In 1994, Silicon Valley’s Stanford Federal Credit Union was the first known financial institution to offer online banking. Four years later (and just down the street from several SFCU branches), PayPal launched its digital payment service. These pillar enterprises pioneered payments gone digital – an economic movement that has overflowed from desktop computers and onto mobile devices.

Today, digital payments unlock new economies, accelerate critical transactions, and maintain industries while buyers remain quarantined in their homes. Digital payments are the reason that consumer spending has shifted rather than slowed to a halt in the face of pandemic lockdowns.

Payments are going digital, and this reality existed long before the spread of COVID-19. Ongoing environmental and geopolitical concerns have merely accelerated what is now a well-established disruption to the global economy.

What are Digital Payments?

Digital payments, or electronic payments, refer to any transaction that occurs digitally. Both the buyer and seller (or sender and receiver) complete the exchange using digital platforms.

Popular digital payment platforms include PayPal and cryptocurrency exchanges. Lesser-known versions of digital payments include digital loyalty cards, proprietary apps with refillable accounts, and other P2P platforms like Cash and Venmo.

Smartphone domination among consumers empowers payments going digital. Today, wireless providers are partnering with digitally advanced products and services to deliver seamless payments and complementary productservice bundles.

Both commercial excellence and building a pandemic-proof enterprise requires vendors to take digital payments seriously. It is both the present and future of modern transactions worldwide.

Elena Volkovskaya
Chief Strategic Marketing Officer

Foundational Technology for Payments Going Digital

Digital payments are relevant due to the popularity of mobile devices, more specifically smartphones. The discussion revolving around payments moving steadily to more digital environments is a conversation about smartphone use.

Remarkably, experts forecasting consumer spending and GDP among developing nations will increasingly look not for the availability of banks and exchanges, but for smartphone use amidst the greater population.


5G LTE speeds in North America, Europe, and Asia open new opportunities for smartphone users and fintech providers. “By 2025, 72% of all internet users will solely use smartphones to access the web.” – Bank My Cell, 2020

Download speeds for smartphone users doubles under the most conservative numbers, and in many cases globally, 5G speeds exceed 4G LTE by as much as 1800% (Verizon in the United States, see chart below). With reliable and fast Internet connectivity available on smartphones in every first world country (and many second world countries), online rendering for device enablement platforms (DEPs) can complete transactions in a timely manner.

Contactless Payments (NFC)

While 5G LTE connects devices and servers on opposite sides of the world, near field communication, or NFC, allows smartphones to interact with devices nearby. NFC technology is similar to bluetooth, in that it is wireless and intuitive.

NFC makes contactless payments possible, a growing trend in light of COVID-19 safety concerns. Aside from the convenience of waving one’s smartphone across a device to complete an in-person transaction, the absence of physical cash exchanges help slow the spread of a pandemic.

Contactless payments are now available in shopping malls and vending machines around the world. Smartphone users can also wave their phones near each other and automatically send money from bank accounts and credit cards.

Security and Authentication

Initially, concerns over digital payments pertained to security. However, authentication technology has demonstrated that digital payments by and large enjoy far more security than traditional cash and card payments.

Stolen phones do not allow fraudulent transactions in the same way that lost or stolen cards do. Blockchain technology and biometric identification platforms are proving more reliable than anyone imagined.

Mobile Wallet

The mobile wallet is digital payments’ crowning achievement. 5G connectivity, NFC, and modern mobile authentication platforms solidify the future of digital payments.

Mobile wallet technology is groundbreaking, insomuch that it opens the door for new currencies, including loyalty programs that increase their value. Powered by smartphones, mobile wallets allow for rigorous productservice batching, as illustrated by the latest developments in mobility-as-a-service (MaaS).

The Future of Digital Payments

Digital payments unlock unimaginable convenience for buyers and vendors. This convenience extends beyond the point of sale and into vast marketplaces where complementary brands work together to provide a more enriching customer experience.

Consumers can use mobile wallets to plan their evening with a single swipe, from transportation to dinner reservations and theater tickets. Mobile applications can personalize product-service bundles to include premium discounts, limited-time offers, loyalty points (with individual vendors), and how to take the least congested routes to each event.

These digital payment capabilities are already underway as entire communities invest in digital transformation initiatives. Mobile wallet technology denies brand proprietary domination (a privilege that Apple currently enjoys) that seriously limits consumer options. At the same time, the future of digital payments allows ample opportunity for brand promotion and customer loyalty within the greater digital marketplace.

Digital payments will continue to push advances among IoT (Internet of Things) markets. Industry lines will blur in favor of a consumer quality of life based on location, demographics, income, health status, and more. 

Blockchain technology is also key to maintaining both consumer privacy and security so that users may enjoy as little or as much personalization without the threat of identity theft or spam. 

Most importantly, digital payments allow unbanked economies to engage banked economies. New consumers and value-creators can engage the global marketplace and make the world an infinitely smaller place. 

In Conclusion

Perhaps the greatest challenge when discussing the future of commerce and fintech is that the future is already present, even if only in a less-developed state. Nearly every trend and technology mentioned above is underway in at least one part of the world.

Digital payments can make large corporations streamlined while empowering small businesses to operate alongside these larger corporations as industry peers. Consumers enjoy greater flexibility, and the data available through mobile wallets allows providers to take personalization to a new level. And finally, blockchain and biometric technology offer unprecedented user security and anonymity in the marketplace.