Payment methods have developed throughout the years. While the most common payment method has always been cash, the reality has changed within the last time. Cash has dominated the market for ages, and now when the era of technological progress has shown up and many statements have been changed, cash does not really lead the market anymore.
The introduction of payment methods has almost never been easy. It is a fact that people refuse to take and admit changes straight away, because of being used to some older stuff and patterns. With the first-ever introduction to credit cards, people did not really use them, some people even made some conspiracies, telling that banking and governmental sectors want to track our personal information and control us via cards. Of course, this kind of blames and concerns changes and lifts away, but it required a certain time for that.
Now, that different payment methods have been introduced and are actively used by people all over the world, cash is usually the last option to address, or only if used in specific cases. Otherwise, credit cards have overtaken the market. Especially now, when due to the pandemic the health experts said that using cash carries more risks because of the extremely contagious nature of the virus, cards have become the major payment methods, together with online transactions.
Even considering the fact that millions of people use cards as payment methods, in some remote regions and places, there is a low card penetration statistic. This is usually characterized by less developed and less touristic places, where people still prefer the traditional way of payment.
Plastic cards VS Cash
There are several main priorities and advantages of the card over cash, which has apparently become one of the biggest reasons for people to switch from papers to plastic. The credit card can only be used by you personally, and you never have to carry a lot of money with you, while you can have as much money as you want on your bank account. Moreover, there is never the necessity to have the change for the money, as you can always pay for your bill or transfer with every single cent.
It is known statistics that in the US up to 25% of the whole population is under or overbanked. Even though people might have a bank account, they are accustomed to using cash or even cheques, rather than paying with the card online. This is determined by mostly the security and safety measures, which we carry about. Usually providing your personal card information online can contain risks of the disclosure of the information, but it is not necessary to happen in your case. Moreover, the banks have already introduced additional security measures in order to avoid fraud and hackers. You simply receive a verification email or SMS whenever your card is processing an online payment or transaction. Only after the approval, you get a chance to complete payment. This way, the safety of the card has been increased.
New payment methods
Just like around 20 years ago, credit and debit cards were news to everyone and it was a drastic change to most of the people all around the world, the new generation of tech development has brought completely different payment methods which is an online transaction and online banking.
This system is fully digitalized, and you may not even have the physical card in order to have your own online account. Though, you can proceed with the online transactions with a simple click and can even save your money on your online account. The greatest examples can be PayPal and Payoneer due to their added features. Those two are the most common online transaction methods, which are basically your online banking rooms.
Many industries and millions of people all over the world have been using online payment methods. First of all, it is safe, and only you have access to your account unless you share the account credentials with anyone else, plus there is no risk that your card will be stolen and someone will withdraw the money from the ATM because you simply do not have any card with you.
Cryptocurrencies
Cryptos are the most popular assets of our decade, they have already made their history and shall soon become one of the main payment methods in many places. The crypto boom was a decade ago, right when many people started investing in different cryptos and have actually benefited a lot from it. The cryptos are extremely popular because the system is decentralized. This means that there are no legal frameworks limiting cryptos in any way. Crypto is similar to the universal currency which can not be controlled and modified easily.
Another perk is the blockchain system, which is the base for the cryptos. So far it is one of the safest systems in the world, which is almost impossible to hack, meaning that your funds should always be safe and sound. The third thing is the anonymity of the transaction. Thanks to the blockchain system all over again, the transaction can be seen, yet can not be identified, which is both the perk as well as cons, in terms of black market trading, but this is a whole new topic.
Other benefits
Generally, a lot of local and alternative payment methods are much more cost-efficient than credit cards or wallets, like PayPal, for the merchant, particularly those who don’t run through credit card networks but deduct the funds directly from the source, such as a bank account. Of course, it has to be taken into account that some of these payment methods bear a higher risk for the merchant and don’t protect them from chargebacks. Thus, thorough and ongoing data collection, monitoring, and interpretation are key for payment optimization.