Apr 24, 2022
 in 
Banking

Different Types of Payment Modes Evolved with the Course of Time

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arious different types of smart payment modes evolved with time; some of the modes are: the tap and go, debit and credit cards, online smart cards, mobile payments (mobile phones), internet-enabled cards, and magnetic stripe reader. But the latest payment modes that took birth due to the all-digital and contactless era are QR codes, NFC, RFID, and payment through face recognition. All the modes have different features, which are depending on the way you will use the payment mode.

Here, we are going to talk about each of the types of the latest payment modes and tell you how they operate:

QR Codes

QR codes have been used for effective promotion and data sharing, but now it's also an extremely popular method for individuals to create mobile payments using QR codes, especially because the new Covid-19 pandemic started. QR codes can store a huge amount of data per unit area, much like a bar code but with a different layout. It works similar to a regular bar code except that it has a unique pattern of black boxes that are arranged in a black square grid with a white backdrop. Mobile payments using QR codes are highly efficient and accepted all over the world.

Any business can use a unique or code payment system. Whether it's a restaurant, shop, bar, or business, it can be integrated into their daily transactions. Business owners no longer have to worry about remembering codes or writing them out on paper when customers aren't in line. Instead, they can tap on a QR code, share them, swipe their ID, and pay with their smartphone by scanning across the code. No matter what sort of organization you own, your payments can be made securely and conveniently using a QR code.

RFID (Radio Frequency Identification)

If you remain concerned about security, then you might want to consider payments with RFID. RFID technology can be used for the purpose of secure, convenient, and fast cash transactions. Imagine a universe where you do not get to go through security checks, neither do you get to carry large sums of money with you to make the payment. RFID credit card payments are also easy for companies to track. The technology allows for the storing and tracking of secure data.

In addition, payments with RFID are convenient. Once a service or item has been purchased using a credit card, the customer can wave the card at the payment terminal and have funds instantly deposited into his account. This process is convenient, secure, and instant, allowing customers to make payments with RFID in any situation where a credit card is needed. Instead of waiting for days to receive a check, customers can now receive payment immediately.

NFC (Near Field Communication)

In recent years, and with the evolution of mobile technology, Near Field Communication or NFC is the technology to go with. What is meant by this is the transfer of information using the transference of electromagnetic radiation from the two wireless devices in contact - the device to be paid and the device holding the payment information. This technology can be used for many things such as point of sale systems, electronic coupons, and even as a wallet replacement, where the mobile device containing the payment information is placed in a particular slot, and the user punches in a security code that authenticates the payment.

The most popular application is in the form of a credit card, where a mobile device containing a payment device is placed in a wallet, and the owner makes a payment by punching in a security code. However, most commonly, these are used for point of service systems where the customer receives payment for something that he has ordered from the retailer but did not bring his credit card along. Also, in this case, the NFC is the technology that enables near field communication between the retailer's device and the customer's device.

Visual/Facial Recognition

"Face Detection in Payments" is a rather new term that refers to the use of facial recognition software to detect fraudulent transactions in online shopping. This type of software is usually used by third-party payment processors who want to prevent fraud and other abuses of their systems. This system can be made more robust and aware of malicious attacks so that the user is able to protect themselves. Face Detection in Payments is best suited for all types of e-commerce that involve accepting credit cards or electronic payments.

The new face of this security technology has been welcomed by the financial industry as a way of stopping fraudulent transactions from damaging the financial stability of many companies. Different companies use the same system differently. Some ask users to upload their live pictures, while some ask them to upload their pictures in their cloud database, which remains saved. And, whenever the same user comes to make the payment, they need to activate the face-payment function, and it gets done in no time. Also, to make this procedure more validated, even after detecting face, one has to put digits or pin code received as a passcode to their authenticated device.

The Final Say

It is necessary for the users to upgrade themselves over the course of time. Technologies are constantly evolving, and so are fraudulent activities. Thus it is necessary to adapt to what’s coming in order to secure your transactions and upgrade your payment methods in the best possible manner.

Written by : Hrayr Bobyan,

Customer Engagement Manager