The future of payments in Belgium, through the eyes of bit4you!
By Marc Toledo (Managing Director of bit4you)
Bit4you.io, the first belgian crypto exchange is working on new developments that we would like to share with you. In 2013, 54% of all payments made in Belgium were still made in cash. In 2018, according to the research firm iVOX, 77% of the 18–34 year old, 64% of 35–54 year olds and 67% of those over 55 years old never have any cash in their pockets, and only 5% pay via a mobile payment application
Electronic payment is therefore progressing, but compared to our Northern neighbours as Netherlands, Sweden or Denmark, it is stagnating.
What are the reasons for this stagnation?
1°) Electronic payments remain relatively expensive for merchants.
2°) New apps appear every month and merchants prefer to wait to know what the winning technology will be
3°) Belgians remain attached to cash for various reasons
a) People are afraid to leave a digital fingerprint that could affect their privacy.
b) The underground economy is also one of the factors that stimulates demand for cash, as it is the only means of payment that fully guarantees the anonymity of transactions, while electronic transactions represent a serious obstacle to undeclared payments. According to some studies, this underground economy represents around 18% of our GDP.
c) Some Belgians do not trust their banking institutions 100% and prefer to keep cash at home
d) The acceptance of new technologies is still very slow in Belgium
Yes, blockchain is also slowly being accepted and adopted
As we can see, only a combination of different regulations and technologies will allow the payment of the future to emerge and effectively replace cash payments: PSD2 and GDPR on one side with biometrics, contactless, blockchain and digital wallets on the other side.
Mobile and contactless payments is growing
Today, we are noticing a strong growth in mobile and contactless payments. One third of Belgians want to take their smartphone out at the checkout counter, or use a contactless payment method. The results in neighbouring countries show a marked interest in these technologies.
Contactless payments
Of the 16 million cards in our country, 6.2 million are equipped with the “contactless” system. Contactless payment in Belgium is in clear evolution this year compared to the previous year. Even if Belgians have not yet developed the habit of making their transactions via contactless payment, Worldline, the European leader in payment and transaction services, still recorded more than 4 million contactless payments in October 2018, seven times more than in October 2017. Contactless payment is, according to some users, the payment innovation that we can no longer do without once tested.
Biometric payments
With more than one in three Belgians willing to adopt biometric payment to pay in store and online, this technology is the most awaited innovation, especially when combined with the user-friendly contactless payment system that allows each user to get rid of their password or pin code.
The technology therefore allows transactions to be carried out by simple facial, voice or fingerprint recognition. ‘Smile to Pay’ developed by the Chinese mega company Alibaba allows customers to process their payment simply by smiling after placing their order. A 3-D camera scans the customer’s face to verify their identity and authorize payment via facial recognition.
The technology is available to customers registered to the Alipay app — the mobile and online payment platform. People also believe that this system reduces the risk of fraud as it appears to be particularly reliable and secure. Some studies tend to show that 93% of people are favorable to fingerprint recognition and 77% to facial recognition.
Digital wallets (!!)
The third technology that will help shape the future of payments is the digital wallet based on blockchain technology allowing instant payments and the use of smart contracts. Their growth is exponential and their use is increasing.
bit4you wants to play a role in this growth. More specifically in the crypto sector, to close the gap between consumers and crypto-assets.
A great example of digital wallet growth is Apple Pay, 27 countries compatible today and 18 with Android Pay. In 2020, more than 5 billion people will have a mobile Wallet installed on their mobile, because they allow users to pay with their phones.
It should be noted that the security of holding money in digital wallets is an element that reassures the majority of people. Indeed, since we no longer have to handle or transport cash, the risk of theft is really much lower and this reassures consumers.
At bit4you, we strongly believe that the combination of digital wallets and biometric payments combined with contactless payment systems is the key solution of the future. We are conducting our research and development in this direction that will allow all citizen to pay on an easy and safe manner.
Positive legal changes
On the legal side, the European Parliament’s PSD2 directives will help this transformation. PSD2 (Payment Service Directive) establishes a legal framework to better protect consumers, increase competition and enable simpler, safer and more efficient payments within Europe. With GDPR, the strictest privacy settings will apply by default and relief people afraid of leaving a digital footprint that may harm their privacy.
As we may understand, there will be less and less obstacles to the adoption of this kind of payment mean. No more cash, just your face, finger, credit card or smartphone with or without an online connection, to pay for all your expenses. Simplicity itself, for both consumers and merchants: it is fast, secure and, for the latter, it puts an end to the risks associated with cash handling. That’s the future.
bit4you is an European crypto assets exchange platform.
Facilitating your first step into the world of crypto is our mission.
Providing a complete set of blockchain related integrations, platforms and utilities is our vision.
