Metaverse is defined as spatial computing in which individuals can seamlessly work, socialize, and play in a virtually interconnected universe.

Using complex technologies like augmented and virtual reality, the Metaverse can generate digital replicas or digital twins that can be used in simulations before they are actually implemented in the real world.

It has the potential to redefine how businesses operate today. For example, businesses can try digital twins and deploy avatars before actually starting operations in a new domain or country.

Similarly, Metaverse can be integrated into the digital payment system. For example, you can buy real estate, purchase digital goods, or access available services in the Metaverse. As there is a steady shift towards cryptocurrencies, efficient eWallet systems need to be designed for the Metaverse.

In this article, we'll explore the future of digital payments in Metaverse and how you can integrate them into your business.

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The growth of Metaverse

Experts say that Metaverse has a bright future. In fact, the UAE Metaverse market is projected to grow at a CAGR of 28% between 2023 and 2028.

The Bank for International Settlements (BIS) has also acknowledged that Metaverse has a strong potential in cross-border and domestic services like e-commerce and payments.

 The penetration of Metaverse in digital payments looks promising, with the largest gains expected from gaming and e-commerce, USD 200 billion and USD 150 billion, respectively.

Here are some key areas to watch out for:

The surge in e-commerce transactions 

As e-commerce popularity grows, customers are increasingly demanding multiple payment methods. Digital payments help streamline the purchasing process, allowing customers a positive shopping experience and encouraging them to buy more.

Technology's constant innovation accelerates this shift and changes consumer preference for digital payment solutions.

Mobile payment adoption

In 2023, 10.07 million people in the UAE had internet connectivity, while 9.69 million people had mobile phones out of a population of 10.17 million. This rise in smartphone adoption is making mobile payment a popular payment solution.

Technologies like Apple Pay, Google Wallet, and other such apps leverage near-field communication and QR codes to facilitate faster payments.

For example, by partnering with Payby, any merchant can offer mobile payment options.

Integration to payment gateways

Businesses must integrate with a robust payment gateway to offer a streamlined digital transaction experience. With a robust payment gateway, consumers can pay through various payment options, such as digital wallets, bank transfers, credit/debit cards, etc.

By partnering with PayBy, merchants can easily integrate with a robust payment gateway and offer a smooth transaction experience.

Security and fraud prevention

Advanced security features like encryption, tokenization, and biometric authentication are paramount in adding a layer of security to any digital payment.

Payment providers and platforms like PayBy are continuously investing in different security measures to build consumer trust and minimize the risk of theft.

Popularity of cryptocurrency payments

Although cryptocurrencies like Bitcoin and Ethereum are still in their early stages, their popularity is growing, signifying a shift towards a decentralized payment system.

Globalization of payment systems

Digital commerce needs a payment system that can support cross-border transactions. Thus, payment platforms that can handle multiple currencies and smooth cross-border transactions are gaining importance to both merchants and consumers.

Clearly, a lot of innovation is happening and will happen in the future to streamline it.

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Payment and Metaverse: The benefits 

Payments in Metaverse currently occur both through centralized and decentralized ways. However, a recent survey by PayPal reveals that users prefer multiple payment methods. In fact, the survey revealed that 80% of the respondents purchase Metaverse tokens using their PayPal account. Debit cards follow next.

The study also confirms that there's a strong connection between the adoption of Metaverse and decentralized finance (DeFi) users. For example, 80% of the Metaverse users are already using cryptocurrency.

Benefits of payments in Metaverse

• Since there are no geographical boundaries, cross-border payments become easy.
• It opens up the scope for innovations where service providers and creators can develop new experience-based products.
• Since Metaverse allows users to make payments in a virtual environment, customers can purchase virtually any virtual goods, services, and experiences, giving users a convenient service experience.
• It opens up the scope for financial inclusion, including the underserved and unbanked.
• Metaverse offers a fluid user experience where users can purchase goods and real estate, attend virtual events, and much more. Metaverse ensures an engaging user experience. 
• Businesses that operate within the Metaverse system have other revenue streams opened up. For example, they can generate revenue from services, virtual products, experiences, virtual storefronts, premium content offerings, and other innovative revenue opportunities. 
• Since Metaverse often uses digital tokens and cryptocurrencies, it lowers transaction fees, making the entire payment processing time faster and with better security. Further, tokenization can enable the creation of unique digital assets like NFTs, making the transaction more secure and valuable. 
• Metaverse allows microtransactions, a common feature that allows making small and frequent purchases of virtual items. This feature is useful for businesses as it allows them to constantly engage with their users and keep the revenue stream flowing. 
• The blockchain technology that powers the payment in Metaverse provides better security and transparency, thus preventing fraud. Furthermore, the decentralized nature of blockchain reduces the risk of unauthorized transactions, which ensures that every transaction is secured and verified. 
• With Metaverse, you can develop customizable payment solutions that meet the unique needs of the virtual environment. For example, it allows you to include features like programmable transactions, automated payments for virtual subscriptions, virtual wallet integrations, etc.

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Challenges of payments in Metaverse

While digital payments and Metaverse offer many benefits, they also have some challenges. Let's look at some of these.

Security and fraud prevention

Due to payments' digital nature, ensuring the security of every transaction within the Metaverse is challenging. Digital payments can expose the user to threats and cyberattacks. Thus, offering user protection is essential for maintaining trust and security.

Regulation and compliance 

Metaverse is a complex system that operates within a stringent regulatory landscape. Each jurisdiction has its regulatory guidelines for data protection, digital currencies, and online transactions, so you must ensure that all these compliance guidelines are followed during a cross-border transaction.

Integrating with the existing financial system

Since Metaverse payment systems work on different principles, it's challenging to integrate with the existing payment system.

Financial institutions must develop complex processes to close the gap between virtual and real-world currencies, ensure that currency conversions meet compliance, and interoperate with existing payment infrastructure.

Volatility of cryptocurrencies

Cryptocurrencies are known for their price volatility. However, most transactions in Metaverse occur through cryptocurrencies. Price fluctuations in cryptocurrency can affect the stability of transactions, which can impact digital currency transactions.

Digital divide and accessibility

The Metaverse is not equally accessible and creates a digital divide among users. Issues such as internet accessibility, technology literacy, and device compatibility create this digital divide, which restricts equal participation in virtual payments.

Legal and tax implications

The legal and tax implications of digital payment in Metaverse can be complex. Merchants and consumers must navigate these regulations to stay compliant with the tax laws and legal requirements related to the income generated in Metaverse.

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Digital payments and Metaverse: What does the future look like?

Digital payments in Metaverse have immense potential to transform the payment industry.

However, a lot of work must be done before the world embraces it. Innovation needs to happen to secure theft and cyberattacks, while financial institutions need to educate and spread awareness among users and businesses for better adoption.

Governments and regulatory bodies across geographies must come together to streamline the regulatory guidelines and make it easy for everyone to adopt digital payments in the Metaverse.

When all of these factors are considered, the digital payments system in the Metaverse is poised for a revolution.

Want to stay ahead of the curve in digital payments and the impact of metaverse?

‍Get started with PayBy today.

Lately, we have noticed a trend in the payment industry, especially in the post-COVID period: the steady and fast growth of digital payment systems worldwide. Businesses across industries are embracing this new way of payment as customer demand grows.

However, with the fast adoption of digital payments, data breaches and theft are becoming prime concerns. In a survey, 4 in 10 UAE customers reported experiencing fraud attempts, and this trend continues. Identity theft is another area of concern.

Does this mean customers and businesses should avoid digital payments? Or is there any other way out?

The good news is that today, we have strong security measures, such as tokenization, in place that make digital payments secure.

In this article, we’ll explore the role of tokenization in securing digital payments and how businesses can use it in their payment systems.

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What is tokenization in payments?

Payment tokenization is a security measure that replaces sensitive transaction information with a unique random set of characters known as a ‘token.’

A token is a unique combination of a card, token requestor, and device. For example, sensitive payment information like credit card numbers is replaced with a random digital identifier or token number.

Tokens work in any form of online transaction, such as website payment, QR codes, in-app payment, point-of-sale transaction, etc., and ensure the data is kept safe during any online transaction. Thus, the token keeps the actual card number safe and ensures it cannot be accessed, used, or stored.

Unlike data encryption, which can be reversed, tokenization is irreversible and cannot be decrypted.

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Types of tokens in digital payments

Tokens are of two types - single-use tokens and multi-use tokens. 

