Fintech has brought about efficiency in e-commerce. Indeed, eMarketer predicts that online retail sales will hit $4 trillion by 2020. The speed and efficiency of fintech remittance and payments continue to revolutionize e-commerce in great new ways. The emergence of international e-commerce platforms like Magento and Shopify and payment platforms like Stripe and BlueSnap has improved efficiency and speed in e-commerce. E-commerce is currently more efficient than before, thanks to new payment methods based on financial technology which include:
- peer-to-peer payments
- in-app purchasing
Without financial technology, some aspects of e-commerce such as online sale and purchase of goods and services would be virtually impossible. However, with fintech, you can order goods online and pay for them immediately or as agreed with the seller, where both the seller and the purchaser have the security of getting what they have contracted for. The seller is not worried that the purchaser will fail to pay for goods upon delivery and the purchaser is not worried of non-delivery upon payment. This is because fintech has made it possible to pay a deposit as soon as the contract is concluded or even pay the entire amount which can be held on an independent platform to be released to the seller once the goods have been delivered. ( eg: escrow.com)
Financial technology accommodates all consumers, both the banked and the unbanked by providing a variety of ways to pay for goods or services purchased online. For instance, online retailers allow purchasers to pay through a variety of ways including credit card and mobile money transfer-especially where the purchaser is located within the same country as the online seller. The ability to accept payment by mobile money transfer ensures even those who have never held a bank account can purchase goods at their comfort with the effect of improving sales for businesses.
Financial technology has extinguished the barriers that have previously hindered international e-commerce. This has had the effect of opening up new revenue avenues for existing businesses as well as the establishment of new businesses.
It is expected that e-commerce will continue to grow as internet and smartphone penetration continues to increase. The available methods of payments are also going to increase, some even more efficient and effective than has been witnessed before. The entry of global tech giants Google, Facebook and Apple into the fintech sector is very significant and is expected to improve e-commerce further.
Blockchain technology provides the most secure method of tracking payments. While this technology has not been fully embraced by the majority of businesses, it may in the near future prove very instrumental in e-commerce. Currently, several financial and technology giants such as IBM, Linux Foundation, JP Morgan Chase Bank and Wells Fargo are exploring ways of incorporating the technology into their operations.