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Four Transformations in Consumer Payments

Updated: Nov 9, 2021


FinTech or financial technology has transformed the way we pay for goods and services. Traditional payment methods had evolved from cash and cheques to credit cards over a century. In the past few years, the payment sector witnessed multiple new and innovative products. The pace of change continues to increase with payments witnessing product launches, every few months.

Fin Techs have come to the forefront and have revolutionized this once slowly changing sector and brought it to the center of innovation. Emerging technologies have found rapid adoption in payments and a number of new digital offerings including e-wallets, real time low-value payments, request to pay (RTP), mobile credit and buy now pay later (BNPL), have taken center stage. These payment innovations have revamped the experience for today’s consumers.

Payments is one of the first sectors to be revolutionized in the current FinTech transformation that is sweeping the world. Its potential to add value to consumers and brands, by reducing friction in transactions, will be felt for a long time.


Here are some ways in which Payments have changed over the last few years :

1. e-wallets

The massive shift towards digital payments has enabled rapid growth of e-wallets allowing fast, cashless and contactless transactions, while also providing security through biometrics based authentication. Mobile phones have played a massive role in this journey and Covid has further made people wary of mobile payments, seeing it as essential.

e-wallets allow customers to make purchases by scanning QR codes, using mobile numbers, email ids, or other identifiers, which are easy to remember. The transfer of funds takes place in real time and directly into the wallet or bank account of the merchant within a matter of seconds. The payment system evolution has in some cases reached a state where we are witnessing zero merchant discount rate (MDR), which will create value for the ecosystem.

2. Buy Now, Pay Later Applications

Creating an easy checkout process was taken one step further, with the ability to let users shop now while paying for it in the future. The Buy Now Pay Later product originally popularized by Klarna, has now reached across the globe. The rise in e-commerce during the pandemic, accelerated the focus on BNPL, especially among Gen Z and Millennials. Once onboard, BNPL products allow users to shop online with their merchant partners or make in-store purchases by taking over the payment obligation. It allows clearing of these bills in the future within a certain period, also providing you the option to settle in installments. Not all BNPL systems are the same and offer different repayment terms.

Studies also suggest that 55% of the consumers tend to spend more while using buy now, pay later applications, than while using other payment methods.


3. Peer–to–Peer Payment

Peer to Peer payment services lets you transfer funds from the sender’s bank account to the receiver’s bank using just your phone, email id, identifier, or bank account number. Peer to Peer payment systems also known as P2P payments are encrypted and have two factor authentication (2FA). Venmo, Zelle, Paypal, Google Pay are some of the players that provide P2P payments and ensure faster and safer transactions within minutes. Payments can be settled 24/7 in real time with no business hour restrictions, allowing liquidity in cash management.

4. Vertical Specific Solutions

As digitalization keeps evolving the way we make financial transactions, fintech helps boost these payment methods by enhancing user experience along with fast paced responses. These transactions also help collect data whilst maintaining user privacy by using powerful tools to grow and scale with the changing world.

To learn more about how to Drona Pay can help your wallet, BNPL or FinTech App, secure transactions using Machine Learning, visit us at

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