Due to the rise in digitalization across different industries the habits of different consumers have changed drastically. But the arrival of the COVID-19 pandemic caused entire industries to face changes in different trends and also enabled the use of different modern technologies for various purposes. One of the most prevailing technologies that came out as a beacon for different businesses and helped them in facing various challenges put forth by the pandemic is the RFID. It has made different operations across businesses become even more efficient and help them tackle different issues.
By offering contactless alternatives to their clients, banks cannot just advance a significantly better client experience; they can likewise offer value-added services and hence differentiate from their rivals. With new upmarket contactless smartcards showing up available like metal cards, banks can likewise focus on a more distinct and rich demographic. In this blog, let us look at some of the main reasons why financial companies should be adopting RFID-based fintech software solutions.
RFID in Financial Sector
When it comes to the financial sector, companies have found the use of RFID to be beneficial for them resulting in improved operational efficiency and data security. Instead of RFID banks and other financial institutions have been using barcodes or any other methods for their tracking operations and data transfers etc. And when it comes to payments, they were entirely based on either cash or cards. But with the arrival of RFID technology, digital payment and mobile wallet solutions have faced a dramatic change and have become even better. RFID has made payment methods become completely contactless and therefore, requiring no physical contact. It allows the users to make payments just by holding their cards in front of payment terminals that make use of Radio Frequency to complete transactions. Hence, it makes payments faster, more secure, and convenient. Let us know about the 5 main reasons why financial companies should be adopting RFID-based digital payment solutions.
Facilitates cashless operations
RFID tags and cards are highly convenient and they are mainly beneficial for banking organizations as they can either be used as a payment solution and tickets/tags for different operations. RFID payment methods allow for proper contactless payments where the person to whom the payment is to be made uses his terminal to activate the customers’ RFID card and then it reflects with a user ID and payment information. Apart from this, banks can also make use of RFID-based tags and ID cards in lockers too. That makes it easier for customers to use contactless methods in security and other operations.
Infographic created by Clover, a retail POS system company.
RFID improves the speed of operation and convenience
In banks and financial organizations, identification is a major process that is carried out in almost all the operations that customers demand involving and transaction. So, the use of RFID in such operations can help improve the speed and provide better convenience to finance employees. It is because a user can simply identify himself by putting his RFID card/tag in the form of the terminal and have his identity verified in just seconds. RFID makes this operation better as there is a much faster speed of communication and it also provides better throughput when compared to other processes such as swiping a card. Therefore, RFID is much better than conventional operations, and banks & other financial institutions can adopt it for better efficiency of operations.
Reliability and durability
When compared to traditional cards having magnetic or electronic chips, RFID-based cards are more durable and reliable. On one side, magnetic/electronic cards are highly sensitive to electric and magnetic fields that make their use to be riskier than others. But on the other hand, RFID is neither at risk due to electronic interference nor due to physical factors. In banks, where systems are highly exposed to different elements as well as are under high usage, RFID solutions are very well suited to them. Therefore, it makes the RFID-based payment solutions have greater physical benefits and better applications in the financial sector.
Better Security and Privacy
With the existing payment methods, you might have to compromise on security as there is a high risk of fraud because there is a high risk of fraud happening due to unauthorized access. But RFID-powered fintech software solutions can help financial institutions to improve the security in their identification processes and can provide better credential verification. It is because RFID has more secure storage of credentials and it provides better communication of identity information, making it more difficult to forge and modify credentials. Therefore, making it more secure to use RFID for payments. Additionally, RFID cards are made with the implementation of required privacy policies, making it better when it comes to customers’ privacy concerns.
RFID provides a better customer experience
When the payments and identity verification processes become faster, more convenient, and effortless. This allows for more throughputs across customer terminals due to quick processing. And just because of this, customers aren’t constrained to their cash as well as they can easily use their contactless cards for payment. Conclusively, the use of RFID in mobile wallet solutions makes it more efficient resulting in great customer experiences while using RFID-based payment solutions.
So, these were the main benefits or the reasons why banks and financial institutions should adopt RFID-based payment solutions and develop a wallet app using this concept. Apart from these benefits RFID also features other advantages such as it increases the operational efficiency of processes. Since RF-based payment methods are used without any power given to them, it makes it more efficient to read data from them. And because RFID tags don’t require any physical contact, multiple IDs can be processes when in range. So it eliminates the presence of queues and makes it better to process data in different financial operations.
Additionally, RFID-based cards are economically better as they have a low maintenance cost and operational costs too. And lastly, it allows for real-time tracking of data even in tough environments, making it a great way to keep track of data, process, and collects information. So, even in tough physical conditions, RFID is great to use. And the real-time data tracked by RFID tags allow for better decision-making that can eventually improve business performance in the financial industry.
Conclusion
Financial organizations all over the world prioritize new technologies and RFID is among those that have the potential to improve the security of operations and provide great convenience to their customers. Maybe it is identity verification or payment methods, RFID is great for either use. Along with great security and convenience, contactless payment methods feature great flexibility and reliability. It makes them improve the performance of different businesses and meet a variety of requirements of the financial sector. In the upcoming years, contactless payment methods are set to grow rapidly with even better improvements in the technology yet to come.
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