Single-use tokens

As the name suggests, a single-use token is used only once. Once used, tokens become redundant. Thus, once the payment is over, they are of no use. So, even if hackers access it, they can’t cause any harm.

Multi-use tokens

Multi-use tokens are useful in recurring transactions. They have multi-use validity, so every time a transaction needs to happen, the token can be retrieved, and the payment can be processed without revealing sensitive information. For example, subscription-based businesses use multi-use tokens.

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Benefits of tokenization

Tokenization has many benefits. Some of these include:

Payment safety

Tokenization helps protect sensitive transaction information, thus preventing data breaches. Because it doesn't involve mathematical operations, tokenization requires fewer resources than data encryption. Third-party service providers like PayBy can easily perform tokenization.

Payment convenience

Tokenization securely stores your credit/debit card information on websites, mobile wallets, or e-commerce apps. This makes your payment experience convenient without worrying about payment security.

Innovation of new solution

Tokenization facilitates the innovation of new payment solutions, such as mobile wallets, cryptocurrencies, and one-wallet payments, thus improving consumer convenience and payment safety.

Reducing the risk of breach

Tokenization has significantly reduced data breaches because tokens are random numbers that cannot be used to retrieve the original credit card number without the key.

Staying compliant

Tokenization helps merchants stay PCI DSS compliant. With tokens, they don't need to store or process sensitive card details; they only need to secure the token and the key. This, in turn, helps save costs in compliance audits.

Scalability and flexibility

Since the tokenization platform can be adapted to any online payment method, it can help you scale up your journey.

Improves brand reputation

By leveraging tokenization in your payment system, you demonstrate your concern about data theft and security, which improves your brand reputation.

Build customer trust

One of the greatest fears of online consumers is data theft. You can earn their trust by offering secure payment options that can build trust and improve sales. Tokenization can help you achieve that goal.

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How payment tokenization works

The core principle of tokenization is changing sensitive payment information to a non-sensitive equivalent that can be stored and transmitted safely without exposing the actual data. Here’s how payment tokenization works.

Data collection

In this first step, data collection happens when a consumer enters their payment information to make a transaction.

Tokenization request

If the business’s payment system uses a third-party tokenization vendor, it will send the sensitive data to the secure tokenization service. However, tokenization happens automatically if the business uses a tokenization-enabled solution like PayBy.

Token generation

The token generation happens in the next step, which combines encryption, algorithms, and secure storage. Together, they generate a unique token, which is a random string of characters and numbers that represent the original data without actually leaving it.

Token storage

The next step is token storage. Here, the merchant's payment system stores the token information while the sensitive card details are stored in a secure token vault designed to protect the data from unauthorized access.

Token usage

When a merchant needs to process a transaction, a token is sent to the payment processor or tokenization service. The token is then securely mapped back to the original data. Thus the transaction is completed without exposing sensitive data at any time.

Token reusability

Token reusability is a feature that enables stored token information to be used for recurring transactions. This is handy for paying subscriptions or repeated purchases on an e-commerce site. It eases the payment process, enhances the user experience, and keeps it secure throughout.

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Who can use tokenization?

Tokenization is useful for any business. For example, e-commerce merchants can facilitate safe transactions by securing customer information.

Tokenization is also useful in brick-and-mortar shops when using a point-of-sale system or mobile payment. In such transactions, tokenization offers an extra layer of protection to keep customer information safe.

Merchants with subscription-based business models can use tokenization to keep customer information safe by storing the token details and mapping them back every time a transaction needs to occur.

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How can I implement payment tokenization?

You can implement payment tokenization with PayBy. PayBy offers a robust fraud detection and prevention mechanism integrated into the payment gateway, like tokenization. It also offers AI-based fraud monitoring, 3D secure authentication, and transaction risk analysis to ensure all payment transactions are secured and no sensitive information is breached. 

PayBy is licensed by the Central Bank of the UAE and has received the highest financial service approvals to conduct Stored Value Facility (SVF) and Retail Payment Services (RPS) operations. It is also trusted by some of the UAE's leading brands. 

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We all are aware that the global temperature is rising. While the earth’s climate has been changing since it was formed, the current warming is happening at an accelerated rate that has never been seen in the past 10,000 years.

Hence, sustainability has become a critical focus for many as it can reduce the effects of climate change. So, every industry is now developing various ways to become sustainable, minimize carbon footprints, and conserve energy.

The payment industry is no different.

In fact, it’s one area where sustainability has made significant improvements in the last few years. As the traditional payment method impacts the environment, more and more businesses and consumers are opting for green payment solutions.

This article will explore how digital payment systems contribute to sustainability and how you can join this movement. But before that, let’s quickly understand how the traditional payment method impacts the environment.

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Impact of the traditional payment method on the environment

Traditional payment methods involve bills and coins, which involve physical bill production. This requires high energy consumption at data centers, chemical usage, and paper pulp production. Traditional payment methods also include various credit and debit cards, creating a lot of plastic waste.

• Extraction of resources like copper, nickel, zinc, etc, that are used in coin production
• Harvesting and cutting down of trees along with chemicals for bill production 
• All the currency production units have a heavy consumption of energy
• Traditional currencies use significant amounts of water for metal refining, printing, paper production, etc. 
• Heavy amounts of plastic and chemicals used for card production

Needless to say, traditional payment methods heavily impact the environment.

The solution?

Green payments.

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What are green payments?

Green payments are a sustainable and effective method to reduce carbon footprint. Over the years, some great eco-friendly innovations have been made that can significantly reduce environmental impact.

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Benefits of green payments

Green payments have many benefits that contribute positively to sustainability:

Environmental impact

Green payments significantly reduce carbon emissions and consume less energy and resources than traditional payment methods. Since notes, coins, and cards are not printed and transported, green payments are sustainable.

Cost savings

As you save energy and reduce waste, you also save costs in the long run. So, if you are still contemplating switching to green payments, this is your cue!

Compliance regulations

Global climate change is a serious concern, and many organizations, including various governments, are taking active measures to promote sustainability. For example, the UAE aims for net-zero emissions and sustainable practices.

It launched the UAE Energy Strategy 2050 to reduce emissions and contribute to renewable energy. As a part of this program, it also launched the UAE Green Agenda 2030 to transition to a green economy. Switching to green payments can help you adhere to compliance regulations and guidelines. 

Build a positive image

Finally, by building a culture of sustainability, brands can make a positive image for themselves and attract customers who care about the environment. 

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Key innovations for sustainability in payments

As sustainability is becoming a primary concern worldwide, we can experience various innovations that reduce wastage, promote energy conservation, and minimize carbon emissions.

The payment industry is not far behind, and we can witness some key innovations in this field. In fact, 49% of small and medium business owners in the UAE already offer green payment options as a growing customer demand. This will only see an uptick in the current months.  

Digital wallet and contactless payments

With digital wallets and contactless payments, we have significantly reduced the use of credit/debit cards, thus reducing plastic waste. This has also reduced the need for paper receipts while streamlining the entire payment cycle. 

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Mobile payments

Mobile payment is another key solution for sustainable payment that’s gaining popularity. As smartphone and internet usage is on the rise (In 2023, 10.07 million people in the UAE had internet connectivity while 9.69 million people had mobile phones out of a population of 10.17 million), mobile payments are becoming a common way of payment.

They significantly reduce carbon emissions, tree cuttings, and paper waste and decrease energy consumption. Mobile wallets like Apple Pay, Google Pay, and Samsung Pay are accelerating consumer adoption of sustainable payment methods.

Mobile payment is not limited to smartphones but can be integrated into various payment solutions, including the web, smartwatches, and wearables like fitness trackers and rings, offering consumers more choices to make payments sustainably. 

QR code payments

QR code-based payments are another green payment method that is gaining traction, particularly in Asia. Generating a QR code is easy with platforms like PayBy. All you need to do is create a merchant account, access the QR code generation feature, and you’re ready to accept payments from customers in a sustainable way!

Biometric authentication

Biometric authentication is a revolutionary green technology that promotes sustainability in the payment solution. With biometric authentication, you can significantly reduce the use of credit and debit cards, which in turn reduces plastic waste and the consumption of raw materials and energy needed for their manufacture. For example, by partnering with PayBy, you can easily enable customer biometric verification.

Blockchain and cryptocurrency

Blockchain is a decentralized and transparent payment technology that can process payment without any intermediaries' intervention. It's fast, efficient, and, above all, a sustainable digital solution. It reduces transaction costs and significantly reduces carbon footprints.

