Physical currency has been around since time immemorial. Our technology is shifting nearly every aspect of the way we do business, including the use of cash, a traditional payment method. Cash might always have a place in the world’s economy, and it is highly unlikely that cash will no longer be used in the near future. However, not the cash payment transactions do involve a level of imperfection when it comes to calculation. Not all people have the exact amount to pay for a purchase. Many even overestimate how much money they should carry to prevent falling short of the amount. Then, there are those coins that are not accounted for, and those bills that end up being hidden and forgotten.
Accurate payment transactions
Alternatively, why a person makes an online payment, it allows them to keep the change each time. Such accurate payment transactions instead of making a cash payment that is rounded off can even aid in saving those pennies and cents, which add up, especially when making payment transactions frequently. Our digital payment options, such as peer-to-peer mobile apps, digital wallets, and in-app purchases, facilitate the needed accuracy when making a payment transaction.
Because of the speed and increased efficiency, security by tracking and increasing accountability, and transparency, digital payments reduce theft and corruption. Individuals, international organizations, companies, and governments get to waste resources and time when using inefficient cash payments. When making a digital payment transaction, it decreases the overall cost while ensuring that it is done quickly and with efficiency.
There are advanced payment solutions that allow more people to access a broader range of financial services to include savings accounts. The financial institutions that formed the bedrock of our economy also greatly benefit from financial inclusion, transparency, and cost-savings.
There are more than one and a half billion people all over the globe that are still unable to be part of the financial system. Since this is the case, it is difficult for poor people to have savings, provide for health and education, or make a business investment. The only way to send or receive payments for many people worldwide is to use paper money that is a barrier for them using digitized financial services. One example is how much cost saving a country like Mexico made when they centralized and digitized payment transactions. The cost of distributing social welfare, pension, and wages experienced a drop of over three percent, which amounts to over 1.2 billion US dollars.
Disadvantages using cash
These cash-based transactions lack transparency, are inefficient, inconvenient, expensive, and unsafe. Accountability and transparency are more challenging to achieve when using cash payments because of the anonymity it provides, making it difficult to trace. On the other hand, digital payments such as online payment methods and mobile payment apps are better than cash because of certain benefits, which include spurring economic growth. When we use the old form of money which is cash, it does take time. Take a step into making our future much better by using digitized money.