Digital payment modes to simplify our lives
Have you faced the challenge of making cash payments at the grocery store? Have you fumbled up due to the lack of cash? Not anymore, with the digital payment system in the offing. Significantly, the digital payment system is the buzzword in the contemporary payment market.
By definition, digital payment systems connote the electronic transfer of money, as opposed to the physical cash payment. This is through different modes like; payment via an app, netbanking, contactless cards, etc. Going
ahead, digital payment is the need of the hour in consonance with a lot of benefits. Of these, multiple payment options, payment tracking, safety, and security take priority.
In this blog, I will walk you through the sought after payment modes of 2019.
1. Digital payment using E Wallets
Ewallets connote virtual wallets used to make payments with the help of a mobile or a computer device. This isakin to holding the personal, physical wallet under one head. Herein, the account details of a user linked to the
wallet to bring in ease of mapping of a user’s personal information. It comes with security features like passwordauthentication, KYC check, etc.
Advantages of Ewallets
- Ewallets do not require you to key in precise details like CVV, the expiry date of the card, mobile number,etc. With these added security features, payment fraud reduced.
- The user interface of Ewallets is easy to navigate. You won’t experience the hassle of keying in personal details for payment.
- In other words, the preloaded data facilitate easy payments. As a result, payment processing takes place in a quick and hasslefree manner.
- Data secrecy happens through the wallet to a wallet or the bank to bank transactions. Hence, this complies with the data security clause of government organizations.
- On a different plane, ewallets come with financial incentives and offers. Going ahead, this provides a good return on investments on payment processing.
Disadvantages of Ewallets
- While ewallet is changing the face of payments, it is not affordable due to the lack of internet and mobile connectivity.
- Besides, ewallet set up requires costly investments in the form of software and hardware.
2. Digital payment using Contactless card payments
This digital payment mode makes use of near field communication (NFC) or Radio Frequency (RFID) technology to facilitate card cum mobile payments. It includes credit/debit cards, smart cards, etc.
On the one hand, Radiofrequency technology involves the use of electronic fields to store data in the form of tags. The tags scanned during a transaction results in payments. Similarly, Near field communication technique makes use of magnetic fields to bring in an end to end transaction connectivity. Some of the key contactless payment providers include Wirecard, SecureKey Technologies, Tyfone, Dynamics, etc.
Advantages of Contactless card payments
- It brings in fast payment transaction and settlement. Also, NFC avoids the waiting time associated with contact card payments.
- Due to the inbuilt data encryption, there is an added level of security.
- It brings in the room for prospective innovation.
Disadvantages of Contactless card payments
- The cards are propense malware attacks. So, this brings in a security risk.
- Being an advanced payment mode, the payment option is costly which everyone cannot afford.
- Since it is an advanced technology, very few merchants use this technology.
3. Digital payment using Payment Cards
This digital payment mode deals with electronic money transfers via cards like debit, credit, smart, etc. Besides,the cards are electronically linked to a customer’s bank accounts. The card authentication takes place with the help
of PIN, CVV, etc. Also, these cards are used at ATMs, POS machines and online payment platforms. The subsequent usage charges are very low.
The technologies associated with the cards are magnetic strip technology, embossing, and smart card technology. In a magnetic strip card, card data stored in the magnetic strip is read by swiping it. In a smart card, hologram and ICs bring about counterfeit prevention.
Advantages of Payment cards
- Easy and convenient transactions by avoiding physical cash. Herein, transactions take place conveniently by using the inbuilt data present in the cards.
- Payment cards have inbuilt payment tracking. With the credit history tracked, it keeps a check on taxation issues.
- Besides, the cards come with offers as incentives for online payments. Hence, this creates a favorable payment environment in the long run.
Disadvantages of Payment cards
- Payment cards create a culture of debt accumulation. For example, with credit card purchases the repayment happens with the added interest rate.
- Also, the increasing debit/credit card frauds compromise with the precious personal data of users.
In a nutshell, choose the payment platform which best suits your business requirements. While Ewallets are common amongst small ecommerce players, a contactless card is the upcoming payment trend. Besides,
debit/credit cards support a variety of customer base. Hence, digital payment modes are fast changing the face of payments across the world.