• Chahat Jain

Smoothening of the Payment Processing System


The legacy system followed by the traditional banks and financial institutions consists of certain problems faced by consumers. FinTech companies come into existence to try and overcome these consumer problems. One of the major issues faced by consumers is while processing payments using the traditional payment gateway systems that connect the consumers to a single bank. This limits their performance and control over the payment experience. If the bank’s payment service goes down, users fail to make payments. Consumers also have to go through a lot of hassle if they wish to change their acquiring bank.squareup.com/us/en/hardware/reader


FinTech companies and major startups like Square have already made powerful waves in the world of payment processing and trying to solve such consumer problems. Square is a user-friendly platform that provides payment solutions at any scale, end-to-end encryption, and minimum payment risks. This platform is extremely versatile since it turns the consumers’ device into portable point-of-sales (POS) terminals. As a result, Square’s core product is its in-person POS system. It allows sellers to collect payments from consumers by reading credit cards using a smart device or by manually entering in credit card information (in-person or over the phone). This makes the whole payment process smooth for the consumers as well as the sellers.


Such modernistic payment service providers present multi-bank connectivity, offer independence, and avoids lock-in to acquiring banks. This autonomy gives consumers back the control of their payment strategy, allowing them to access a wider range of benefits and giving them the flexibility they deserve.


Although there have been tremendous improvements in the payment processing sector, this industry can go much further than allowing smartphones to read credit cards. A significant number of the impending advancements in payment processing will zero in on regarding payments as a digital experience factor. Brands that treat payment processing as a resource instead of an expense make the way for new systems to communicate with their clients and cater to their needs more efficiently. For example, payments are already relocating from banking institutions to native apps and Point of Sale (POS) solutions. A proliferation of payment and banking application program interface (API) solutions will need to rise up to the challenge of ensuring business agility in a more complex financial ecosystem.


 

References:


Square. “Free Mobile Credit Card Reader: Square Reader.” Square, squareup.com/us/en/hardware/reader.


Nick@silamoney.com. “6 Problems TOMORROW'S FinTech Apps Will Solve.” Sila, Sila Inc., 10 Sept. 2020, silamoney.com/blockchain/6-problems-tomorrows-fintech-apps-will-solve/.


“5 Critical Limitations of Traditional Payment Gateway Services.” IPSI.com.au |, 6 June 2019, ipsi.com.au/5-critical-limitations-traditional-payment-gateway-services/.


“Stripe vs Square: Which Payment Gateway Should You Use in 2021?” Kinsta, 1 Apr. 2021, kinsta.com/blog/stripe-vs-square/.

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