Cryptocurrencies are considered environmentally friendly because they don't need to be printed and can operate within renewable energy-backed networks.

Cloud-based payment system

Cloud-based systems are energy efficient compared to traditional data centers as they share computing resources. This enables efficient server capacity utilization, thus reducing energy consumption and carbon emissions. Additionally, they offer scalability and flexibility, which further encourage businesses to adopt cloud-based payment systems.

Green data center

Payment processing consumes substantial energy. So, companies are focusing on investing in renewable energy sources for their green data center. 

Eco-friendly payment cards

Many banks and financial institutions are now developing eco-friendly payment cards made from recycled materials and biodegradable plastics.

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Future of green payments

As new green technologies emerge and regulatory guidelines become stringent, businesses and consumers can expect to adopt green payments more widely.

For example, as the Internet of Things (IoT) advances, it will be crucial to enable more devices to interconnect for a smoother payment ecosystem, minimize carbon emissions, and reduce energy consumption.

International organizations like the World Bank and the United Nations have played key advisory roles and emphasized climate concerns. The annual sessions of the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change show that green payments are now a global agenda.

The government established the Network for Greening the Financial System (NGFS), a global association that promotes sustainable payment solutions.

As more customers adopt sustainable payments, more businesses will offer green payment solutions and vice versa. In the coming days, we can expect more sustainable payment usage in healthcare, education, government services, etc.

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Adopting sustainable payment solutions with PayBy

If you’re concerned about protecting the environment and want to adopt green payment solutions, partnering with PayBy can be a great idea.

With solutions like PayBy, you can integrate green payment methods with a virtual account and digital wallet or a payment gateway, direct pay, QR code payments, etc.

PayBy is licensed by the Central Bank of the UAE and has received the highest financial service approvals to conduct Stored Value Facility (SVF) and Retail Payment Services (RPS) operations. It is also trusted by some of the leading brands in the UAE. 

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The 'low touch' contactless payment mode surged during the pandemic. Since then, its growing popularity has increased worldwide, including in the UAE.

Statista mentions that the total transaction value in the digital payments market is projected to reach US$29.75bn in 2024 in the UAE. Seeing its growth, it can be said safely that contactless payments are here to stay and will rule the market in the coming years.

This article will show how contactless payments shape the retail industry.

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What are contactless payments

Contactless payment is a modern method in which customers don't need cash or a swipe card. Instead, they can tap or wave their card in front of an e-card reader or use a digital payment wallet on their smartphones to make a payment.

To make this innovative payment solution successful, complex technologies like Radio Frequency Identification (RFID) and near-field communication (NFC) exchange information between your card or phone app, bank account, and the merchant's reader.

As this data can only be exchanged within a range of around 4 cm, there is no scope for accidental reading by unauthorized nearby card readers.

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What are the benefits for consumers and retailers

Contactless payments are fast and reliable. This benefits both consumers and retailers in the following ways: 

Benefits of contactless payments for retailers

1. Better operational efficiency: The tap-to-pay feature is fast and efficient and doesn't require an additional workforce. It reduces the time the retailer would have spent counting cash or swiping the card in the machine.

2. Improved customer experience: With tap-to-pay, consumers no longer need to wait in long queues. They can simply tap and pay and complete a transaction. When retailers achieve such operational efficiencies, customers have a smoother shopping experience, improving overall customer satisfaction.

For example, by integrating PayBy into your payment solution, you can offer multiple contactless payment options like an online payment gateway, QR code payments, or a pay link that customers can access from their smartphones.

3. Increased sales: When you offer the convenience of contactless payment and a smooth shopping experience, customers are more likely to buy from you. This can improve overall sales.

4. No extra cost: Providing a contactless payment option doesn't require any extra processing charges. Additionally, it reduces operational costs, as you can reduce the risk and cost of an extra workforce for cash handling and processing.

5. Fraud protection: Contactless payments use complex technologies like encryption and tokenization to prevent hacking and fraud. A better security system ensures no fraud chargebacks, which are more common with magnetic swipe cards.

6. Improved efficiency: As contactless payment can streamline the entire payment process, your staff can focus on other tasks, thus improving overall operational efficiency.

7. Access to data: Contactless payment systems are often integrated with different digital payment platforms. This gives retailers easy access to customers' financial behavior and preferences, which can help them make data-driven business decisions.

8. Build customer loyalty: Tech-savvy customers always appreciate businesses that leverage technology and incorporate convenience into their operations. By implementing a contactless payment processing system, you can nurture the emotions of tech-savvy consumers, turning them into loyal customers. 

9. Future-ready: Digital and mobile payment systems are evolving rapidly. Retailers who have already embraced contactless payments are ahead of the curve ready to embrace the new era of digital payment.

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Benefits of contactless payments for consumers

1. It’s fast: Contactless payment is faster than traditional payment methods. Customers find it convenient and fast, especially for small everyday purchases.

2. Easy to use: With contactless payment, customers don't need to remember their PIN or sign a receipt. They just need to tap their card to make a payment. Quite easy, isn't it?

3. Better security: As mentioned, contactless payments use strong security technologies like encryption and tokenization, which reduce the risk of unauthorized access, fraud, and theft.

4. Flexibility of payment: Contactless payment ensures you don't need to carry bulky wallets loaded with cash and numerous cards for your errands. You’re sorted with your payment needs if you have an NFC-enabled smartphone.

5. No more ATM trips: As contactless payments are no cash, you need not make multiple ATM visits. This can subsequently eliminate the risk of loss or theft at ATMs.

6. Rewards and loyalty points: Many banks offer loyalty points, discounts, and cashback offers when you use contactless payments.

7. Better accessibility: Contactless payments are more accessible to consumers with disabilities. Since they require fewer physical interactions, they’re more accessible than traditional payment methods like counting notes or entering a PIN on a device.

8. Budget management: If your contactless payment system is integrated with a digital wallet, you can track all the transactions in real-time. This helps manage your budget and monitor your spending habits.

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Contactless payments - Trends and adoption

As mobile payments and various digital solutions influence customer behavior and payment patterns, the adoption rate for contactless payments is growing among retailers.

In UAE, 49% of small and medium business owners already offer contactless payment options as a growing customer demand. This will only see an uptick in the current months.

Let’s look at some of the recent adoption trends for contactless payment.

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1. Integration with mobile wallets

Mobile or digital wallets allow users to pay through their mobiles or the web. Mobile wallets like Apple Pay, Google Pay, and Samsung Pay have accelerated consumer adoption of contactless payment.

A survey shows that more than half of consumers are still using contactless payment even after the pandemic, indicating it is here to stay.

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2. Not just limited to cards

Contactless technology is not just limited to tap-to-pay. It has a broad scope of expansion beyond cards.

For example, it can be integrated into various payment solutions, including mobile, web, smartwatches, and wearables like fitness trackers and rings, offering more choices to consumers to make payments.

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3. QR code payments

QR code-based contactless payments are gaining traction, particularly in Asia, where NFC infrastructure is yet to be developed. Generating a QR code is easy with platforms like PayBy. All you need to do is create a merchant account, access the QR code generation feature, and you’re ready to accept payments from customers.

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4. Biometric authentication

While customers may have some initial inhibitions about the security aspect of contactless payment, enhanced security features like biometric authentication assure customers.

Customers can conveniently safeguard every transaction through fingerprint scanning, tokenization with biometrics, facial recognition, voice recognition, etc.

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5. Contactless ATMs

Banks are also driving contactless payments by deploying various contactless ATMs. Customers can withdraw cash using cell phones and contactless cards without touching the ATM.

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The future of contactless payments

As new technologies continue to emerge and new security measures come into effect, we can expect to see a greater adoption of contactless payments.

For example, with enhanced security features, future contactless payment systems will have more advanced security measures, and we can expect to see the use of blockchain technology and multi-factor authentication.

As the Internet of Things (IoT) advances, it will play a crucial role in enabling more devices to interconnect for a smoother payment ecosystem.

With the introduction of artificial intelligence and machine learning, we can expect to see more personalized payment experiences. The AI-driven insights will help payment solutions offer more customized products in the coming days.

As customers adopt contactless payments more, customer demand for smoother transactions will rise beyond retail. In the coming days, we can expect more contactless payment usage in healthcare, education, government services, etc.

In the future, contactless payments will see greater adoption as the world shifts towards more sustainable payment solutions that reduce environmental impact.

Contactless payments could also integrate with AR and VR technologies in the future, enabling new and immersive shopping experiences where payments are made seamlessly within virtual environments.

