How is Technology Reshaping Financial Transactions?

It’s hard to pinpoint the first financial transactions between humans; it probably happened thousands of years ago, and it might have been a simple exchange of goods such as wheat or foods for wool and weapons. These simple exchanges paved the way for what we have now, a global market connected with millions of little dots, allowing us to buy a watch from Japan while staying in New York. All this is the legacy of mercantile capitalism and the expansion of the market to the whole Earth, rather than local or regional. Of course, with new technology on the rise, one cannot but wonder what these financial transactions will look like soon. In the text below, we’ll see how the current tech we have is already reshaping these transactions and what it means for the future. Read on! 

Digital Banking

The first credit card transaction presumably happened in the 1950s, as that’s around the time Frank McNamara and Ralph Schneider invented it after McNamara forgot his wallet at a local dinner and couldn’t pay for his dinner. The idea came to him like thunder and he thought of how convenient it would be if cash was out of the picture and everyone could simply carry a slim card in their pocket and pay for everything.

The idea revolutionized the way we do business and financial transactions and of course, the banks jumped on it immediately, each having their own Visa or MasterCard. Now, this is not the only time banks have taken advantage of new technology and grabbed the opportunity immediately. In recent years, all of them have their own digital platforms, allowing you to do business without having to leave your home.

Online banking offers a wide variety of products, from cashback reward cards and low-interest credit cards to business credit cards, as well as services such as fund transfers, bill payments, loan applications, and investment management, all accessible through user-friendly interfaces. The time when you had to wait in line for hours to submit for a simple loan is long gone; nowadays, everything is just a few clicks away.

Cryptocurrencies

The cryptocurrency frenzy is still going strong, and people are at it with everything they have. Cryptocurrencies completely changed what we believed would never be possible. They cut the middleman and allow transactions to be made without the need for any provisions from banks or third-party authorities. Crypto also opened new possibilities on the stock market, with dozens investing in new “coins” with the hopes of making a fast profit with little effort. The predictions vary depending on the current market situation and the coin’s value. Anyway, unlike traditional currencies, cryptocurrencies operate on decentralized networks using blockchain technology. This type of decentralization allowed for complete transparency and the ability to make transactions without leaving a trace of the participation and of course, it lowers costs as, unlike banks, there are now provisions taken when transactions are made with crypto. 

Mobile Payments

Now, everyone is carrying their mobile phone everywhere and it’s almost impossible to imagine someone nowadays without their phone with them at any given moment of the day. This, of course, made businesses think about the way their customers and clients can pay for their products and services. And, as you imagine, mobile payments have now become a thing. Apple Pay, Google Wallet, PayPal, and similar platforms enable you as a user to pay for whatever without having to even bring your credit card. It’s interesting to think of how adaptable we humans are and how easily we make simple tasks more convenient depending on our needs. First, it was credit cards to replace carrying cash, now it’s phones to replace the cards. Of course, if you happen to be a business owner, you can imagine how the integration of certain software is a must to stay ahead of all the changes and stay relevant. Take, for example, Prime Software services or similar websites offering you to upgrade your current payment methods and you’ll delve into a sea of endless possibilities and the chance to integrate new services previously unheard of. This way, your business will reach out to a wider audience and you’ll have the possibility to make transactions and facilitate payments without having to worry about the safety of the data. 

Blockchain Tech

We’ve mentioned crypto and the widespread use of these currencies for making transactions without having to go through a third party. It’s a decentralized system, making it possible to pay for goods and services while avoiding provisions the banks would usually take. Well, you’re probably wondering how it is even possible to keep track of the transactions and what kind of proof you have that the payment ever happened. Blockchain technology is the backbone of cryptocurrencies, and its decentralized and immutable ledger system enhances the security and transparency of transactions. Nowadays, the tech is still new and all the options are yet to be utilized. We’re thinking more in the direction of cross-border payments, trade finance, and smart contracts. Now the possibilities are endless and yet to be fully explored but it’s on its way and it’s a steady path. 

Artificial Intelligence

You’re probably asking, what does AI have to do with anything? Well, its application has already become widespread and the many areas it covers are useful for humans. The next step is to include AI tech in financial transactions, as it proved to be quite convenient for e-commerce platforms, as ChatBots, for example, are taking off a lot of load from workers in customer support. Its application in financial transactions goes more in the direction of making sure any fraudulent activities are not being made, it’s a security and preventive measure and the way it’s reshaping financial transactions is more in the form of a service to humans and their safety rather than being directly involved in the transactions happening.

It seems new technology is being of service to us rather than the other way around, and thankfully that’s the case, as many worry we might be overdoing it. However, we believe that the integration of tech into more and more aspects of day-to-day activities is a good cause and can help many.