Payment systems are revolutionising as technology advances

accapr —  27 January 2014 — Leave a comment

payment services


By Faye Chua, head of futures research, ACCA

ACCA’s report on Digital Darwinism: thriving in the face of technology change, focuses on 10 technology trends with the potential to reshape the profession and business landscape significantly. One of the trends identified was the developments in payment systems.

Money has existed as a unit of measurement for more than 5,000 years. Since then, as cash has evolved, it has gradually increased the speed of trade, and money can now move between accounts electronically in the blink of an eye. Traditional notions and concepts of money and currency are fading. The use of cash is diminishing, cheques are being phased out and use of debit cards, pre-paid cards and the myriad of alternative electronic payment platforms is increasing. Banks increasingly provide their services online; statutory payments are increasingly made electronically; payment options using mobile phones are proliferating; there are many ways to make and accept payments for goods and services and to access start-up and working capital finance and trade finance instruments.

Developments in electronic payment technologies, e-commerce and e-finance are reshaping financial activity by:

  • creating safer, smarter ways to receive and make payments
  • automating complex transactions
  • improving cash flow management
  • broadening access to financial resources
  • expanding the market for banking and other financial services
  • increasing consumption in emerging markets
  • underpinning the development of new financial products and services
  • supporting the development and use of alternative currencies, payment platforms, and ways of defining and exchanging value, and
  • disrupting traditional business models.

There are virtual ‘digital currencies’ such as Bitcoin, Linden Dollars and Ripple in today’s marketplace. A virtual currency has a value in real-world currency and/or can be used to buy goods and services. Although most electronic payments are still made using traditional currencies, and traditional payment systems, the array of electronic payment mechanisms and service providers is expanding.

Peer-to-peer (P2P) lending sites such as Crowdfunder, Kickstarter and Zopa are also broadening both access to finance and investment opportunities. These can lead to financial rewards and more esoteric or intangible non-financial rewards, such as tickets to a film premiere, having a supporting character in a novel named after you, or the satisfaction of helping someone realise their dream.

Over the next decade, these and other developments in payment systems will bring even more change, as the impact of technological advances dramatically transforms the traditional landscape of financial transactions.

Over the next 5 to 10 years future purchasing decisions will become cluttered by more payment mechanisms and platforms, and wider access to alternative currencies. In the longer term there may be fewer currencies, though not necessarily because of the spread of alternative and virtual currencies. Some futurists predict a return to a few strong currencies or even one single global currency, used as gold and silver were in the past.

Read more about the technology trends that are impacting on the accounting profession at


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