What are the implications of digital payment systems on banking?
The rise of digital payment systems significantly impacts traditional banking by shifting how consumers interact with financial services. These systems, including mobile wallets and contactless payments, enhance convenience and speed of transactions, often reducing reliance on physical banks. As a result, banks face pressure to innovate and adopt new technologies to stay competitive. Additionally, digital payments broaden access to financial services for underbanked populations, thereby promoting financial inclusion. However, increased adoption raises concerns over security and fraud, necessitating robust measures to protect users and maintain trust in the banking system.