5G to ignite a payment revolution

“As the fifth major revolution in telecoms, 5G promises to completely revolutionise the retail shopping experience.”

The fourth industrial revolution is here, signalled by the proliferation of digital technologies into all industries and spheres of life. From smart homes and personal robots, to self-driving vehicles and automated logistics, society is on the brink of a complete transformation. One sphere of modern living already undergoing radical evolution is the way we pay for things. Our world is fast becoming a cashless one, as more and more innovative digital payment methods are introduced. However, the technological future envisioned by the world’s leading tech giants is only possible with a robust, efficient digital connectivity framework. This is where 5G technology comes in. As the fifth major revolution in telecoms, 5G promises to revolutionise the retail shopping experience completely. From the way consumers shop and buy, to the manner in which payment providers and merchants operate, 5G is set to disrupt the retail industry in a positive way.

What is 5G technology? “5G is the biggest leap forward in mobile technology to date, massively improving internet connectivity and data transfer rates.” The ‘G’ in 5G stands for generation, which means it is the fifth generation of mobile technology. Since the first cell phones were introduced in the 1980s, replacing wired telephone grids, mobile technology has evolved at break-neck speed. First generation analogue cell phones operated on 1G network technology. This framework was only able to handle the receiving and transmitting of wireless voice calls. The second generation of mobile connectivity, 2G, allowed cell phone users to access the Internet. This also enabled users to send and receive text messages (SMS), multi-media messages (MMS), and use rudimentary ‘apps’ such as Mxit. Internet connectivity speed of mobile phones was greatly increased by 3G, and provided the framework needed for the introduction of the first smart phones. This brings us to 4G where we are today, facilitating the convergence of wired and wireless networks, GSM technology, wireless LAN, Bluetooth, and other mobile technologies. The biggest leap forward in mobile technology to date has been 5G, which improved Internet connectivity and data transfer rates massively. For example, 4G allows for real-world download speeds of 10MB per second, while 5G takes this up to 100MB per second. The capabilities of 5G technology will facilitate futuristic concepts such as augmented vehicle dashboards, augmented shopping, personal robots, and real-time working in the cloud. So, how will 5G technologies change the way customers pay for things?

Increased speed of payments Gone are the days where paying for groceries required a teller to scan every item physically, swipe a customer’s bank card, have them type in a pin code and – signal willing – the transaction was completed. With 5G instant payments are allowed by a single tap, click, voice command or facial scan. This will reduce the time customers spend at till points, making the queues move faster. Customers will be able to scan products into a virtual shopping cart, and instantly pay digitally, negating the need for shopping isles altogether. With 5G the speed of transfers between banks, issuers, clearing houses and merchants will also increase.

Tighter payment security With new payment technologies come new ways for criminals to target the public. Current cyber-security protection like bank PINs, OTPs, and passwords will not be enough to protect customers against future threats. New 5G technology will provide improved blockchain transactions, and more data sets to be collected and analysed by payment authorisers. This will make it much easier to confirm a customer’s identity. Biometric security clearances will also become more widespread, providing multi-layered security, including voice, fingerprint, and facial identity validation.

More payment opportunities By enhancing the scope of the Internet of Things (IoT), 5G will facilitate more payment opportunities for customers. For example, shoppers will be able to make payments from smart watches, on vehicle dashboards, while gaming. The traditional tethered point of sale will be mobilised, allowing for payments anywhere on the planet. Even in the remotest of locations, which are yet to experience internet connectivity, vendors will be able to accept and process digital payments. This will grow the digital economy immensely, and allow previously disconnected populations to compete in new markets.

Personalised payments Everything customers do online creates data. The more we interact digitally, the more data we create. Data is a valuable commodity for all players in the service industries. From the retailers who sell products and accept payments, through to the financial institutions processing these payments. The more data available to payment players, the better they will be at personalising the services they offer buyers. For example, with 5G technologies in place, a customer buying a big-ticket item can instantly be given a selection of financing options based on their previous spending habits and credit history. In conclusion, it is safe to say that 5G will transform the world of shopping completely for years to come. However, don’t think these changes are reserved for the distant future. In the second half of 2019, a few countries – including China – had already started to trial 5G networks. It is only a matter of time before the fifth telecommunication revolution enables seamless shopping and payment experiences in South Africa.

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