Payment systems are now the most reliable way to transact for businesses. With global reach, a payment system allows businesses to operate beyond borders without the limitations of cash. We now have digital wallets, contactless cards, and other forms of mobile payments. However, even with their success, there are several challenges.

Going Beyond Cash

Cash became a common way to buy goods and services due to the scarcity of other materials. However, the world is quickly changing its tune. Inflation and the need for faster transactions over long distances meant that there needs to be other solutions.

Payment systems were a way to help people transact without the need to hold cash. It allowed businesses and consumers to interact independently from other institutions. A digital account or a card could represent the money in one’s account. It would record any transactions thanks to technology.

Over time, this technology became available worldwide. Today, payment systems have become a necessity. The growth of these systems is due to several factors, including:

  • Real-time payments
  • Globalisation
  • New technology (smartphones, social media, etc.)
  • Different banking expectations
  • Newer competitive businesses
  • Digital currencies

The Limitations of Today’s Payments Systems

Out of hundreds of systems that emerged from the 1990s to the 2000s, a few became successful. Even then, integrating an existing system into a business comes with challenges. There are limits to what a business can do and the two parties may not agree to a price. It is a service that operates by itself and the business will have to adjust to it.

In contrast, imagine a system constructed with the business in mind. It can work transactions and enforce regulations through an operator. It can connect to POS systems and stay compatible with various other payment systems. It can verify transactions and work directly with financial institutions. End-to-end in-house development is a solution that can work for every business, and companies like Payconiq are offering it to businesses in Europe.

A New Payment System Matters

Trends around the world show that there is a need for more reliable payment systems. Companies are beginning to create independent connections to banks and services. Governments are also becoming more open to the idea of international transactions. Here are some other trends that have come about:

  • The increase of digital spending quantities around the world that no longer need physical devices.
  • Partnerships with banks allow for seamless transactions.
  • Today’s consumers are gathering in various online marketplaces in different parts of the world. Some examples include Alibaba, Uber, and Amazon.
  • Newer technology allows for high-speed development.

Existing payment systems today have high fees, and companies don’t have as much freedom to operate them as they please. There are also challenges with integration and interoperability. The payment system a business acquires may not be compatible with the bank they are using or the eCommerce platform they have.

It makes sense to create a payment system that not only works for an in-house system but also allows it to thrive. A custom-made system that integrates everything a business needs. It doesn’t rely on far way servers or regulations that another company imposes. It can happen when a company decides to invest in end-to-end in-house development.

Starting a Payment System

In the past, banks were necessary to create a way for businesses to transact digitally. It is no longer true in modern times. With an established customer base, a company can create a payment system that circumvents most fees. To create one, the following factors are necessary:

  1. A way to store customer information and a channel for payments to travel through different systems. For example, Amazon collects bank account information so it can clear transactions faster. It can even do so globally.
  2. The system must operate to standards to which everyone in the network should adhere. For example, will data be available to third parties? Are there any other fees involved? Is there a recourse when fraud occurs? Etc.
  3. The final part of the system is expansion. To access the majority of the intended audience, a business needs to create as many channels as possible. It requires a collaborative effort and getting into business with third-party channels. For example, PayPal has acceptance from e-commerce sites because of its continued partnerships.

How Can End-to-End Development Help My Business?

By creating a payment system that fits well, companies can circumvent the limits that others have. Here are some of the benefits that come with end-to-end development.

  • A faster and flexible system: Businesses can clear payments faster, and it will cost less to maintain the system.
  • Less risk to outside threats: Popular payment systems have many attackers and security issues. An accountable payment system will be easier to manage.
  • Open doors: Business can now become available to the international crowd. It allows them to expand their horizons on a global scale.
  • More business opportunities: A payment system allows two businesses to operate without interference. It can mean faster settlements, better credit lines, and expedited payments.

The Opportunity Is Here

Implementing end-to-end in-house development allows a business to develop a payment system the way they want. They can integrate every feature needed. It is a tailor-made solution that operates by company rules, prices, and partnerships.

By doing this, we can get the best of both worlds. The infrastructure will have features that all have a purpose. It saves money in operation while also providing value with its broader reach. With this form of development, businesses will be able to reduce risk and cultivate growth.

 

Sources:

https://www.mckinsey.com/industries/financial-services/our-insights/banking-matters/building-a-successful-payments-system

 

https://www2.deloitte.com/content/dam/Deloitte/us/Documents/strategy/us-cons-real-time-payments.pdf