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Get started with contactless payments

No matter how good your products are, how you make shopping a convenient experience for your customers can differentiate you from your competitors.

With solutions like PayBy, you can integrate contactless payments with a virtual account and digital wallet, or a payment gateway, direct pay, QR code payments, etc., and stay on top of the current payment trends.

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From receiving personalized product recommendations to personalized email content and social media interaction, AI is changing customers' perspectives and how they interact with brands. The payment processing landscape is no different. A research survey found that more than half of UAE shoppers look for their favorite payment option during checkout.

In this article, we’ll look into how AI influences customers' payment experience and how you can adopt it for your business.

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Role of AI in Personalizing Payment Experience 

AI is significantly enhancing customers' payment experience. From personalized payment recommendations to early fraud detection, AI is transforming the way payments are made for both businesses and consumers. Here are some of the key impacts of AI in personalizing payment experiences: 

1. Enhanced Security and Fraud Detection

AI can learn a user’s spending behavior and detect any irregular financial transactions through constant account monitoring. It can detect anomalies and recommend preventive measures like temporarily blocking the card or verifying the transaction.

Some of the common AI mechanisms that help in fraud detection are:

• Self-learning
• Alerting and reporting
• Data collection
• Model training
• Feature engineering and detention

If you, too, want to offer your customers a frictionless and safe payment environment powered by AI, then PayBy can help. PayBy offers AI-based fraud monitoring, 3D secure authentication, and transaction risk analysis.

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2. Tailored Payment Solutions

AI can analyze past transaction details and user behavior and offer data-driven insights to businesses. Leveraging these data, businesses can offer customized payment plans and options to customers.

For example, if a user prefers a particular wallet option while checking out, AI can suggest the same wallet option for subsequent purchases. 

Using predictive analytics, AI can help users manage their finances better by sending personalized recommendations for credit limits, installment plans, and payment methods. 

For example, if a user has a recurring expense, AI can suggest which installment plan best suits the user’s cash flow pattern. 

With AI-powered personalizations, businesses can also send customized loyalty coupons and specific discount codes, thus enhancing customers' shopping experiences.

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3. Improved Customer Support

AI-powered chatbots can interpret human language and engage with customers in conversations. They can offer support 24 x 7 and respond to customer queries like inquiries about balance payments, transaction histories, and payment status. 

A virtual assistant can offer personalized support to customers, recommend suitable plans and payment methods, and provide helpful information, thus improving customer experience. It also helps you significantly cut costs by eliminating the need for human support.

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4. Optimized Payment Processes

AI can help streamline payment procedures by reducing processing times and errors. For example, showing the preferred payment option helps in faster decision-making. AI can also help analyze invoices and match them with corresponding payments, reducing errors. 

AI can be implemented to do repetitive tasks like data inputs, invoice processing, and reconciliation, which can significantly help you save operational costs. 

Coupled with predictive analytics, it can forecast and manage transaction volumes by analyzing historical data. 

For example, with PayBy’s digital receipts, you can streamline records of cashless transactions. It can understand consumer trends and cash flow, reduce fraudulent returns, and make bookkeeping efficient.

5. Data-Driven Insights

AI can analyze customer data to predict future payment behaviors and preferences. Based on the findings, various personalized financial recommendations can be made. 

For example, AI can analyze and identify the categories in which the customer is likely to spend more and offer personalized discounts in those selected categories. 

So, if a customer repeatedly browses the footwear category in an e-commerce platform, AI can predict that the customer will likely purchase some shoes and suggest a customized limited-time coupon code to encourage the customer to buy them.

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Challenges in using AI for personalizing payments

While AI is completely revolutionizing the payment experience, certain challenges are yet to be completely addressed. Some of them being: 

1. Privacy Concerns

Collecting and using user data raises privacy concerns. To mitigate the risk of a privacy breach, brands need to be more transparent about how they collect and use user data. 

More transparent communication and relying on customer feedback help build trust with customers and strike a balance between personalization and data collection.

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2. Implementation Costs

While AI can generate immense benefits, the initial investment is quite high for AI technologies and infrastructure.

For example, to run AI algorithms efficiently, you need to invest in more expensive hardware than standard computer hardware. A recent report mentions that Netflix’s recommendation engine costs close to $1 million annually, giving some idea of how much AI can cost.

Apart from the initial investment in software and hardware, there are also continuous maintenance costs and updates to keep AI systems effective.

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3. Customer Trust

Human connection and conversation are important in building trust between payment providers and customers. While AI can answer routine queries, only humans can empathize with customers, answer specific questions and concerns, and offer personalized support.

Plus, customers need to be clearly informed through transparent communication, and consent must be collected before user data is collected for AI usage.

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Are You Ready for AI-Powered Payment Experience?

With the growing customer demand for a superior customer experience and the adoption of technology, brands must keep up with the technology trend without draining their budgets.

This is where intuitive solutions like PayBy have you covered for enhancing user payment experience.

PayBy is a one-stop platform that offers your customers multiple payment options. Its innovative online and offline digital payment infrastructure allows it to meet consumers' preferred payment solutions, from online payment gateways to pay links to QR code payments.

PayBy is licensed by the Central Bank of the UAE and has received the highest financial service approvals to conduct Stored Value Facility (SVF) and Retail Payment Services (RPS) operations.

The platform is easy to use, integrates easily with existing systems, offers easy scalability and customization, and more.

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For many decades, working 9 to 5 was the general norm. However, in 2024, the scenario is not the same anymore. A new buzzword in the job market is the "gig economy."

The gig economy refers to the workforce of people who make a living through freelancing and side hustle work.

The gig economy culture is rising globally, and the scene is no different in the MENA region. According to an analysis by recruitment agency Outsized, the region is witnessing the fastest gig economy growth, with freelance registration jumping by 142% from 2022 to 2023.

While many factors influence this trend, payment gateways have a direct role in reshaping the gig economy.

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Role of Payment Gateways in the Gig Economy for Gig Workers

While in a traditional setup, an employee receives payment/salary once a month, the whole payment system for the gig economy works differently. Gig workers get paid every day/week/month depending upon the terms agreed with their respective clients.

Plus, gig workers can pick up work from any geography, which means different currencies are involved. Payment gateways make it convenient both for businesses and gig workers. Let's see how.

1. Facilitating Smooth and Timely Transactions

To build a sustainable freelance business, gig workers must have access to fast and reliable payment methods. Payment gateways just fit right because, with payment gateways, automated processes ensure faster transactions than manual processing.

Some popular payment gateways gig workers often use are PayPal, Stripe, Square, Wise, etc. Most of these payment gateways support multi-currency transactions, so freelancers working with international clients can get paid more efficiently.

Getting paid on time is crucial for every gig worker because it honors the commitment. This ensures that freelancers can rely on consistent income to support their livelihoods while building trust and credibility with their clients. Payment gateways just fulfill this requirement.

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2. Ensuring Secure Payments

With the rise of the gig economy, digital payments are accelerating. But at the same time, payment frauds are on the rise, too. A news report mentions that 54% of UAE customers have been fraud victims at least once. Data breaches and fraudulent transactions are leading to financial losses for gig workers.

So, what you can do?

Leveraging a payment gateway that has invested in a robust security system is a logical measure to safeguard gig workers. Payment gateways like PayBy offer end-to-end communication encryption using TLS and SSL Protocols, CFCA security password control solutions, AI-based fraud monitoring, and 3D secure authentication.

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3. Reducing Administrative Burdens

Apart from doing client work, gig workers also need to manage many administrative tasks, such as networking with prospective clients, managing invoices, tracking payments, and managing their taxes.

As gig workers expand their businesses, keeping track of multiple invoice statuses and following up on payments becomes difficult.

A payment gateway solution can help reduce their administrative burden by automating invoices and tracking payments. For example, PayBy offers automated payout solutions that streamline operations and records. So, gig workers can directly receive money in their bank accounts with no delay.

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4. Enhancing Financial Inclusion

Payment gateways enhance the financial inclusion of unbanked and underbanked gig workers who can still receive payments through these gateways.

This financial inclusion gives gig workers the freedom to choose their clients internationally and not just remain restricted to domestic clients. Alternative payment solutions like mobile payments and digital wallets give gig workers better accessibility, and their financial freedom is not just restricted to their local banks.

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5. Boosting Trust and Transparency

Payment gateways help build trust and transparency through secure payment processing. In addition to implementing a secure payment processing system, many payment gateways have implemented dispute resolution mechanisms for payment-related issues.

