Moving Digital Payments to the Cloud: The Modern Era of Transformation

By TM Praveen, CEO at Opus

digital The shift in the relationship between consumers and the digital world has resulted in an era of digital transformation and innovation, which businesses are trying to keep up with. For the last decade, organizations have steadily been building infrastructure for the future and financial institutions have been the pioneers in this digitalization journey. With the rising penetration of the internet in regions across the world, the internet and its connected devices are replacing the traditional forms of financial transactions. Businesses have been leveraging technology to provide users an integrated experience, which offers flexibility and accessibility. These developments have created a competitive and agile technology space, which is also more organised and inclusive.

This trend has given rise to a user base, which constantly expects newer digital experiences. The public is making higher demands on business, and particularly on banking tools. Change has been looming large and the tools that have been used for decades are no longer, relevant. Interestingly, this change is being driven by the customers, rather than the companies.

Moving Payments to the Cloud

In the financial sector, institutions that have moved to the Cloud have become the leaders of the pack. The Cloud is everywhere and is an extremely powerful technology that uses innovation to help businesses expand their reach. The customer is king and businesses which sensed the growing demand for technological innovation adopted the Cloud in their business models and operations. This helped these companies work smarter, at a lower operating cost. Cloud computing can be deployed and integrated easily and results in a drastic reduction in the time and effort put in by the user. According to a recent study, almost 70 percent of businesses are already using Cloud technology in one capacity or another, and nearly 20 percent claim that they plan to implement Cloud-computing solutions in the near future. The Cloud is far beyond its days of being something to fear and is rapidly finding its way into all the different aspects in the operations of a business.

The payments services industry is going through an unprecedented period of change and companies are constantly revamping services and solutions to suit the current digital environment. Businesses are increasingly adopting and offering products and services based on the demands of the digitally-savvy generations. ‘Swift’, ‘secure’ and ‘convenient’ are the buzzword now in payments. In the financial sector, digital is the new frontier and digital payment platforms have become ubiquitous. Cloud-based systems offer users a chance to pay over the internet, using smartphones, computers or wearables. The cloud then accepts and processes these payments. This is leaving the traditional point-of-sale technology far behind. The payments have now moved from the POS terminals to the internet nodes, which has resulted in a major push for mobility based inclusive service platforms.

Cloud-based payment systems integrate into the systems of an organization easily, thus creating better value for organisations and then passing the benefits of better user management to the customers. Cloud based payments are also far more secure, reliable, and offer better user management.

Instant, simple and secure real-time digital payment services have become a necessity for users; thanks to the value that they offer in terms of how they have simplified our lives. Successful digitization of payments demands a Cloud-based infrastructure. Financial institutions should move away from their redundant established core infrastructure to adopt the benefits of this next – generation technology.  However, this move does not need large investments or disruptive changes in operations that are difficult to incorporate. These institutions merely have to leverage the existing platforms and make investments based on their specific requirements. Businesses, must also implement the right balance between new technologies, processes and the employees to align with the new strategies. Moving the payment processing to the Cloud is no exception to these principles.

The alternate non–banking players or Fintechs brought this innovative technology to users, and a move to the Cloud has now become essential for legacy financial institutions to modernize their systems and to offer further value. This is particularly relevant in light of the current trend of payment volumes, the increasing penetration of smart – phones and the competition in the industry. The nature of competition in this industry means that any dissatisfaction with the user experience can lead to customer churn and a failure to attract new users. This will hurt the bottom line of the institution and the value of the brand.

The challenge in any digital infrastructure is to engage users, deliver information to them faster and limit the number of touch points by reducing processing time. Adoption of Cloud can help businesses achieve all this and more, which is why it is rapidly turning into a buzzword in today’s payments landscape.

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