As technology advances, so does the global economy. It means the world of finance is constantly changing.
To stay ahead of the curve, it’s essential to be aware of the latest trends and developments. Consumers—no matter their age or experience level—have to keep up with the changing financial landscape to make educated, informed decisions about their assets.
In this article, we’ll look at some changes that have taken place in recent years and discuss how they may impact your financial planning.
Traditional Cash Transactions
Cash transactions are declining as more people use other payment methods, including online purchases made with credit cards or debit cards. This shift to electronic payments makes it easier than ever to use a wide range of financial products and services.
However, even though there is a significant drought in the use of cash, it’s still here to stay. That’s why consumers should continue to save money in cash accounts, even if they use other forms of payments.
Credit and Debit Cards
Credit cards are more widely available now than ever before, and consumers have a more significant number of choices when it comes to choosing which card is right for them.
Debit cards are also accessible to most, if not all, consumers with bank accounts. You can use them at ATMs or any retail store that accepts debit card transactions. On the other hand, credit cards have perks like cash-back incentives and rewards points redeemed for merchandise.
Many people prefer cards in their transactions because they are convenient, give accurate records of all transactions made, and often have protection policies if the account is compromised.
How do you feel about virtual currency? It’s certainly not a new idea, but it has come into its own in recent years. Virtual currency—a concept that goes back centuries to the days of salt and shells used as trade coins—is increasingly popular on the Internet today.
With online retailers accepting these forms of payment from consumers, virtual currency has become a growing part of the financial landscape.
Virtual currency is gaining the appeal to execute financial transactions quickly and securely over the Internet. Even though it’s not issued or backed by a central bank, some see it as an emerging trend that could significantly impact the future of global financial transactions.
That’s why CBDC programs are launching their virtual currency, and some financial institutions are starting to look at how they can profit from it.
The latest financial trend is the growth of mobile payment apps. These programs use smartphones and tablets to transfer funds and execute cashless transactions.
Mobile payment technology could even replace credit cards, debit cards, money transfers, checkbooks, cash transactions at point-of-sale locations, etc.
In essence, many people—and not just early adopters—are intrigued by the idea of no longer having to carry cash and cards. Instead, they would rely on their smartphone or tablet for all financial transactions. You could get rid of your wallet and the associated clutter.
As more consumers switch to virtual wallets, financial institutions may have to explore new ways of incentivizing their customers to use credit cards and debit cards that offer rewards and other perks.
Prepaid cards are not new. However, they are becoming increasingly popular as consumers seek out alternative methods of financing—especially millennials who are known for their attraction to better technology and security.
The cards eliminate the possibility of over-spending and late payment fees by giving you more control over how much money is available for transactions. Prepaid cards are also handy tools to set aside funds for savings goals like vacations or emergencies that can be tapped when needed.
However, with prepaid cards comes a responsibility for consumers to understand how they work. If you don’t, this could be an expensive mistake that leads to many fees, charges, and interest rates.
Biometric payment is a form of electronic payment that allows the consumer to make payments using their biological attributes such as fingerprints and face.
Using biometric features to make a financial transaction allows consumers to avoid PIN codes or passwords that are often forgotten or easily compromised. In the future, there’s a possibility that people will not just use biometrics to identify a person’s identity but also for security purposes.
For example, people would not have to worry about forgetting a password or losing their credit card because they would use biometrics to make a payment. While this technology is still in its infancy, there is significant growth potential.
So, what’s the bottom line? Many changes are happening in the financial landscape today, and it can be unclear to keep up with them all. However, if you understand the basics, you’ll be in a better position to make sound financial decisions.