For example, when a payment gateway offers a detailed transaction record, it automatically enhances transparency and accountability, which fosters trust among gig workers.

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6. Innovative Features and Services

Gig workers always seek a good payment experience, which often translates to faster payments. Faster payments mean a sustainable source of income that can pay the bills and bring peace of mind to the gig worker.

Payment gateways have made instant payouts and on-demand payment options possible, which means gig workers can receive real-time funds often unsupported by many traditional banks.

Additionally, these payment gateways support multi-currency conversion, facilitating international transactions.

Many gig workers work on different freelance platforms and are paid through these platforms. Payment gateways can easily integrate with these gig platforms and marketplaces, making a seamless payment experience for all.

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7. Navigating Challenges

As gig workers work with multiple clients globally, tackling compliance issues becomes critical. 

Payment gateways like PayBy mitigate such challenges early on. For example, PayBy ensures compliance with industry standards while handling payment data.

In addition to navigating regulatory and compliance issues, payment gateways minimize transaction fees so that gig workers don't lose money with every transaction. 

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Role of Payment Gateways in the Gig Economy for Employers 

Employers who regularly work with gig workers can benefit from adopting payment gateways in multiple ways. Here's how. 

1. Streamlined Payment Processes

Employers who work with multiple gig workers can benefit from using payment gateways. For example, by partnering with PayBy, employers can simplify payroll management as it streamlines operations and records. You can directly transfer payments to their bank accounts or wallets, monitor the payout status, and process invoices in bulk.

The automation feature of payment gateways helps reduce time spent on manual processing and administrative workload. Since payments are automated, you can schedule them, ensuring workers are paid on time. This will help build trust and retain your gig workers.

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2. Improved Financial Management

One of the biggest benefits for employers using payment gateways is that they can easily integrate with their existing accounting and financial software, allowing them to track their finances.

For example, PayBy easily integrates with different apps, minimizing disruption to ongoing operations. It gives real-time access to all the transaction data and financial reports that ease budgeting and financial forecasting while maintaining all payment records accurately.

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3. Enhanced Security and Fraud Prevention

Payment gateways like PayBy make every transaction safe with enhanced security and fraud prevention features. For example, PayBy has invested in AI-based fraud monitoring, 3D secure authentication, transaction risk analysis, encryption, and tokenization to ensure safety.

While such preventive measures reduce the risk of payment fraud and financial loss, they also help build trust with workers through secure payment practices. These measures ensure the gig workers' hard-earned money is in safe hands, which helps build long-term relationships with the employer.

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4. Cost Efficiency

High transaction fees often concern employers and gig workers when working internationally. For example, a traditional bank in the UAE charges a 2.99% foreign transaction fee, whereas PayBy charges 2.5% for domestic transactions and 2.8% for international transactions.

Compared to traditional banks, payment gateways reduce the administrative costs associated with manual payment processing. Moreover, different payment gateways have different competitive pricing plans that help employers save money on each transaction.

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5. Flexibility and Scalability

Different gig workers have different payment requirements and preferred currencies in which they want to be paid. Working with a payment gateway solution makes managing these varying payment needs easy, especially when your business grows, and you start working with multiple gig workers.

With payment gateways, you can choose different payment methods, such as bank transfers, digital wallets, credit cards, QR code payments, etc., to accommodate the preferences of different gig workers.

Plus, it can easily integrate with your existing accounting software, so your finance team can monitor every transaction and maintain the books without hassle.

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6. Global Reach

One of the main reasons employers work with gig workers is their access to the global talent pool.

However, traditionally, paying international workers is not easy. You must approach the bank, follow the paperwork, check the conversion rate, and pay a huge transaction fee. Moreover, traditional bank transfers can take several days, delaying the payment cycle.

Payment gateways facilitate paying international workers easily. These platforms support multi-currency transactions with automatic currency conversion. The payments can happen in real time while staying compliant with the local regulations and payment standards in different countries.

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7. Enhanced Worker Satisfaction and Retention

Timely payment is of utmost importance for gig workers to build a sustainable business. Not paying gig workers on time can turn the relationship sour, forcing them to leave you and look for work elsewhere.

However, with a reliable payment gateway solution, you can ensure timely payments for your gig workers. A better payment experience would bring peace of mind and improve worker satisfaction and loyalty.

Additionally, every payment gateway offers a transparent transaction history that further helps to reduce disputes and build trust.

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8. Data Insights and Analytics

Apart from easy payment processing, payment gateways like PayBy give access to in-depth and real-time insights with data visualization to track transactions, payment trends, and workers' financial behavior.

You can optimize your payment process, improve your financial strategies, and make better business decisions using these analytics reports.

9. Compliance and Reporting

When you pay international gig workers, you must adhere to regulatory compliance and reporting requirements. Failing to do so can result in unwanted tax implications and penalties. This can lead to huge financial loss, especially if you're working with multiple international gig workers.

Payment gateway solutions can help simplify tax reporting and filing, ensure adherence to labor laws, and regulate payments so that your books remain error-free.

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Key Takeaway

The gig economy in the MENA region is growing at a rate of 3.2%, so it can be said safely that it is here to stay, at least for the next few years.

Adopting a payment gateway solution like PayBy for seamless international transactions is a win-win for employers and gig workers. While employers can save costs and conduct multi-currency transactions compliantly, gig workers can receive timely payment through a safe and secure platform.

Are you ready to experience it? Get started with PayBy today.

Smooth payment processing is the backbone of any online business. Whether you’re an e-commerce platform, subscription-based service, or donation platform, you must offer your customers a smooth payment transaction experience.

Smooth transaction processing creates a positive customer experience, while studies have shown that a negative payment experience can lead to cart abandonment, lost sales, and even a damaged brand reputation.

Although brands want to offer customers a smooth payment processing experience, things are not always in their control. For example, payment processing challenges and in this article we look into the most common ones.

Common Payment Processing Challenges

While different businesses may face different digital payment challenges, here are some common issues that businesses face:

1. Payment Gateway Integration Issues

A payment gateway is a tech platform that enables online businesses to accept, process, and manage various online payment modes, such as credit cards, debit cards, digital wallets, etc., in a secure environment. It is an intermediary between the customer, the business, and their respective financial institutions.

Businesses must integrate a payment gateway with their existing system to work through it. However, integration challenges may arise if you have a poor API, multiple payment providers, or a legacy infrastructure. Lack of seamless payment gateway integration can lead to slow transaction processing and a poor customer experience.

But you can fix this.

• Choose a reliable third-party platform that can handle end-to-end payments for multiple payment modes and offers easy integrations.
• Partner with a provider that has developer-friendly APIs. For example, with PayBy, you can easily integrate it with your website through APIs to enable cashless payments with multiple payment modes.
• Test and validate the integrations are working fine.
• Ensure the payment pages are mobile-optimized so customers can have a smooth transaction experience.

2. Security Concerns and Fraud Prevention

As digital payments accelerate worldwide, the UAE's scene is not so different. A report mentions that card payments in the UAE registered a growth of 14.6% in 2023 to reach AED451.4 billion ($123.0 billion).

At the same time, payment frauds are on the rise. A news report mentions that 54% of customers in the UAE have been a victim of fraud at least once. Customers and businesses are falling prey to fraudulent transactions. Data breaches and unauthorized access are leading to financial losses and reputation damage.

Building a robust security system can help you build trust. A survey report mentions that 47% of respondents are likely to return if they’re assured that payment security is correctly handled.

This is what you can do.

• Conduct regular security audits to ensure all security systems are in place.
• Invest in a robust payment security system.
• Consider using AI for fraud detection to identify abnormal user behavior while making payments.
• Investing in payment gateway security, payment tokenization, two-factor authentication, and a robust verification process can prevent fraudulent transactions.
• Choose a platform like PayBy to ensure all your transactions are safe. The platform offers end-to-end communication encryption using TLS and SSL Protocols, security password control solutions of CFCA, AI-based fraud monitoring, and 3D secure authentication.
• It has been given the highest levels of financial service approvals to conduct Stored Value Facility (SVF) and Retail Payment Services (RPS) operations.

3. Compliance with Payment Regulations

Maintaining compliance and payment regulations is crucial for businesses to avoid data breaches and keep customer information safe. Non-compliance can lead to hefty fines, penalties, and reputation damage for the business.

