How Cloud Computing Can Revolutionize
the Payment Industry
Migrating to the cloud is a lucrative decision for the payment industry as it grows faster than any in the financial sector. According to Insider Intelligence, the rise of digital payments will decrease cash and check usage by 18.5% in 2022.
And cloud-based payment systems can modernize the business model of many small and large businesses. Digital wallets, secure online payments, and payment gateways are some well-known examples of cloud computing payment services.
Such payment systems are popular through the convenience of mobile apps. Many businesses look into mobile app development services to effectively integrate cloud computing with payment solutions.
They simplify business transactions, regular payments, vendor-to-customer payments, and payment management.
What is Cloud Computing?
Cloud computing is a digital network of services like storage, servers, networking, software, and analytics on the internet. It is a platform where users can store, access, and manage their data effortlessly while the owners deal with its management and maintenance costs.
Statista reports that the revenue of cloud computing in 2021 reached $400 billion. And its integration with the payment industry will only speed up the growth.
Let’s understand cloud computing better to know how it can influence the payment industry.
Types of Cloud Computing
The cloud computing services can impact the payment industry through different sectors as mentioned below:
Software as a Service (SaaS)
Software-as-a-service is a system that delivers subscription-based software applications on the internet. It’s a system where the user benefits from its services while the owner takes care of system management and maintenance.
SaaS in the payment industry provides security, fast access, and cost-effectiveness.
Payment software-as-a-service (Payment Saas) is a cloud computing service that provides easy and secure payment gateways to vendors.
SaaS helps generate revenue by removing the need for your own system.
The cost of SaaS is shared just like its software. You can get lower transaction fees and multiple payment gateways as a result.
Infrastructure as a Service (IaaS)
Infrastructure-as-a-service is a pay-as-you-go-based platform that offers computing services such as data storage, servers, networks, and operating systems.
IaaS promotes low infrastructure costs, scalability, flexibility, business growth, and steady functionality.
Platform as a Service (PaaS)
Platform-as-a-service is a service where third parties/service providers offer a platform to develop, manage, test, and deliver software applications.
PaaS makes it easy to manage software and hardware applications on the internet as the service providers maintain the system infrastructure.
It offers better security, cost-effectiveness, custom solutions, and flexibility with its services.
Payment as a Service
Payment-as-a-service is a cloud-based service to modernize payment domains with SaaS and IaaS services.
PaaS provides cross-border payments, payment engine hosting, e-commerce gateways, card issuing, and e-commerce gateways.
According to MarketsandMarkets, PaaS may reach a value of $16 billion by 2024 compared to $5.7 billion in 2019.
Impact of Cloud Computing on the Payment Industry
The global integration of cloud computing with the payment industry has led to the growth of fintech solutions.
And such growth has revolutionized the payment industry with multiple benefits.
Promotes Cost-effectiveness
Cloud computing regulates innovation in the financial sector to benefit the payment industry.It can lower product development costs for payment transactions and multiple gateways.
The cloud also lowers the expenses of servers, data centers, and IT infrastructure. It helps fintech companies save money on ownership and infrastructure maintenance.
The cloud regularly manages and makes necessary improvements to the payment system.
Payment service providers then focus on the core functionalities when they do not have to worry about the cost of maintaining the payment system.
Compatibility with API ecosystem and Data Management
The cloud is compatible with API ecosystems, data management, and analytics. It helps payment providers improve data requirements and meet expectations.
And payment providers can easily comply with open banking rules/regulations with such benefits.
Improves Overall Security
The cloud service providers offer reliable and tested security for the payment industry. It ensures secure transactions between regular people and business professionals.
The cloud’s security policy also sets a standard for every financial operation. And that is why established companies like PayPal and Stripe have integrated with the cloud to solidify their fintech services.
Famous cloud technology providers such as AWS, Google Cloud, IBM Cloud, and Microsoft Azure have inbuilt security solutions. Such solutions protect the cloud infrastructure from cyber security attacks, frauds, and other risks.
Cloud computing providers also regularly update and improve security protocols.
Financial institutions and online payment systems can perform their core functionality with well-managed security.
The cloud service provider also has inbuilt monitoring systems. These systems monitor the payment system activities, usage, and suspicious online behavior.
Storage and Big Data
The finance industry requires substantial storage for payment, card transactions, insurance documents, stock market transactions, and loans.
The cloud provides unlimited storage for such data with tested platform security.
It helps store, manage, and access an unlimited amount of data securely and without effort.
Scalability
The payment industry grows every day but with the potential for many technical/other errors in its different sectors. Cloud computing prevents this by scaling resources to ensure the stable functionality of various payment services.
The cloud provides essential resources to scale up the infrastructure of digital payment systems that have countless servers in the cloud.
Compliance
The cloud has a strict policy to ensure that both parties comply with the stated payment regulations.
It protects financial institutions, vendors, and regular people from payment fraud.
Quick and Easy Payments
Many online payment systems and gateways are slow, time-consuming, and have a low success rate.
The integration of cloud technology solves this problem by making every payment and business transaction easy and possible with a single click.
Dashboard and Reports
Digital payment systems require a regular report for their system performance and its flaws. Such a report helps improve the payment system services for all users.
Cloud computing provides an inbuilt dashboard and reports to make this easy for digital payment systems. It helps analyze the potential and required improvements of the digital payment system.
Conclusion
Cloud computing integration with the payment industry improves the security, speed, and convenience of all personal/business transactions.
Businesses with cloud-based payment systems can protect their financial operations from fraud and cyber security attacks.
Get in touch with industry experts like a recognized app development company to learn more about cloud computing. And figure out how it can benefit your payment system.