Digital payments are any type of payments that do not involve cash or a paper check. Currently there are 6 common forms of digital payments, however, new types continue to be developed continuously. Payments can be broken down into the following:
o Credit and Debit Cards
o Internet
o Mobile Payments
o Financial Service Kiosks
o Electronic Payment Network
o Person-to-Person (P2P) Payments
The most common form of digital payment are credit, debit and prepaid cards. These cards have a magnetic strip that the retailer swipes through the terminal. The retailer transmits the data to their bank. The bank then transmits the data to a card association who makes a decision on the transaction and relays it back to the retailer. As of March 2013, there is a combination of 510.5 million US consumers using MasterCard, American Express and Visa credit cards (Ray.Ghahremani).
Internet payments involve transferring money or making purchases online. Consumers and businesses can transfer money to third parties from the bank or other accounts. Purchases can also be made using credit, debit or prepaid cards. 73.5% of U.S. consumers now use online bill payment. This confirms that online bill payment is now the dominant way we pay bills in the U.S (McPearson).
Mobile Payments allow consumers to use their mobile phone to pay for goods and services. There are six different common types of mobile payments: Standard Messaging Service (SMS)/ Unstructured Supplementary Service Data (USSD), Wireless Application Protocol (WAP)/Mobile Web, Near Field Communication (NFC), Mobile Wallet, Mobile as the POS and Closed Loop Mobile Payments. Mobile payments have more than doubled in popularity, reaching over 33% of U.S. consumers (McPearson). As with everything in the computer world today this is a growing area and other types are being developed continuously.
Financial Service Kiosk are fixed stations that have a phone connections where the customer uses a keyboard and monitor to access information and make transactions. These kiosk are usually located in convenient public places and allow easy access to consumers who do not have access to the internet or mobile phones.
Electronic Payment Network handles numerous types of credit and debit transfers, such as payroll payments, dividends, loan payments and insurance premiums. The Automated Clearing House (ACH) system is the only one to serve the private sector in the U.S..
Person-to-Person (P2P) Payments allow a consumer to pay another using an account, a prepaid card or another source of funds. These are online services that you send or receive money from virtually anyone with an e-mail address who's enrolled in the service. The most common in the U.S. is PayPal.
I enjoy using electronic payments myself, but I always wondered if at some point in the future if cash/coins would become obsolete. The cost to make tangible cash is so expensive. I heard it cost more to make the penny than the penny is worth.
ReplyDeleteYears ago someone told me that one day we would be a cashless society. I thought they had lost their mind. Know I can buy a soda for a machine with my credit card. It is an ever changing world. You are correct that in this country we spend a lot of money making money. We spend even more money trying to track down the fraudulent currency. I do believe that one day we could become a cashless society.
DeleteWith our ever expanding knowledge of computers and gadgets out come the people looking to get something for nothing. There are many people who are concerned with digital payment security. This is a topic that our blog will cover in detail in the near future. The magnetic strip on our credit cards can be easy to read and unsafe around some people. Some credit cards now have chips in them for even easier scanning. You just hold the credit card up the a screen and go.
ReplyDeleteI love Paypal. I use it quite often. I think it is a great way to securely shop in the global marketplace. Ebay has made it even easier to use Paypal; by linking your Ebay account with your Paypal account, you no longer have to login to Paypal to pay for your purchases.
ReplyDeleteI agree I use Paypal all the time. It so easy to just login and click one button and Paypal fills in all the shipping and payment information for you.
DeleteI think digital payments are the best way to process a transaction. I use mobile banking, PayPal and other on-line payment options available to shop on the internet, for example. It really amazes me that I haven't used physical bills to purchase a good or a service in almost 3 years. Since then, all I use is some type of digital payment method that allows me to process a significant purchase with the security and convenience of doing it from, literally, anywhere in the world.
ReplyDeleteI save a bundle of time and money since I started using online bill pay. I can enter all my bills the same day and choose when I want them sent out. No more trips to the post office and buying stamps. I save $0.44 every time I pay a bill now. And now a days every little cent helps!!
DeleteI like to pay my bills online because I can actually see the payment being posted to my account, along with a confirmation number. In the past, I have experienced my payments being delayed in processing or getting lost in the mail. As an employee in the Payroll Dept. at UNCC, I have to inform our employees that direct deposit is mandatory. We have significantly reduced the costs of generating physical paychecks and the manpower to distribute them. It also benefits the employee by funds being available at midnight of the payday. The continuous debate we face is: "Is it ethical or legal to require all employees to have an active bank account for direct deposit?"
ReplyDeleteI thought a lot about your post. I believe that as long as potential employees are notified of job requirements prior to accepting employment then direct deposit mandates are no different than dress codes standards. If you tell a potential employee that they have to wear a uniform to work that's ethical and legal. So it's no different than telling that same employee they must accept direct deposit in order to work at UNCC.
DeleteThe digital payments have, from my point of view, more advantages that disadvantages. For example, they help you to save a lot of time because you do not have to wait in large lines and do not have to incur in cost and transportation times. Also nowadays, the process for making such payments is more organized than before, so now is less probable that your payment get lost in the system, since you immediately receive an email indicating your account information and your order detail where you can find the total amount that you have paid, the day and hour of your transaction and the order ID. I think that other advantage is that your payment is instantly reflected because it is processed very fast. For that reasons I think that today almost all the companies have an online store and offer the option to make a digital payment because is easier and more comfortable for the customers to buy or pay what they want at the moment that they want.
ReplyDeleteThe only disadvantage is that you do not know how safe is to enter your account information on the Internet.
It is true that many people are concerned with the security of entering their personal information into an online site. We will focus on how companies are increasing security to combat these concerns in a future blog.
DeleteOnline Payment is great. I used it for everything i can use it for. I am just hoping that they develop a system where i can buy items in paris and the amount gets automatically calculated when I get ready to check out. Great Blog by way. I have learned a lot.
ReplyDelete