One important regulatory compliance that businesses must fulfill is the Payment Card Industry Data Security Standard (PCI DSS). The Payment Card Industry Security Standards Council governs this set of security standards, which aim to secure credit and debit card transactions against data theft and fraud.

Similarly, the General Data Protection Regulation (GDPR) is another set of compliance regulations an organization must meet when handling personal data. This regulation gives customers more control over how businesses collect and process their data.

Businesses worldwide must ensure that PCI DSS and GDPR compliance are always met to prevent data breaches and unauthorized access.

• To ensure you’re adhering to compliance guidelines, conduct regular audits.
• Partner with payment platforms like PayBy to ensure that your business always stays compliant.
• PayBy ensures you’re PCI DSS compliant, conducts regular third-party audits, and has a security team to monitor your data's safety.

4. High Transaction Fees

High transaction fees always impact revenue. So, for brands, it is important to create a revenue system with minimum overheads and additional costs. While some expenses are unavoidable, some fees can be minimized, for example, by carefully choosing the pricing models of payment providers.

Some PSPs charge monthly usage and termination fees. Additionally, processing credit cards can incur higher transaction fees depending on the volume of transactions processed.

However, brands can minimize transaction fees.

• Choose payment providers based on percentage-based and flat fees to help you save costs.
• You can also consider negotiating with payment processors and optimizing transaction volume to reduce costs further.
• Always stay up-to-date with financial and legal requirements to avoid any unnecessary costs from new regulations that you’re unaware of.

5. Payment Disputes and Chargebacks

Payment disputes and chargebacks are becoming increasingly common practice. Chargebacks happen when customers contact their credit card issuing bank to dispute a charge. Customer dissatisfaction and fraud claims are some of the most common causes of payment disputes. In a chargeback case, the customer claims they have not received the product or don't even remember making the payment. They then request a refund from their bank or credit card company.

Chargebacks are a costly affair for any company. It affects the company’s cash flow and increases the administrative overheads.

However, you can prevent disputes and manage chargebacks effectively.

• Have a clear communication strategy with your customers about your refund and dispute resolution policy.
• Maintain transaction records and supporting documents to defend against unjustified chargebacks.
• Partner with platforms like PayBy that offer chargeback management services and shield your business against chargebacks.

6. Cross-border Payment Complexities

One of the biggest benefits of online shopping is that customers can buy products from global brands. While digital transactions can easily navigate the different payment methods within one country, the process becomes complex in cross-border payments.

Challenges arise regarding multi-currency conversion, diverse payment methods, and international regulations. Moreover, exchange rates constantly fluctuate, and high foreign transaction fees can impact total revenue. The speed of processing cross-border payments also impacts the business.

But you can solve these challenges and offer a smoother cross-border transaction experience.

• Look for a payment processor that has experience with cross-border payments.
• Partner with a payment processor that offers multi-currency support and real-time currency conversions.
• Consider the local payment preferences and integrate them into your system for a better user experience.
• Familiarize yourself with different local regulations and compliance requirements.
• Educate international customers about the payment and delivery procedures to avoid complications later.

7. Customer Experience and Checkout Abandonment

Like it or not, a poorly designed payment processing system can frustrate your customers and negatively impact the user experience despite having good products/services. As data shows, 88% of online consumers are less likely to return to a site after a bad user experience.

As a survey suggests, 43% of customers in the UAE mentioned that an easy checkout experience is one of the reasons for online shopping. However, customers can abandon the cart if the checkout process is difficult.

Most customers abandon the cart during the checkout process if they don't see their preferred payment options, they’re unsure if the payment gateway is secured, if the payment page takes too long to load, if it is a non-responsive payment site, and if the payment site is not optimized for mobile users.

To reduce abandonment rates, focus on improving the checkout processes.

• Build a simplified checkout process where you can minimize the number of steps by offering a guest checkout.
• Offer one-click payments.
• Optimize the payment page for mobile users with a responsive design.
• Look for a payment gateway that offers multiple payment modes like QR code payment, mobile wallets, credit and debit cards, etc. Solutions like PayBy can enable cashless transactions and online payments via various international and domestic credit cards, debit cards, and over 1.5 billion wallets.
• Enhance payment security by staying compliant with the PCI DSS regulations.

Overcome Payment Processing Challenges

Payment processing challenges can impact your cash flow revenue, lead to lost sales, and damage your brand reputation. While managing all these payment processing challenges is important, it’s difficult to tackle them separately. Investing in a solution like PayBy can be a game-changer as it helps you to navigate all the payment processing challenges effectively from one single platform.

Its secure and omni-channel digital payment solutions can help increase your revenue. PayBy offers multiple payment modes across all touchpoints, improves customer transactional experience, reduces cart abandonment, and offers better payment control.

‍Get started with PayBy today.

Without inventory management, your supply chain will be all over the place. 

Inventory management is your guide to aligning your inventory from manufacturers to warehouses to customers. In short, it helps you strategically time demand with supply, i.e. have your product in the needed location at the right time.

Inventory discrepancies lead to either overstocking or understocking situations. Both have a direct impact on your business's revenue. 

When you are understocked, you lose sales, and when you are overstocked, you risk resources being obsolete and wasted. Besides money and time, you are also at risk of business failure. 

Low-profit margins coupled with increased overhead expenses ultimately lead to failure. How well you manage your inventory dictates your business’s success.

This is what inventory management is for. It helps a business find the right balance between demand and inventory. In fact, businesses have outdone their stock management with inventory management systems connected to sales. 

Inventory management systems are the tools for modern-day management that ease this process of ordering, storing, and using inventory. They work wonders, especially since they automate end-to-end production with sales intelligence. Businesses can reach full efficiency in operations with systems like a point-of-sale (POS) system.

This article is a walkthrough of inventory management with POS system, its significance, and how your business can make the best use of it.

Recap: What is a POS system? 

A POS system unlocks a new avenue for handling sales and inventory. How does sales tie-up with inventory help you ask? You need tools and inventory management solutions unique to your business and revenue. Feeding real-time sales data to inventory management can help you get there.

Gone are the days of manual labor or even separate software solutions for all functions. A POS system is one software solution for sales, payment processing, and inventory management altogether. This modern solution is designed to update inventory with real-time data. 

Every time a stock unit is sold, it updates the inventory level instantly. It also facilitates sales and processes payments on the same interface. 

Real-time insights on payments and inventory are the keys to optimal inventory management. Operations, sales forecasting, and decision-making are easy with access to accurate real-time data.

How does a POS system help with inventory management?

Maximize the usage of a POS system to avoid stockouts, overstocks, shrinkage, and waste. Here’s how using a POS system to manage inventory can help:

1. Real-time inventory tracking

The best part about a POS system is real-time inventory updates across all channels and devices. Instant updates help attain accuracy and visibility in stock levels. Real-time access to inventory helps with its management and sales. Sales reps get real-time access to stock levels, so they can better assist the customers. Plus, you will have complete inventory control. You’ll be able to prevent stockouts and restock on time. Instant updates on stock are the best way to meet demand levels without unnecessary storage and handling costs.

2. Automated reordering

POS system comes with automation capabilities. You can stay ahead in stock management by automating the process of reordering. You can set alerts and low-level triggers that prompt order placement. Any repetitive tasks and workflows can be automated with the POS system. Other functions that can be automated are price updates, shipment notifications, reorders, customer and supplier communications, analytics on stock performance, and more. You should look for a POS system that gives you the luxury of flexibility and means to automate what you find fit to automate, not what the software vendor dictates.

3. Minimizing stockouts and overstocking

Optimizing inventory is another powerful feature of a POS system. Using this feature you can run through your inventory data and find unique insights. Insights can help you understand market demand and how much stock you must hold to prevent both stockouts and overstocking situations. With access to metrics like inventory turnover, sell-through rate, stock cover, gross margin return on investment, and more, you can understand demand, your show-stopper products, and underperformers. These insights will help you optimize prices, promotions, and reorders. You’ll be able to expound on efficiency and strategy to maximize profitability.

4. Improved sales forecasting

With automation and insights, POS systems give you ample time and the right means to make impactful decisions. The POS system can produce reports on sales trends, inventory turnover, and customer preferences. You’ll have everything at your disposal to pick up trends, forecast sales, and time them with unique inventory and sales strategies. These data-driven insights and decisions give you enough room for product innovation and expansion as well. 

