepayment options come into their own.
So much of our entertainment is now online, and we buy digital content all the time, like streaming TV, playing cloud-based games and listening to music. Another top-rated digital service is online gambling. There is no getting around the fact that a player needs a digital form of currency to play at online casinos or make online bets. However, it is possible to have a service like Paysafe, which circumvents the need to link a bank account or banking service to a casino account.
Paysafecard-powered casinos are just like any other online casino. Many of the biggest names in the industry, like PokerStars, Unibet and Casumo, accept it as just another payment method. Paysafe is a prepayment method that can be ‘loaded up’ with cash and added to your eWallet. This payment method has been around since the internet took off and has continued to innovate to be current and relevant. It is a secure and popular way to pay for digital services. This allows customers to keep their budget pots separate but has all the convenience of using ApplePay or GooglePay to make the transaction.
One of the biggest trends of recent years has been the Buy Now Pay Later services like Klarna and PayPal’s Pay in Three. These services let the customer buy goods now and split payment over an agreed time scale without paying interest as on a credit or store card. As the price of goods and services rise steadily, this service is widely used and is particularly popular with the under-thirties. Why wait when you can have something right now?
There is also a trend for interest-free/low-interest plans for bigger ticket items bought online over a longer period. These include schemes like PayPal Credit, and many stores have their own in-house versions (although external finance companies usually run these). The truth is, purchases have been made on the never, never for years, and these schemes are just an alternative way of looking at the funding. In the past, we might have had a wallet full of credit cards, but now we might have e-wallets linked to various Buy Now Pay Later schemes.
Keeping customers secure is of prime importance, too, and we can expect to see more in the way of two-factor authorisation and biometric approvals. However, whatever solutions they come up with, fraudsters will look to break them.