When Digital Payments FAIL : Disconnected World | Power Failure and Internet Outage | PART 2

The sound of thunder echoed through the small business as David frantically tried to process digital payments from his customers. He had always relied on the convenience of digital payments, but he never imagined the nightmare that would unfold before him. Suddenly, a bolt of lightning struck nearby, causing a power outage and leaving David and his shop in complete darkness. With no internet connectivity, the digital payment system was rendered useless, and the customers were growing impatient.

In that moment, David felt utterly helpless. He wondered how he would keep the business going in the midst of the chaos. He had always taken the power and internet connectivity for granted, but now he realized just how vulnerable his business was without them.

This is the reality of the digital payment world. We are overly dependent on technology, and power and internet connectivity are the backbone of this system. Short-term power failures can be dodged by back-up supplies, but internet connectivity issue is not easy to solve.

However, there is hope. A few startups are already working on such use cases to make the digital payment world more robust. These innovative companies are developing solutions that can withstand power outages and ensure business continuity even without internet connectivity. As we continue to rely on digital payments, it is essential to remember the importance of preparedness and the need for backup solutions in case of emergencies.

Please note that, these innovative backup payment methods are not ubiquitous as normal digital payments. These are common in certain part of world or act as plan B in developed nations.

1. QR code-based payments:

This is a type of digital payment that can be used even when there is unreliable or no internet connectivity. In this method, the customer generates a QR code containing their payment information using their smartphone or mobile device. The merchant then scans this QR code using a QR code scanner or their own smartphone. Once the code is scanned, the payment information is stored. It will be processed and the transaction will complete once merchant device is connected on internet.

Alipay | China: 1.3+ billion active users
Paytm | India: 333+ million active users
GrabPay | Southeast Asia: 180+ million active users
KakaoPay | South Korea: 36+ million active users

2. Near-Field Communication (NFC) technology:

 NFC is a short-range wireless communication technology that allows two devices to exchange data when they are brought close together. This technology can be used for digital payments by enabling the transfer of payment information between a customer's smartphone and a merchant's point-of-sale (POS) terminal.

Without an internet connection, the payment data may be stored on the merchant’s device until the connection is restored. Once the connection is restored, the payment data can be transmitted and the transaction will be processed.

ApplePay | Worldwide | 500 million active users
GooglePay | Worldwide | 150 million active users
SamsungPay | Worldwide | 100 million active users
GarminPay | Smartwatch Payment | Worldwide |
FitbitPay | Smartwatch Payment | Worldwide |

3. Bluetooth-based payments:

This technology allows devices to communicate with each other without requiring an internet connection. Bluetooth-based payment system that allows customers to make hands-free payments at participating merchants. The system works by detecting when a customer is within range of a merchant's device, which sends a signal to the customer's phone/app. The customer can then confirm the payment on their phone/app without having to take out their phone or interact with the merchant's payment terminal.

PayPal Beacon | Worldwide

Bleep Pay |  UK

DigiSEq: DigiSEq is a payment system that uses a combination of Bluetooth and NFC technology to enable contactless payments.

4. SMS-based payments:

SMS-based payments, also known as text message payments, are a type of mobile payment system that allow users to send and receive payments via SMS messages. SMS-based payments are popular in countries where smartphone adoption is lower or where reliable mobile data connectivity is not widely available.

To use an SMS-based payment system, a user typically needs to register their mobile phone number with a payment provider and link their payment card or bank account. When they're ready to make a payment, they can send a text message to the payment provider with the amount they wish to pay and the recipient's phone number. The payment provider will then send a confirmation message to both the sender and the recipient, and the funds will be transferred between the two accounts.

M-Pesa: M-Pesa is a popular sms based payment system in Kenya.

Paym: Paym is a mobile payment system in the UK that uses sms to transact.

5. USSD-based payments:

USSD-based payments, also known as Unstructured Supplementary Service Data-based payments, are a type of mobile payment system that allow users to make payments using their mobile phone's dial pad.

To use a USSD-based payment system, a user typically needs to dial a short code on their mobile phone and follow a series of prompts to complete the payment. They may be asked to enter their payment card or bank account details, as well as the amount they wish to pay and the recipient's phone number.

Ecobank USSD: Ecobank is a Pan-African bank that offers USSD-based payment services to its customers in several African countries.

Orange Money: Orange Money is a mobile payment service that is available in several African and Middle Eastern countries.

Quickteller USSD: Quickteller is a mobile payment platform in Nigeria that allows users to pay bills, buy airtime, and transfer money using USSD codes.

 6. Mobile Based Card Reader:

A mobile-based card reader is a device that can be connected to a smartphone or tablet to accept credit and debit card payments. It allows businesses or individuals to process card payments on the go, using their mobile device as a point-of-sale (POS) terminal.

Mobile-based card readers typically connect to a mobile device via Bluetooth or the device's headphone jack. They can read the information stored on a customer's credit or debit card, including the card number, expiration date, and security code, and process the payment.

Mobile-based card readers are often used by small businesses, independent contractors, and freelancers who need to accept payments on the go. They are a convenient and cost-effective alternative to traditional POS terminals and can be used in a variety of settings, from farmers' markets and pop-up shops to trade shows and festivals.

Square Reader: Square Reader is a popular mobile-based card reader that allows merchants to accept credit and debit card payments using their mobile phones or tablets.

PayPal Here: PayPal Here is a mobile-based card reader that allows merchants to accept card payments using their mobile phones or tablets.

iZettle Reader: iZettle Reader is a mobile-based card reader that allows merchants to accept card payments using their mobile phones or tablets.

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