Recommended read: How does a POS help with cash management

5. Reduced manual work and errors

Manually tracking and maintaining inventory is time-consuming. Plus, there’s a high probability of errors. Even if you use spreadsheets to maintain inventory, you risk human errors borne out of manually feeding the data. The POS system is built to reduce manual work and errors. Its powerful features can not only simplify and automate multiple inventory management tasks, but they are also accurate.

How to find a POS system suitable for your business?

Multiple POS systems claim to do the job, but how do you pick the right one for your business? You need to take your time and find the right system so you can make the most of this seamless technology. Here are some factors that can help you make the right choice:

1. Integration capabilities

The first thing you must seek is whether the technology can integrate into your existing tech stack. This includes the commerce platforms, accounting software, and customer relationship management (CRM) tools you use. Without easy integration, your employees will have a hard time obtaining data efficiency in stock keeping. Integration errors lead to data blockages. So, you must ensure that you check the software’s API and integration support.

2. Room to scale

Choose a POS system that is not limited by scale. It should be able to support your business needs and aspirations when you are starting out and also when you are ready to scale your business. It must cater to your expanding product line, sales channels, and scaling operations. 

3. Great user-experience 

A complex-to-use system is as good as a manual process. So prioritize checking out the POS system’s interface and choosing the one that’s easy to use. Go for the one that requires minimal staff training. Solutions with great user interfaces make it easy for your employees to maintain inventory and for customers to make purchase payments. Ask for a demo or trial before you make the call.

4. Features and tools

Built-in features are another critical factor to weigh. You first need to pin down your expectations and needs from the POS system. This helps you find the system that can best cater to your business. Some of the features you want to look out for are real-time inventory tracking, automated reordering, sales reporting, and customer management. Some POS systems also offer features such as loyalty programs and more. Check them all out to make the right decision.

5. Pricing

The price of a POS system is not just limited to a subscription fee. It might come with upfront costs, hidden fees, and additional charges for updates or support. They collectively make a big expense for your organization, which is why you need to check out the pricing models. 

6. Customer support

It is also critical to check your software vendor’s support system. If they are not easily accessible or helpful, you must skip them. You need a vendor providing instant support and resolution, which can otherwise impact your business’s revenue because of inventory discrepancies and payment failures.

If you are ready to level up your business operations, you must start by improving inventory management with POS systems. Embracing a POS system will upgrade the way you manage inventory and introduce efficiency with minimal effort. Your employees will thank you for the support, and you will have all the data insights to make the right decisions, maximize profits, and scale up your business.

PayBy’s point-of-sale solutions are built to simplify in-person cashless payment transactions between consumers and businesses. This smart POS system is built to suit small to large merchants. 

Enjoy in-depth and real-time insights with data visualization to track transactions, number of sales, revenue, profit margin, inventory sell-through rates, cashier performance, and more with PayBy’s POS system. That’s not all. We also offer QR code payments, a smart box to receive and refund payments, the ability for merchants to check daily transactions, and so much more.

Get started with PayBy today.

WPS or Wage Protection System has been around since the year 2009, facilitating easy and timely wage distribution in the UAE. 

Though it’s been a while since it came into force, not everyone is aware of its functionality and importance. Employers and employees alike have a hard time keeping up with this evolving salary transfer system which was built to make their lives easy.

Not only does WPS lay down employees' rights but also makes it easy for employers to build an easy salary disbursement system that’s compliant with labor laws.

Curious to know more? This guide answers all your questions about the wage protection system in the UAE.

What is the Wage Protection System (WPS)?

Simply put, the Wage Protection System, most commonly referred to as WPS is an electronic medium to transfer salaries in the UAE. The Ministry of Human Resources and Emiratisation (MOHRE) and the Central Bank of the UAE came up with this system in the year 2009 to practice timely and precise salary disbursement. 

This system aims to not only protect the interests of the employees but also help ease business practices and their legal obligations. This system ensures whatever is promised to the employees, is fulfilled, and employers can do it seamlessly. The system went on to become a crucial factor in the UAE’s labor market.

What function does WPS serve?

UAE, the most popular choice for expats, had a grave concern - irregular salary brackets and disbursals. The need of the hour was a uniform system of salary disbursal and thus WPS came into being. This framework had just one ask - for the employers to disburse salaries electronically via authorized financial institutions. This centralized system also made it easy for the concerned authorities to monitor and control wage disbursement. 

What’s in it for the employers, you ask? Well, moving the disbursal process to an electronic medium gave employers the best of what automation had to offer. Companies started saving a lot of time, effort, and resources while also enjoying efficiency. 

Other perks of this system were slashed disputes and salary disagreements. Employers and employees had proof of legal evidence which uplifted the integrity and efficiency of the payment process. This simultaneously brought down labor conflicts and legal liabilities.

As for employees, their rights are now recognized. They are compensated appropriately and timely without having to ask for or fight for it.

How did the Wage Protection System Evolve?

The history of the Wage Protection System (WPS) goes back to July 2009. It was formed as a part of Ministerial Decree No. 788 to ensure employee wellbeing. This system was initially formed to help fight inappropriate practices employers used to escape paying wages, like having offshore accounts and other common instances such as wrong or delayed payments.

But the labor market has been evolving. To match the needs, the authorities have been fine-tuning this system to introduce new regulations or make enhancements to the current ones. 

The system saw fresh updates in Ministerial Decree No. 739 of 2016, 2019, and 2022. The new updates have massively contributed to the system, strengthening its power and adaptation to the needs of human resources. Fresh perspectives from the employers’ angles have also been introduced to help businesses. All these efforts have only made WPS more reliable, relevant, and important to employers and their employees.

What are the key components of WPS?

WPS is a huge contributor to enhanced financial stability and confidence in the UAE’s labor market. Precisely, these components were the key contributors:

1. Efficiency in payouts

As the prime objective, WPS ensures diligent observation and supervision of wage payments by employers. It ensures the incorporation of best and fair wage disbursal practices. 

As a rule of thumb, employers need to upload the required information and documents to verify the agreement terms signed with the employee. The system also scans the documents to ensure the stated terms and conditions are compliant with the labor laws and secure employees' interests. It is compulsory for all private organizations in the UAE to adopt this practice to ensure employee protection. 

2. Punctuality in disbursement

Another core objective of WPS is timely salary disbursals with no delays. With the verification of documents, information, and employees' salaries, a set of payment instructions is released to the financial institution responsible for the disbursal. 

These institutions confirm that wages are complaints and then implement the process of transferring funds to the employees’ accounts. Employees' experience boosted confidence with timely disbursals and employers enjoy the reputation of being compliant. 

3. Structure in disputes

Not only does the system lay down terms and conditions for timely and appropriate wage disbursals, but it also lays down a structure to address and resolve wage-related disputes. The framework dictates MOHRE as the decision-making authority of the initial stage. 

MOHRE helps conflicting parties negotiate and find a common ground for resolution. Otherwise, the issue can then be escalated to Labor Disputes Settlement Committees. With the power to issue binding rules, these committees further help solve the dispute. This proposed approach drives peace by preserving and enforcing employees’ rights.

4. Improvement in compliance

It is compulsory for employers to adopt WPS and be compliant. Otherwise, this system also lays down ground rules for punishment if there’s a violation. Non-compliant employers have to face severe penalties such as operational restrictions and fines. 

What are the benefits of WPS?

WPS enforces transparency for both employers and employees as a common benefit. This collectively uplifts the nation’s growth and broadens the possibility of foreign investment. Here are the other benefits:

For employees:

• Timely payout of wages
• Fair salary brackets and wages
• Reduced wage-related labor disputes
• Safeguarded rights in the private sector
• A productive work environment for employees

For employers:

• Better & efficient payroll management
• Reduced administrative burdens
• Time savings with automation
• Compliance with labor laws
• High reputation that attracts skilled labor

How to prepare for the Wage Protection System?

Before you kick start the process of adopting the WPS system (which is a must if you want to do business in the UAE), here’s a pre-to-do list you must complete: 

• Have a corporate bank account registered in the UAE
• Sign a contract with a WPS agent (a bank, exchange house, fintech, or any other financial institution)
• Create a payroll cycle according to Ministerial Decree No 788
• Confirm to pay 70% of all staff or 75% of wages or salaries
• Agree to pay fees, charges, or any other WPS expenses

When you are all done with the list, follow it up with a 4 step framework to register for WPS:

1. SIF - get started with preparing a SIF or Salary Information File. This file should provide employer and employee details like CTC, Basic Pay, perks, deductions, etc. Make sure you submit this file every time you release a payroll. 
2. Verification - MoHRE in partnership with the central bank will now go through the file and give you a go-ahead. Make sure you adhere to all the rules, regulations, and compliance requirements.
3. WPS agent buy-in - if approved, MoHRE and the central bank will now notify the WPS agent to go ahead with payment processing. You will be notified in case of discrepancies, but it is smart to avoid them as they may come with penalties and fees.
4. Payment - for the last step, the WPS agent now disburses the salary from the employer’s account onto the employee’s account.

