Delivering Payment Innovation: 7 Ways Web 3.0 Will Revolutionize The Future of Fintech

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The potential of Web 3.0 is immeasurable, and its transformative potential for the fintech landscape is likely to change our perception of finance forever. 

In terms of market size, the Web 3.0 market is set to grow to a value of $82.93 billion by 2031, representing a CAGR of 49.3%. Its impact will be felt across many industries, but perhaps none more so than fintech. 

Technologies like artificial intelligence (AI), the Internet of Things (IoT), and blockchain technology will all help to deliver Web 3.0 transformation throughout fintech. This will help to add unprecedented levels of security, transparency, and convenience throughout finance and shape the future of transactions. 

With this in mind, let’s explore seven ways that Web 3.0 will be a revolutionary influence in the future of fintech: 

Building on Smart Contracts

Crucially, Web 3.0 will help bring brand new financial services to fintech. Working alongside big data and decentralized ledger technology (DLT), we will see smart contracts bring unprecedented levels of ownership rights to users

Smart contracts are a revolutionary force for fintech because they use blockchain technology to self-execute whenever pre-determined conditions are met. This means that complex agreements can be made without the need for third parties from financial operations, paving the way for peer-to-peer (P2P) transactions between users online. 

The implications of smart contracts on fintech could bring brand-new approaches to lending and borrowing and drive more trust-based access to financial services. 

Hyper-Personalized Advice

Web 3.0 will also herald the democratization of big data. This means that it can work seamlessly with AI and machine learning (ML) to deliver more intelligent insights into the spending behavior of users to generate hyper-personalized financial advice that perfectly compliments their habits. 

Using these emerging technologies, it will be possible for fintech platforms to analyze the banking personalities of their customers to offer focused data to help them understand how they can achieve their savings goals. 

AI and ML can also combine to create bespoke investment plans that help users save a comfortable portion of their monthly income, along with the ideal level of risk to help them save the money they need over specified time frames. 

Next-Generation Security

Because blockchain technology will power the age of Web 3.0, we will become accustomed to having our fintech solutions accessible via decentralized networks. 

Decentralization significantly reduces the chances of hacking or fraudulent activity taking place to infiltrate financial systems. This is because blockchain operates as a distributed digital ledger in which changes would have to reach a consensus among globally positioned nodes powering the chain. Without the ability to identify and manipulate these distributed machines in sync, blockchain is a powerful security tool for users.  

With a reported 80% of organizations being victims of payment fraud in 2023, it’s clear that Web 3.0 technology can carry a significant advantage in delivering more trust within the fintech landscape. 

Borderless Transactions

One of the biggest innovations that Web 3.0 will bring to the fintech landscape is cryptocurrency. Today, we’re familiar with cryptocurrencies like Bitcoin as an investment option. Tomorrow, crypto will be used to make payments and transactions across borders and inside the metaverse. 

With Web 3.0 driving digital transformation in fintech on an international scale, the importance of cryptocurrency payments will grow among globally-focused businesses and customers alike. 

Payment Innovation

We will also see cryptocurrencies combine with other cutting-edge payment innovations in the age of Web 3.0. 

For instance, QR codes will become a more practical way of uniting brick-and-mortar retail with online customer expectations. 

QR codes will be capable of driving customer interest in products and services in-store, where their smartphones can scan a code to access in-depth information that would otherwise be impossible to access. 

These codes can also be used to revolutionize the in-store experience, helping customers to access discounts, loyalty programs, and complete transactions using their chosen currency all without the necessity of human interaction. This can help stores improve efficiency and offer greater payment flexibility to visitors. 

Simplified Access

One of the biggest advantages of Web 3.0 will be in breaking down accessibility barriers in terms of information retrieval. This will aid companies linked to lending and borrowing, as well as buy now pay later (BNPL) firms, and other fintech services that use open finance to easily access information regarding the amount of money available in an account or verify the identity of users in an autonomous and secure manner. 

Cost-Effective Adoption

Web 3.0 will also lower the adoption cost for enterprises adopting fintech solutions and will aid fintech startups in developing software at a cheaper rate. 

As the technology powering Web 3.0 innovation grows, it will become possible to set up financial frameworks without the necessity of intermediaries and middlemen, who could command higher administrative costs. 

Instead, through a combination of blockchain technology, smart contracts, and artificial intelligence, the optimization of resource allocation, utilization, and brokering of financial services can be a direct business-to-client connection, without running up unnecessary costs to centralized third-parties. 

Driving Open Finance

The Web 3.0 revolution is already underway, and the ongoing AI boom will aid fintech firms in accessing the opportunities leveraged by this brand new frontier for finance. 

From unprecedented security to frictionless global payments, Web 3.0 will fundamentally change the capabilities of fintech. For the industry players eager to out-innovate their rivals, it’s imperative that considerations be made today to embrace the transformative impact of Web 3.0 tomorrow. 

In a dynamic and ever-evolving landscape, it’s likely to be the fintech firms that make plans to accommodate Web 3.0 today that will thrive tomorrow.

On the date of publication, Dmytro Spilka did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.