Adelia Castelino, Co-founder & Managing Director, In-Solutions Global
Real-time payments, APIs, automation, blockchain and central bank digital currencies can transform the future of payment gateways by providing improved security, efficiency, and user experience. In an exclusive interaction with Deccan Herald, Adelia Castelino, Co-Founder & Managing Director of In-Solutions Global (a JP-Morgan backed venture) said that one of the most crucial factors for the success of online businesses is their ability to convert visitors into paying customers in today’s rapidly evolving digital landscape. Read the full interview here -
What emerging technologies do you see shaping the future of payment gateways?
The latest trends around real-time payments, APIs, automation, blockchain and central bank digital currencies can transform the future of payment gateways by providing improved security, efficiency, and user experience. Blockchain technology has the potential to revolutionise payment gateways by enabling secure, transparent, and decentralised transactions. It can also facilitate faster cross-border payments, reduce transaction costs, and enhance security by eliminating the need for intermediaries.
On the other hand, artificial intelligence and machine learning algorithms can help in enhancing fraudulent detection capabilities, personalising user experiences, and analysing vast amounts of data in real-time to make data-driven decisions for improved efficiency and security. Payment gateways can leverage biometric authentication to strengthen identity verification processes and reduce the risk of unauthorised access or fraudulent.
The proliferation of real time payments in India and IoT-enabled devices presents new opportunities for payment gateways to enable seamless and secure transactions in connected environments. Smart appliances, wearables, and vehicles can facilitate frictionless payments by integrating payment functionality directly into the user experience. Further, tokenization can also be leveraged to enhance security and protect sensitive information during transactions, reducing the risk of data breaches and fraudulent.
By embracing innovation and adopting these technologies, ecosystem players can stay ahead of the curve and respond to the evolving needs of consumers and businesses.
How do you think payment gateways will adapt to changing consumer behaviours and preferences?
By remaining agile, adaptable and responsive to changing trends, payment gateways can effectively meet the demands of an increasingly digital and interconnected world. As consumer preferences continue to evolve, payment gateways will broaden their support for a wide array of payment methods beyond traditional credit and debit cards. This could mean incorporating digital wallets, mobile payment applications, buy now, pay later (BNPL) services, and cryptocurrencies to cater to diverse payment preferences.
Secondly, payment gateways will concentrate on delivering seamless and user-friendly payment experiences across different devices and platforms. This entails optimising checkout processes and minimising the number of screen changes and steps for customers to complete the payments. Besides, the priority will be security and privacy measures to safeguard sensitive financial information and establish trust with consumers. This involves implementing strong encryption, authentication, and fraudulent detection systems to protect against cyber threats and data breaches.
Going forward, using transaction data and demographic information, payment gateways can customise their offerings and marketing strategies to align with consumer preferences. For this, utilising data analytics and consumer insights will help them gain a better understanding and predict shifts in consumer behaviours.
What challenges do you anticipate for payment gateways in the future, and how would you address them?
Protecting consumers from advanced cyber threats, navigating regulatory compliances and keeping up with rapid technological changes are some of the key challenges that payment gateways may encounter in the future. It is also crucial to offer a seamless and user-friendly payment experience across various devices and platforms. This is essential for retaining customers and promoting adoption.
To overcome these obstacles, payment gateways should invest in robust cybersecurity measures, such as encryption protocols, multi-factor authentication, and real-time fraudulent detection systems, to protect against cyber threats. It will be crucial for payment gateways to stay updated on regulatory developments and proactively adjust compliance processes to ensure adherence to relevant laws and regulations. Additionally, embracing emerging technologies will strengthen transaction security.
How will advancements in data analytics and machine learning affect the functionality and security of payment gateways?
Advancements in data analytics and machine learning will have a significant impact on both the functionality and security of payment gateways. The following are the benefits:
Enhanced fraudulent detection: As transaction volumes increase, the amount of data to monitor also rises. Utilising machine learning algorithms to detect payment fraudulent empowers financial institutions to tackle fraudulent activities without compromising processing speed. With the aid of these algorithms, payment gateways can swiftly analyze vast amounts of transaction data in real-time. This enables them to spot patterns and anomalies effectively, facilitating the prompt identification and prevention of fraudulent transactions.
Personalised user experiences: Data analytics empowers payment gateways to gain valuable insights into user behaviour and preferences. Armed with this information, they can offer personalised recommendations, promotions, and loyalty programs to users. This personalised approach not only enhances the overall user experience but also fosters customer loyalty.
Predictive analytics: Leveraging historical transaction data and predictive modeling techniques, payment gateways can anticipate future trends and customer behaviour. This allows them to optimise pricing strategies, accurately forecast demand, and proactively address potential issues.
Risk management: Payment gateways utilise data analytics and machine learning to effectively manage and minimise various risks, such as credit risk, operational risk, and compliance risk.
Ultimately, these advantages will drive greater value for users and businesses alike.
In what ways do you foresee payment gateways evolving to support the increasing demand for cross-border transactions?
The evolution of payment gateways to support cross-border transactions will involve a combination of technological innovation, global regulatory compliance, and strategic partnerships to meet the increasing demands of global commerce.
In order to meet the growing demands of global commerce and increasing need for international transactions, payment gateways will offer a wider range of currencies and payment methods to cater to diverse global markets. They will focus on simplifying and optimising cross-border payment procedures. This includes reducing transaction and settlement time and minimising potential complications that may arise during the process.
Payment gateways will continue to stay committed to improving their ability to detect and prevent fraudulent by focusing on advanced algorithms and security measures. They will invest in robust compliance frameworks to navigate the complex regulatory landscape governing cross-border transactions. This involves ensuring adherence to international regulations such as anti-money laundering (AML) and know your customer (KYC) requirements, as well as complying with regional data protection laws.
With the growing concern for data privacy, how should payment gateways balance security measures with user privacy requirements in the future?
Balancing security measures with user privacy requirements in the future will be crucial for payment gateways to maintain trust and compliance with evolving data privacy regulations.
Payment gateways should employ encryption techniques to safeguard sensitive payment data when it is transmitted and stored. Additionally, they can anonymize data whenever possible to minimise the risk of personally identifiable information being compromised.
Payment gateways should be transparent about their practices for collecting and using data, including how user data is stored, accessed, and shared. Moreover, to ensure the security of data, they need to prioritise it by implementing strong authentication, access control, and monitoring mechanisms. This is important to prevent unauthorised access or misuse of sensitive information.