Payment Systems
Apple Pay, Google Pay & Samsung pay
When Apple Pay was first announced back in 2014, it seemed like a revolutionary idea that would take a while to catch on. Six years later, a little under half the iPhone users out there are paying with their phone, with Google and Samsung Pay growing on Android as well. Apple Pay currently accounts for 10 percent of all global card transactions.
That’s impressive, but I can’t help feeling it should be even more popular than it is. If you aren’t using Apple and Google Pay at the grocery store, it’s time to start — it’s better than a credit card in pretty much every way.
o start, credit cards have gotten annoyingly slow, thanks to the new chip-based readers. This new (old) tech is much slower than the old swipe-to-pay credit cards of yore, making plastic a bit more of a hassle. Pull out your wallet, dig through to find the right card, put it in, wait, then do it all in reverse when the reader beeps at you like you’ve accidentally tripped some sort of alarm.
With Apple and Google Pay, you just pull out your phone, unlock the home screen, and hover it over the reader — it’ll “swipe” your digital credit card instantaneously, faster than any chip-based card. You don’t even have to open the app — just unlock your phone and tap. If you have a smartwatch, you might be able to tap it to the reader without even touching your phone.
Of course I’m exaggerating the annoyance of credit cards just a bit here, but I really can’t overstate how fast and easy tap-to-pay is. Pulling out your card just feels archaic in comparison, and once you’ve tried Apple and Google Pay, you’ll want to use it whenever possible.
When tap-to-pay systems first launched, it felt like they were only available at a few select stores — popular ones, sure, but few and far enough between that you were still using your credit card the vast majority of the time. That’s no longer true. Not only have more national chains caught up (from grocery stores to pharmacies to the mall and beyond), but smaller mom-and-pop shops often offer the service as well, thanks to Square and other modern payment kiosks that accept tap-to-pay. In my neighborhood, I have the convenience of Apple Pay at the grocery chain down the street as well as the independent bagel shop around the corner. It’s becoming rarer and rarer that I actually have to pull out my wallet. Of course, this may vary depending on where you live and the stores available to you — but it’s becoming much more widespread.
Finally, as with all things digital, some folks are hesitant to switch to a service they aren’t familiar with — especially since digital security hasn’t had the most confidence-inducing decade.
But credit cards haven’t exactly been bastions of security either — as anyone who’s had their card stolen will tell you. In some ways, Apple and Google Pay are actually more secure than their plastic counterparts. Both services use tokenization, creating a unique code whenever you make a purchase — the merchant never sees your credit card number, and even if a thief were to somehow steal that code, they wouldn’t be able to use it to make more purchases. This is the same enhanced security your credit card’s chip uses.
For some reason, though, our credit card chips don’t require PIN numbers like they do overseas, so if anyone steals your card, they can make purchases for you. Apple and Google Pay, on the other hand, are locked behind the fingerprint sensor or face recognition on your device, adding an extra layer of security that credit cards don’t have. So even if someone were to steal your phone, they’d have a hard time using it for a Best Buy shopping spree. Oh, and if you lose your phone, you can turn your digital wallet off remotely with Find My iPhone and Google’s Find My Device.
None of this is to say you can leave your credit card at home — though I have, accidentally, on many occasions and still been able to pay. Depending on where you live and shop, you may still have plenty of local markets and old-school stores that don’t offer it. But you should take five minutes to set it up anyway — it’s amazing how many people I see in line at Vons pull out their credit cards while their phone is already in their other hand. Once you use it a couple of times, you’ll wonder why you didn’t set it up sooner — and you’ll want to use it as often as you can.
Cash, cheques, credit cards, debit cards, stored valued cards e-transfer
A payment is the flow of funds from the payer to the payee, usually as compensation for a product or service or to pay off a liability. Most personal payments involve the exchange of cash. Although money, as coin and currency, has served as the medium of payment for millennia, and continues to serve that purpose in most personal transactions, it is severely limited.
Cash Payment System means a payment system that generates any transfer of funds through a transaction originated by cash, check, or similar paper instrument. This includes electronic payments to a financial institution or clearing house that subsequently issues cash, check, or similar paper instrument to the designated payee.
E-commerce sites use electronic payment, where electronic payment refers to paperless monetary transactions. Electronic payment has revolutionized the business processing by reducing the paperwork, transaction costs, and labor cost. Being user friendly and less time-consuming than manual processing, it helps business organization to expand its market reach/expansion.
Credit card is one of most common mode of electronic payment. Credit card is small plastic card with a unique number attached with an account. It has also a magnetic strip embedded in it which is used to read credit card via card readers. When a customer purchases a product via credit card, credit card issuer bank pays on behalf of the customer and customer has a certain time period after which he/she can pay the credit card bill. It is usually credit card monthly payment cycle. Following are the actors in the credit card system.
Debit card, like credit card, is a small plastic card with a unique number mapped with the bank account number. It is required to have a bank account before getting a debit card from the bank. The major difference between a debit card and a credit card is that in case of payment through debit card, the amount gets deducted from the card’s bank account immediately and there should be sufficient balance in the bank account for the transaction to get completed; whereas in case of a credit card transaction, there is no such compulsion.
Debit cards free the customer to carry cash and cheques. Even merchants accept a debit card readily. Having a restriction on the amount that can be withdrawn in a day using a debit card helps the customer to keep a check on his/her spending.
E-Money transactions refer to situation where payment is done over the network and the amount gets transferred from one financial body to another financial body without any involvement of a middleman. E-money transactions are faster, convenient, and saves a lot of time.
Online payments done via credit cards, debit cards, or smart cards are examples of emoney transactions. Another popular example is e-cash. In case of e-cash, both customer and merchant have to sign up with the bank or company issuing e-cash.
A Stored-value card is a payment card with a monetary value stored on the card itself, not in an external account maintained by a financial institution. This means no network access is required by the payment collection terminals as funds can be withdrawn and deposited straight from the card.
Fintech
Fintech is a term used to describe financial technology, an industry encompassing any kind of technology in financial services — from businesses to consumers. Fintech describes any company that provides financial services through software or other technology and includes anything from mobile payment apps to cryptocurrency.
Broadly, fintech describes any company using the internet, mobile devices, software technology or cloud services to perform or connect with financial services. Many fintech products are designed to connect consumers’ finances with technology for ease of use, although the term is also applied to business-to-business (B2B) technologies as well.
Fintech has made inroads with dozens of applications and has changed the way consumers access their finances. From mobile payment apps like Square (SQ) — Get Report to insurance and investment companies, fintech has disrupted traditional financial and banking industries — and potentially poses a threat to traditional, brick-and-mortar banks or financial institutions.
Initially, fintech referred to technology that was applied to the back-end systems of banks or other financial institutions — but has since grown to encompass a plethora of other applications that are more consumer-focused. In 2020, it is possible to manage funds, trade stocks, pay for food or manage insurance through this technology (and often on your smartphone).
Crowdfunding Platforms
Companies like Kickstarter, Patreon, GoFundMe and others illustrate the range of fintech outside of traditional banking.
Crowdfunding platforms allow internet and app users to send or receive money from others on the platform and have allowed individuals or businesses to pool funding from a variety of sources all in the same place.
Instead of having to go to a traditional bank for a loan, it is now possible to go straight to investors for support of a project or company. And while their applications range from family and friends funding to fan and patron funding, the number of crowdfunding platforms have multiplied over the years.
