Through the constant creation and implementation of new technologies and solutions in the payment and banking sectors, we are able to rethink the traditional relationship between businesses and customers. Digital transformation enables faster, more secure, and seamless payments, making services, subscriptions, and e-commerce more convenient for both customers and providers.
Today, the demand for fintech software developers is high due to the emergence of new trends and requests. Due to their relevance and prospects, virtual cards, cryptocurrencies, “buy now, pay later,” and tribe-based banking — all these things are increasingly being discussed in the fintech and crypto space.
Let’s take a look at some of the major trends in payments and banking software development to watch out for in 2023.
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Cryptocurrency Payments
Cryptocurrency is perhaps one of the most promising areas in the finance industry. Blockchain technology, decentralized applications, and enhanced security are among the top advantages of crypto assets. Due to this, interest in this industry and the development of new solutions, as well as the number of cryptocurrency custody providers has been steadily growing in recent years.
At the same time, cryptocurrency is often the subject of speculation due to trading and market volatility. However, if we consider cryptocurrencies in terms of their value and functionality as a means of payment and not as assets and investments, then the implementation of cryptocurrency-based solutions in payment systems is one of the most innovative areas in finance and online banking.
In 2023, the cryptocurrency market is in a growth phase, attracting new investors and financial institutions, which are increasingly considering the possibility of accepting payments in cryptocurrency. And these are not only startups but also such world-famous giants as Mastercard, PayPal, Google, etc.
Mastercard has partnered with Paxos and is also considering using cryptocurrencies as an “everyday payment method”, while Google has cooperated with Coinbase to add the feature to pay for some cloud services with cryptocurrencies. And the list of new well-known names in the crypto payments industry is constantly updated with new companies. As such, more banks and financial providers are expected to join the cryptocurrency payment space in 2023.
Digital Tribes
Another trend in banking software development is digital tribes. Through the implementation of these solutions, banks and financial institutions can improve communication and interaction with and between customers.
Digital tribes are essentially online communities that share common interests and connect with each other through social media. For example, like a sports club, TV show, series, hobby, etc.
The main features of the interaction of participants within the tribe include:
- Co-operation
- Communication
- Cognition
With the enhanced interoperability provided by digital Tribes solutions, businesses can launch their own financial services targeted at their core audience, thereby becoming more open and connected to their community.
Among the main advantages of digital tribes are:
- Tribes are self-sustaining
- Tribes are more decentralized and don’t need leadership or hierarchy
- Tribes are long-lasting and loyal
Virtual Cards
One of the main trends in the financial sector in recent years is online banking. Digital banks are gaining more and more attention, especially among young people, due to the convenience and accessibility of the financial services they provide. The growth in demand for e-commerce and tracking finances in applications naturally leads to an increase in the number of banks and businesses that are integrating digital cards into their systems. Thus, virtual cards can be considered the future of financial spending, so this is a trend that should definitely be taken into account in 2023.
The main advantages of online cards include access to a wider range of financial services and a higher level of security, which significantly reduces the risk of unauthorized access to user funds, card fraud, hacker attacks, etc.
In addition to the benefits for the customer, virtual cards also help companies manage costs effectively, so this trend will only intensify in 2023.
Contactless Wearables
Alongside virtual cards, contactless payments using wearable devices such as smart watches, bracelets, rings, etc., have become increasingly widespread in recent years. And this trend will continue to gain momentum and develop over the next few years.
With the advent of the Internet of Things, contactless payments are becoming a fast and efficient alternative to traditional bank cards and cash.
Moreover, the functionality of wearable devices allows for the creation of more personalized products and services to provide customers with an enhanced experience. By developing software to collect and analyze data such as user habits, lifestyles, and interests, businesses can make more informed decisions and provide customers with the financial services and products that suit them best.
So, the combination of convenience, innovation, and the ability to analyze user behavior patterns in order to provide them with more personalized products make contactless wearable devices one of the main trends of the coming years.
Buy Now Pay Later
Another interesting trend of our time, especially among Millennials and Generation Z, is “Buy Now, Pay Later” products and services. By its concept, BNPL is a short-term, interest-free loan where you borrow money to buy something, but pay it back later without paying fees or interest.
However, BNPL is a fairly new financial product, so its impact on consumers, businesses, and people’s habits is still a matter of debate as the concept may encourage reckless payments.
In addition, BNPL regulation is still in its infancy, so during 2023 and the next few years, the concept of “Buy Now, Pay Later” may change slightly to comply with the rules and standards of the financial industry.
Even though BNPL is an interest-free loan, late repayments can result in interest rates as high as 36% and can result in a $7 or $8 fine, according to the Consumer Financial Protection Bureau (CFPB).
The BNPL payment concept provides easier access to financial products and services and allows consumers to go beyond their budget without the added cost of interest and fees, which is why “Buy Now, Pay Later” is becoming increasingly popular among young people.
