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Digital Payments – Yay or Nay?

by Innov8tiv.com
Kenyans To Enjoy Tap-and-Go NFC-based Cashless Payments Synced with Mobile Money M-Pesa

Digital payments are a relatively new trend in the financial sector. People can transfer their money easily with a simple click on the mouse or tap on their smartphone. No hassle at all and very convenient for both parties involved. But, are digital payments really that good?

What are digital payments?

Digital payments are a form of electronic money transfer. It can be carried out in an online or a mobile system and it is very commonly used by the young people nowadays. There are companies, like plixpay.com, who offer you the possibility to open your e-wallet and put some of your money in there. For the one who is not familiar with the term e-wallet, it is a digital place where you can deposit some of your money. It is like an electronic bank account, but there are no banks involved in this type of financial services.

It is very convenient, to be honest. You don’t need to go to the bank and wait for your turn at the queue so you can get some money from the cashier. It takes a long time and it costs you too much time, and they are not flexible in their working hours while digital payment companies work 24/7 all year round.

Digital payments pros

Digital payments have many advantages. Here are the most popular ones:

1) Security – The safety of your money is very important if we talk about online banking. It can be hacked and even stolen, so it is better to be careful. But, when you open a wallet at a reliable e-payment provider, you can be sure that your money is safe. You can’t have it stolen and you don’t need to worry about the safety of your credit card details when you pay online as long as you do not give anyone your codes for payments. It is possible to secure your money by fingerprint scanning method if your device has a scanner. Another highly personal system is face recognition and it is also enabled for e-wallet users.

2) Easy to use – Digital payments are very simple. To use them, all you need is to sign up for an e-wallet, deposit some money and then use it to make payments. You do not need to have a bank account or credit card in order to do it. To make a payment or transfer you just put in some logging details and PIN.

3) Fast – Unlike the bank transfers, you don’t have to wait for days until your payment reaches the recipient’s e-wallet/bank account. Digital payments are fast and efficient. It takes a matter of minutes at the longest to transfer money to the receiver account.

4) Currency- free – You can transfer money from a wallet in one currency to the other without any conversion or exchange. This is very useful if you don’t know the cost of living and prices in the new country. Also, if you are from a different country, it will be easier for you as there are no bank accounts that need to be opened in the process, so for foreigners, it is faster to open an e-wallet than a new bank account.

5) No problem with bank working hours – There is no need to go somewhere before the banks are opened again in order to deposit or withdraw your money. Everything can be done by yourself at home or even during coffee break at work. It is also useful for people who work nights and do not have to wait till the next morning to make work-related payments.

6) Simpler payment– in order to make payment you need to put in less information than during paying by card. Sometimes there is no need to write anything at all because it is possible to put your finger on the fingerprint scanner and it is enough authorization. It is also easier for sellers, they can add a digital payment system there so the customers could make payments directly in their e-wallets.

Digital payments cons

Digital payments are not without flaws, of course. They have some disadvantages that might affect their popularity among people who consider using them

1) No withdrawal – The main problem of digital payment is the fact that they are not easy to cash out. If you want to get your money back, in exact sum, then you can’t as these payments are not cashable in an ATM machine. The only way to get your money is by transferring it to a bank account. This is very problematic if you need to have cash on you.

2) No payments in site – That is true especially for the ones who travel a lot, especially to exotic countries where there are mainly cash or simple card payments in shops, because they can’t pay with their wallet at restaurants, cafes or any other places that are not involved in digital payment systems. Special apps and software must be downloaded on terminals to receive such payments and it is rare even in highly developed countries.

3) No emergency cash – In case of an emergency, as long as it does not involve paying online, there is no money available if all your funds are in an e-wallet.

4) Not accepted everywhere, even online– when paying online, you can’t be completely sure if the other side accepts digital payments. Some merchants do not accept e-wallets, some stores even don’t have an option for digital payments on their websites. It is good to check if the shop accepts digital payments on their website under “payment methods”.

Conclusion

Digital payments are a great alternative for paying by card online, but they can’t be used instead of credit cards entirely in every situation. Special apps and software need to be downloaded on the other side of the terminal. It is possible to access some website with terminals where the payment can’t be done in a browser, e.g. Uber.

Digital payments are a great solution for people who travel a lot as they don’t have to worry about converting currency rates and opening bank accounts in a new country every time they move out for a while. Digital payments are highly secure and there is no problem with bank working hours, so they can save you a lot of time in this busy world.

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