Era of Digital Payment Transactions
July 26, 2017
It is certainly difficult to imagine everyday life in our globalized world without cashless payments. Last year, in UK alone there were over 72,000 operations made every minute. Moreover, 2016 became the first year when amount spent with digital payment mechanisms outnumbered the one spent with cash. The international structures of business operation would be nearly impossible if not for the efficient instant transactions and global money transfers.
Financial instruments as credit and debit cards along with other wireless purchase methods have simplified the lives of businessmen and ordinary people, who care about their assets. Carrying around big sums of cash seems pointless and highly inefficient, while with credit card negotiations you are often able to get bonuses and save money. Wired payments also deserve special attention. You no longer have to visit specific instances in order to pay your bills – you can do it by a couple of clicks. Meanwhile, modern financial service providers tend to offer various advantages, including 24/7 control over your funds, which prove that switching to cashless operations is a beneficial option.
This article will be, however, focused specifically on online payments phenomena, their projections, and advantages.
Global Payment Cards Data and Forecasts predict that by 2021 the volume of stream card purchases will reach $6 trillion. The data of 2015 is already quite convincible: the global amount of electronic payments added up to $2,7 trillion, which indicated a 26% growth rate and was equal to 12% of all payment card expenses. Such statistics make it clear that payment habits have rapidly changed due to developing financial internet technologies. There are a few key factors that led to shifts in consumer behavior.
The global popularization of gadgets’ and internet use is the primary one. Nowadays, even in worlds seemingly remote areas people are enjoying advantages of communication and shopping online. Consumer market expansion and growth of demand for online goods and services multiplied the number of merchants opening Internet shops, and service-providers. However, you might argue that online goods have already been on the market for a few years now but the demand for them was not as big.
The answer is simple
Prior, people were reluctant to online transactions due to personal information security concerns. Cases of fraud were numerous, as it was not as difficult for con-men to overcome simple scam-prevention measures. Nowadays, financial services’ providers, banks, and web merchants are highly concerned about Internet security, and spend billions on high technological developments that prevent any uncertified transactions or suspicious activity in wired payment systems. It is important to know that when purchasing or paying for something electronically today, you can be sure about your information’s security and confidentiality. Paying in online shops and mobile applications, such as Amazon, Uber, and numerous others, has never been safer.
Developments of online commerce and services that simplify streammoney operations have also influenced the reputation of the latter. Anyone is capable of understanding and conducting the simple steps for making fast electronic transactions, and save time for things that are truly important: family, business, hobbies etc. This factor continues to boost convenience of cashless payments, and reduce the popularity of paper money. Development of technological tools, which make financial activity times less complicated, has brought a revolution into the world of business and commerce. The magnetic strip that once allowed customers to use credit cards has now been replaced by fast- evolving online and contactless payment instruments and gateways.
When it comes to benefits, first thing that must be appreciated is how fast the funds are transferred. Offline operations may require days to reach the final beneficiary, while online payment processors – hours and sometimes minutes. This feature is highly convenient for businessmen and average customers. Electronic payment gateways are the best-suited and convenient option for international entities, due to instant currencies’ conversion. Also, as mentioned prior, many banks and financial service providers offer numerous advantages for all types of needs.
Enterprises can find fast pay-out solutions for their employees and households can enjoy online coverage of utilities, and of course much more. Sometimes cash-back options are also offered. Another universal advantage is the ability to conduct payments regardless of time and day, easily access your funds and get support 24/7.
In many countries the economy is transitioning to almost a completely cashless one. It is rare to find a place without a terminal or a contactless transaction device, and even church donations can be conducted through web. For instance, in Sweden many small stores have a legal right to refuse cash, and the metro pass can only be bought electronically. The banking institutions view the production, storage, transportation, and insurance of paper money as extra expense which can easily be avoided with digital transactions.
It is also important to mention that crypto-currency is becoming extremely wide-spread and legally accepted. For instance, South Korea has recently legalized Bitcoin international transfers. It is a new tool of finance that can change global economy.
To conclude, worldwide cashless culture is rapidly developing, expelling cash from everyday lives of customers. Predictions certainly lean towards even wider popularization of electronic transactions, however, the paper money is not on its way to complete extinction. Yet.