With digitization over the world and contactless transactions, the demand for digital payments has increased exponentially. Such payments can be done via an online money transferring platform or application which is widely used. The payers and the payees can also avail themselves of an online banking system or other options like e-wallet and e-credit. Such monetary transactions can be done from one hemisphere to another without any hassle, only by using the internet and a device. It is convenient, time-saving, and greatly beneficial.
What is Digital Payment?
It is hard to define digital payments as there are multiple transaction procedures and relations between the payer, payee, and the agent. Usually, the payer pays the payee via an online transaction platform or they can pay through an agent who will receive the amount online and pass on the cash to the payee. Payments can be fully digital or partially digital, but digital payments have become a daily life activity for all. Almost every other person is a Smartphone user with a digital transaction application installed in it.
Benefits of Digital Payment
The growing demand for digital payments is directly based on the beneficial sides of it. Not only individuals but companies, international organizations, and governments of different countries are getting benefitted from the brighter sides of digital payment.
1. Cost-Effective
Digital payment saves a lot of cost through its efficiency and speed. It saves a lot of investment that is consumed by regular offline payments. A recent economic report shows that the Government of Peru haws has saved more than US$96 million by shifting government payments into more convenient digital coupons.
2. Utmost Security and Transparency
Digital payments are one of the safest methods as it maintained by trained cyber security operators. Its accountability and traceability make it more transparent to users who are afraid of making a bigger transaction. Not only single users but it also helps the government and bigger organizations through electronic Debit Benefits Transfers.
3. Inclusion in Finance
Multiple financial options are included in digital payments like debit card, credit card, saving account, insurance structure, and so on. Its accessibility in the multiple aspects of the transaction is making it the most used medium for every individual. ‘Payment Aspects of Financial Inclusion (PAFI)’ explains how digital payments have influenced the mode of payments through financial inclusion.
4. Inclusive Growth of the Country
The collective benefits of digital payment have helped many countries unlock their heightened economic opportunity. It helps to maintain a steadier flow in economy and resources which eventually boosts the GDP of a country. There are numerous academic proofs of how digital payments have put a widespread impact on poverty reduction.
5. Efficiency
Every digital payment and transaction gets done almost immediately and it takes a maximum of 3 business days to get the payment done successfully. Such a fast and efficient method of payment has enhanced the buying behaviors among customers with ease and convenience. Not only that, but online payments are greatly rewarding for every transaction made. It is safe, fast, and can be accessed by all.
Other than these benefits, there are multiple aspects of digital payments that are improving the payment sectors with modern innovations and advanced technologies. With its progress, digital payments show promising future aspects to be implemented in society as well as the world economy. Some of the innovating sides,-
• Contactless Payment
What can be better than a contactless payment in this post covid situation? Digital payments provide a secure and contactless method that offers seamless speed and experience.
• Open Application Programming Interfaces (API)
It is being greatly used in the public sectors for its relevant approach which invites beginners. It lowers the barriers to payment services for end-users.
• Distributed ledger technology (DLT) –
DLT helps to decentralize the common payment systems which rely on central authority and or banks.
• QR codes
Quick Response codes have become the most popular and easy way to exchange information with the payers. It is potential and greatly accessible as it requires nothing but a camera and an account linked to the application.
• Biometric
Biometric IDs help to identify an individual through distinguishing biological traits such as fingerprints, retinal scans, voice recognition, hand geometry, and so on. These are the parts of the most advanced security systems.
Conclusion
With such an array of benefits and promising innovations, digital payments have become the most widely used payment for everyone whether an individual, the government, or any other organization. Digital payments have slowly become a crucial part of daily lifestyle while gaining trust amongst users.
