The Changing Face of Transaction— How Digital Technology is Making an Impact on Transaction?
Transaction, is an action that people perform to exchange needed items. It is a result of the development and evolution of the times, from ancient bartering as the starting point of trading to the invention and use of money as a token in trading to carry out fair transactions. In the early era of economic development, people would use uncoined metal or shells as a medium of exchange. However, in the era of the rapid development of the Internet, the form of money has changed dramatically. Although physical currency is still in circulation and used, digital money has become an essential part of people’s daily lives.
The use of functions such as WeChat Pay and AliPay has brought Chinese consumers into contact with QR code payments at an early stage. And the market for QR code transactions in China and the Far East is much larger than in other parts of the world. Not only that, point-of-sale in China found that the use of digital wallets gradually increased from 2017 onwards and took up half of the market share from 2020 onwards. Additionally, more than 6,000 Chinese respondents over the age of 16 surveyed in 2022 said they would use electronic payments rather than cash. Electronic payments have become a gift of technology for our times.
As an increasingly prevalent technology, convenience stands as the most conspicuous benefit of electronic payments. In contrast to the inconveniences associated with carrying physical currency and searching through a significant amount of change, the sole requirement is to carry a mobile phone while travelling. Electronic payment guarantees timely transactions and prevents time wastage, whether one is embarking on a shopping excursion or commuting via the bus. Not only that, but supermarket checkouts are becoming ever more electronic. By allowing more customers to utilize self-checkout and achieve the purpose of diverting customers, checkout efficiency is significantly enhanced.
A further benefit of electronic payments is that they prevent the spread of germs. Money is one of the most frequently exchanged items on a global scale. Some unhygienic practices and improper preservation during the circulation of banknotes may expose currency to the risk of bacterial contamination, including that caused by microorganisms in the respiratory and gastrointestinal tracts. By decreasing the circulation of banknotes, the risk of illness for certain individuals who touch money, such as bank employees responsible for money counting, can be mitigated. It is crucial to minimise the likelihood of contracting an illness, particularly after the special period of the COVID-19 outbreak.
However, in addition to the various benefits of electronic technology for payments, there are also some information security issues associated with them. Security issues related to electronic payment transactions, such as the risk of e-fraud due to leakage of communication privacy and identity theft due to leakage of information privacy, can undermine consumers’ trust in digital payment systems. In addition to consumers being affected, merchants may also suffer financial and reputational losses. As a result, biometric authentication techniques have been applied to e-payment technologies, such as fingerprinting and facial recognition, which improve the security of e-payment transactions by providing an additional layer of authentication.
Since some time ago, some countries such as China and the United States have been trying to further optimize the e-payment experience, from scanning QR codes and face recognition payments to using the palm of your hand. This seems to be a much fresher experience, where payments can be made by simply placing the palm of your hand on the scanning machine. Is it enough to take yourself with you when you go out in the future? In fact, palm payment is a method update using biometrics such as palm prints to become more user-friendly as well as allowing users to experience a more secure payment mechanism. Such contactless technology reduces the risk of transmitting bacteria or viruses and reduces potential electronic fraud by preventing direct access to bank accounts through the integration of e-wallets.
However, is it acceptable to use electronic devices solely for routine transactions and payments? No. This can potentially result in the elderly being left behind by the times. According to the policies of the Chinese government, Chinese merchants are not allowed to refuse paper currency. However, since the majority of the time consumers place their order by scanning a code, using paper currency could potentially lead to the dilemma of being unable to give change. The elderly in China over the age of 60 carry an average of 557 yuan in cash per day as of 2017, which is roughly three times more than post-1990s youth. The inability to operate a mobile phone and proficiency with only banknotes have significantly disrupted the daily lives of the elderly. The widespread adoption of palm payments may significantly improve the societal environment for the elderly.
Nevertheless, this novel technology is not without its constraints, and the present state of technology does not adequately prepare for the widespread implementation of palm payments. Due to the fact that accurate recognition of the user’s palm through this technology is contingent on its proper positioning, compromised skin may impede the machine’s recognition capabilities. Furthermore, the rapid adoption of palm swipe payment by small and medium-sized merchants is challenging due to the substantial expense associated with the necessary equipment. However, in spite of these constraints, palm payment remains a promising initial step towards enhancing users’ convenience.
In addition to making life easier for consumers, electronic payments highlight the potential of data analytics in e-payment systems. The vast amount of data generated by consumers can be a powerful competitive advantage for organizations by gaining insights into consumer spending patterns and their perception of a product or service, enabling businesses to be more transparent with information and to effectively tailor their products or enhance their services.
The advent of digital technology has significantly revolutionized individual transactions. There is no strict requirement to exclusively use one payment method over another. However, employing multiple payment methods simultaneously in society can promote greater harmony by ensuring the needs of all individuals. The unstoppable trajectory of utilizing digital technology to enhance human lives is a future trend. All we can do is try to keep everyone up to date with society.