The WPS framework is the perfect win-win situation for employees and employers. As a company owner, you must register with WPS to comply with labor laws, enjoy automation support & efficiency, and uphold a high reputation.

To know more, read this guide to know the nitty-gritty of WPS.

Need help with WPS registration and compliance? PayBy can help. 

We offer digital solutions for payroll integrations and wallets. This comes with the benefit of instant salary disbursals to wallet cards that are compliant with major UAE regulations. Above all, you can enjoy digital onboarding, payroll transfers, tracking, and more.

Get started with PayBy today. 

FAQs

What is WPS in the UAE?

WPS or Wage Protection System is a framework to secure the interests and rights of employees in the UAE. It mandates electronic wage transfer for private-sector employers. 

What is the importance of WPS Salary in the UAE?

It is mandatory for every MoHRE-registered employer to adopt WPS and practice WPS-compliant salary disbursal methods.

How to know if my company is WPS compliant?

Anyone can check the WPS status of an employer by visiting MoHRE’s official website.

Are companies with few employees required to register with WPS?

If your company has a headcount of minimum 10 employees, you must register with WPS.

The digital shift is today’s reality, more vividly in the payment industry. Digital transactions are super convenient and have changed the face of payments. But it also has its share of challenges.

Some of the common challenges include safety and security issues, technical challenges, geographical limitations, payment processing downtime, and chargebacks.

While they all affect your business’s finances and cashflow, one of the most challenging ones to handle are disputes and chargebacks. If a business sells to global markets and manages records manually, they can potentially end up spending hours on the audit process and still lose the case.

In this blog, we give you a quick recap of what chargebacks are, common chargeback reason codes and how payment gateways like PayBy can help you prevent them.

What are chargebacks?

When a customer disagrees with a charge and disputes the transaction, it leads to what is called a chargeback. A successful chargeback reverses a payment and sends the amount back to the customer’s account.

But in addition to the reversal, the issuing bank or credit card issuer levies a fee on the merchant and the payment gateways.

This results in merchants experiencing revenue losses and paying additional fees, which affects their bottom line. A high chargeback rate can also lead to revoked payment processing privileges.

It is important to note that a chargeback is not similar to a refund. In a refund, the merchant voluntarily disburses funds for whatever reason. However, chargebacks are initiated by customers mostly via the issuing bank.

Here are the steps for how a chargeback is processed:

• Dispute initiation - a customer connects with the issuing bank to dispute a transaction for a reason. The issuing bank, in partnership with the acquiring bank, lodges the dispute and processes it. Money is debited from the merchant’s account and credited back to the customer’s account. The payment gateway notifies the merchant of the transaction, following which the merchant can take action.
• Merchant response - when notified, the merchant launches an investigation into the dispute. The merchant can choose to accept the chargeback or counter the dispute by submitting evidence to prove the request is invalid.
• Issuer's decision - when the merchant counters the dispute to claim the request is invalid, a dispute resolution process is initiated. The issuing bank reviews all submitted documents to make a decision.
• Potential outcomes - if the evidence is legit, the merchant wins the chargeback and the funds. Otherwise, the dispute and the chargeback are lost.

In this process, payment gateways play the role of notifying the merchants about the issuing bank initiating the chargeback. They also help with processing, managing and mitigating chargebacks in the future.

What are chargeback reason codes?

Issuing banks, while processing a chargeback transaction, issue an alphanumeric charge code. The purpose of the charge code is to inform the merchant of the reason behind the chargeback request. These reason codes are unique to card networks such as Visa, Mastercard, Botim, and more. Payment gateways may launch their own set of reason codes too.

These alphanumeric codes are carefully structured to educate the merchant about the underlying reason for the dispute. Some codes are alphabetic, like “DP”, illustrating the initials of the reason “Duplicate Processing”. While some are a combination of letters that explain the dispute group and numbers that point out the exact reason. For example - F14, where “F” is fraud and “14” is the reason.

Though the reason code system in chargeback management might differ, the categorization is more or less similar:

• Processing errors
• Authorization errors
• Fraud
• Customer disputes
• Miscellaneous
• Not classified

How payment gateways help manage chargebacks 

Chargebacks are not just merchant liability; they cost payment gateways a fee too. For company financials as well as better partnerships, payment gateways can help merchants with chargeback management.

Payment gateways assist merchants with better tools, features, accessibility, fraud detection, and management processes to resolve chargebacks. Some payment service providers go the extra mile to work with issuing banks for better merchant account status management. Here are some of the assistance from payment service providers:

Fraud prevention tools

Payment service providers maximize machine learning (ML) and artificial intelligence (AI) usage. These technologies have the power to detect and stop fraudulent activities. They can also pick up patterns of possible fraudulent activities and take the correct measures to cut them off.

Furthermore, the service providers deploy strict safety features such as multi-factor authentication (MFA) to authenticate users, card verification value (CVV) or card security code (CSC) to increase security, advance verification services (AVS) to compare and verify billing addresses, and more.

Dispute resolution features

Payment gateways provide guidance and support to resolve debit as well as credit card disputes. They offer an established process for dispute resolution that merchants can plug in and deploy. Besides being equipped with the process, they also provide real-time access to any data, documentation support, transaction records, communication channels, and evidence-gathering support.

They may also offer educational materials that walk merchants through best dispute resolution practices, strategies, compliance information, and more.

Automation

Some payment solutions can help merchants automate many mundane chargeback management steps. They help the company set up an automated chargeback alert to generate real-time triggers every time a customer requests a chargeback. Such prompt notifications leave enough time and room for merchants to chart a course of action in their favor.

Risk analysis

The chargeback resolution process is complex, time-consuming, and labor-intensive. It only makes sense to counter a chargeback and go through the entire resolution process when the odds are in your favor. Some payment providers can help you with just that.

They offer risk analysis based on all the data and documents. You can generate a detailed report of your winning or losing chances, or at least get a percentage win score. You can then analyze it to decide whether to fight a chargeback or accept it.

How can merchants prevent chargebacks with payment gateway assistance?

Spare yourself and your employees the hassle of chargeback resolution and strategize its prevention. Here’s what you can do:

• Communicate clearly - practice clarity in communications. Communicate the terms and conditions of your product or service, features, pros and cons, agreements, policies, and more to your customers in an easy-to-understand manner. Eliminating misconceptions can reduce chargeback requests to a great extent.
• Prioritize safety - choose the payment gateways that provide a high level of safety and security. You, your business, and your clients are in dire need of this. A couple of the safety measures you can follow are encrypting customer data for safe storage and following authentication practices like requesting multiple-factor authentication or CVV codes. AVS (Address Verification System) is another safety measure where billing addresses are cross-checked for verification.
• Be thorough - have thorough steps in place to verify a transactor and the status of the transaction. Always confirm if the product was delivered, its delivery time, and receiver. As the merchant, you also need to have a thorough billing process. Display the charges and a breakdown in detail. Also, include any additional charges as and when they are levied.
• Improve customer service - gaps in customer service often lead to chargebacks. You must provide your customer support team with everything they need to resolve customer queries proactively. You can also educate your customers to seek help from your helpline numbers before disputing a chargeback because it is faster.
• Do follow-ups - you must monitor your chargeback rate and constantly try to improve it. You can always get started with your existing customers. Collect feedback from them to identify the shortcomings, if any, and ultimately correct your chargeback rate.
• Keep records - maintain a database of your customers as well as chargebacks. In this way, you will have access to any documents you might need as proof, for research and analysis, and more.
• Implement Security - you can use your payment gateway’s fraud detection tool to keep malicious activities in check. These tools not only detect and stop existing types of fraud attempts but also analyze data to find emerging patterns.

Lastly, be aware and informed at all times. Know your industry regulations, legal obligations, limitations, best practices, and more to make the best decision for your company. Build processes tailored to the unique needs of your company.

If you are on the lookout for a payment gateway that offers chargeback management assistance, PayBy can help you. We offer end-to-end chargeback management and also shield your business from false chargeback requests.

Get started today and manage chargebacks efficiently with PayBy.