A study on retail payment systems

Abstract

Retail payment systems have come a long way from the simple barter system of exchanging goods/services for an agreed upon value between two entities; to the sophisticated contactless payment systems today. The journey so far has seen the introduction of several retail payment systems, each with its unique benefits and challenges; and each has been received with mixed success. The off-take of different payment systems varies across different geographies of the globe. Many factors are responsible for these differences like the state of development of the economy, the stability of the banking system, the history and culture of a country, the current payment trends, the present payment landscape, existing payment infrastructure and initiatives from the market participants. While this understanding presents a view of the supply side of retail payment systems; the demand side needs to be understood. From the customer perspective; Security, Speed and Convenience of retail payments is of utmost importance. Of course, the ability to use the same payment device at all locations (real and virtual like the internet) to pay for purchases of all denominations is also important. In addition, the influence of specific regional factors on consumer preferences cannot be overlooked. The road ahead in Retail Payments Systems is going to be driven by innovations. This innovation climate is breezed by the changing customer preferences, technology and collaboration among market participants. From its humble beginnings as an enabler of retail payments, technology today is a key driver in the world of retail payments. In short, the retail payments world is going to be a dynamic buoyant space in the years to come.