The ‘Internet of Accounts’ and the future of payment methods [Coluna]

by Kelvin
The 'Internet of Accounts' and the future of payment methods [Coluna]

Subways, trains and buses in São Paulo (SP) have recently started to receive payment via NFC — an electronic transaction method by approximation — and, with this, we are beginning to see, in fact, the impacts of the evolution of this type of payment method on the day to day people.

Contactless, dynamic or static QR Code, movement of traditional banks and brands to adapt to world trends: all this shows how digital transformation has arrived to democratize access to the financial system in Brazil.

In addition, the Central Bank has adopted several measures to bring instant payment (PIX) into everyday life, including standardizing the use of QR Codes. It is a natural process that comes with the advancement of technology. After all, if everything around us is already digital, why shouldn’t the way to carry out daily transactions be?

  

Banks, Fintechs and Card Banners

This movement reinforces the global trend of digital portfolios and is generating major changes in the way banks, fintechs and card brands deal with their products, democratizing financial services and allowing new players to enter the market.

Fintechs, for example, will benefit from the interoperability that will exist in this new payment network, the PIX. Thus, they will be able to achieve more scale, compete head-to-head with current incumbents, and have greater chances of growth. And, by expanding the range of services offered, they exclude some payment intermediaries, which allows for a more convenient, agile and cheaper option.

For banks (which offer traditional services such as TED, DOC and bank slips), card brands and their acquirers, instant payment will generate greater discomfort, as the use of some of their most profitable offers may drop drastically due to benefits, convenience and speed of the new system. Looking at this, we realize that the loss of important revenue will force traditional players, who currently dominate the market, to adapt and seek solutions as innovative as the PIX to remain relevant in this new world.

PIX and digital wallets are creating the ‘Internet of Accounts’, a future for dealing with money that will be increasingly comfortable in the digital environment

We are living in times when people are increasingly looking for low-cost products and services, without giving up quality and convenience. With the news announced by the Central Bank of Brazil, we have everything to make this happen with the means of payment as of this year.

Today, almost the entire population has a smartphone and is able to use the QR Code through the screen/camera. In addition, the new players feature payment options via NFC, facial recognition, fingerprint, etc. — what is not lacking is space for innovation.

Just as the Internet of Things ecosystem was created by countless initiatives to connect everyday devices to the web, PIX and digital wallets are creating the “Internet of Accounts”, a future for dealing with money and what will be every more comfortable in the digital environment.

Merchants, retailers, entrepreneurs and consumers will be included in a single system, regardless of size, social class or relationship with traditional financial institutions. We will, therefore, have a fairer and more efficient system, in which there will be many more opportunities to access and use financial services on a daily basis.

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This article is by Alexandre Pinto, guest columnist by TecMundo. He is Matera’s Director of Innovation and New Business and an Open Innovation specialist. With the company since 2001, he was responsible for creating the R&D area and its partner ecosystem.