As technology continues to reshape our lives, digital currency emerges as a game-changer in our sales and purchases. It affects the way we handle financial transactions, and our choices of payment methods.
What are Payment Methods?
Payment methods are the various options available for customers to make payments when purchasing a product or service. Whether in a physical or online store, payment methods cover a range of choices.
In the near past, we relied on various traditional payment methods, most of which required our presence. Some examples of these payment methods are listed below:
- Credit and debit cards
- Mobile payments
- Online banking
- Bank and wire transfers
- Prepaid cards.
These are just a few examples of payment methods that have been around for quite a while. However, nowadays, the need for security and convenience has led to an evolution of payment methods. Looking at this evolution, it is safe to say the future will be cashless.
Digital Payment Methods
There are several digital payment methods available nowadays. Here are a few popular ones:
1. Mobile Wallets:
These apps allow you to store your payment information and make contactless payments using your smartphone. Some examples of such apps are Apple Pay, Google Pay, and Samsung Pay.
2. Peer-to-Peer (P2P) Apps:
A P2P app enables you to send money to friends, family, or even merchants using just their email address or phone number. Using their e-wallets to store your payment information securely, they allow you to make digital payments easily. Venmo, Paypal, and CashApp are good examples of a P2P app.
Digital currencies, such as Bitcoin, Ethereum, and Litecoin, have gained popularity as a decentralized form of payment, allowing for secure and borderless transactions.
4. QR Code Payments:
This type of digital payment method uses QR codes, which you can scan with your smartphone camera to make payments quickly and conveniently.
5. In-App Payments:
Many apps and platforms now have integrated payment systems. This allows you to make purchases or pay for services directly within the app.
6. Contactless Cards:
These payment cards have in-built Near-Field Communication (NFC) technology or Radio Frequency Identification (RFID). These NFCs and RFIDs allow you to tap or wave your card near a payment terminal to make a transaction.
7. Biometric Payments:
Some devices and payment systems support biometric authentication, such as fingerprint or facial recognition, for secure and convenient payments.
So, above is the list of the digital payment methods available today. Each method has its advantages and features. However, they all have some collective benefits.
Advantages of Digital Payment Methods
Here are thirteen advantages of using digital payments for 21st-century transactions.
Digital currencies allow you to make payments anytime, anywhere using your smartphone or computer.
Digital payments are usually processed instantly, saving you time.
Encrypted transactions and authentication methods help protect your financial information. This helps to minimize the risk of fraud.
Many digital payment methods allow for touchless transactions, reducing the risk of germ transmission.
Anyone with a smartphone or internet connection can access digital payments.
6. Global Reach:
You can make payments internationally without the need for physical currency exchange.
7. Record Keeping:
Digital payments provide electronic receipts and transaction histories for easy record-keeping.
Many digital payment systems integrate with other apps and services, making transactions seamless.
9. Environmental Impact:
Digital payments reduce paper waste associated with receipts and physical currency.
10. Enhanced Budgeting:
Some digital payment apps often provide spending analysis and budgeting tools.
You can set up recurring payments, hence, paying your bills on time.
12. E-commerce Growth:
Digital payments have fueled the growth of online shopping and e-commerce.
13. Faster Refunds:
In case of returns or refunds, digital payments can expedite the process.
There you have it. Now, you know the types of digital payment methods we have, and how they benefit our lives.
However, just like every other product of technology, digital payment methods also have their own challenges. Click here to learn how to tackle challenges of online payments, most especially in Africa.