Taking the world by storm, digital-payments are currently the most valuable kind of payments in the world at the moment. It seeks to do away with the need to carry cash or credit cards around. Being a digital or virtual currency, digital-payments can be used to make fast and easy online transactions. Since its inception, this digital-payment has been used to facilitate online payments. Surprisingly, a number of online merchants have adopted this digital-payment as a means of payment for products and services bought in their stores.
The underlying technology of this digital-payment the blockchain technology will be used to record these transactions. While an increasing number of people are currently using digital-payments to make online transactions, there are certain benefits and disadvantages you should know about before trying this out.
Benefits Of Using Digital-Payments For Online Transactions
There are a couple of benefits that come with using this digital-payment for online transactions, in this section of this piece we’ll take a look at them.
- Reduced Transaction Cost; when compared to the amount most payment platforms charge, using digital-payment to make online transactions is cheaper. Ordinarily, for most financial institutions, carrying out transactions (especially foreign ones) will require checks from third parties. This increases the cost of processing the transaction. The digital-payment network is a decentralized platform with no third party. Lack of a third-party contributes to a fairer and cheaper transaction fee.
- Faster Transaction Speed; most financial institutions take a couple of days before processing international transactions. This is because it would have to pass through various departments. These departments will verify if the transaction should be made or not. This does not increase the cost of processing these transactions, it also increases the amount of time it would take. Making online transactions with digital-payments will only take a couple of minutes to complete.
- Ease Of Transfer; unlike these financial institutions that will require users to present various documents before their transactions are processed, digital-payments offers ease of use. With a computer or a smartphone and internet connection, you can conveniently send funds to your loved ones wherever they are from the comfort of your home. All you’ll need to do is download a Digital-payment wallet, sign up, fund your wallet account, and begin making these transactions.
Disadvantages Of Using Digital-Payments For Online Transactions
Since we have mentioned a couple of benefits, there are also disadvantages attached to the use of this digital-payment. They include;
- Transactions cannot be reversed; while most people may argue that this is an advantage or benefit, they will find it surprising to know that it could also be a major disadvantage as well. Humans are imperfect and are abound to make mistakes even when it comes to how we handle our finances. For any reason whatsoever, most people may send either more of what they originally had in mind to send or would send funds to a wrong wallet address. In situations like this, the user loses his funds since the transaction cannot be reversed. Financial institutions, on the other hand, offer users the opportunity to reverse or cancel transactions that have been made.
- Volatile nature of Digital-Payment; being a volatile currency, digital-payments do not have a fixed price. When making online transactions, users will need to know how much is leaving their account. With digital-payment, this is not certain. The amount of 1 digital-payment may rise in split seconds, meaning that the sender will send more than what he should originally have sent.
Digital-Payment has proven to be one of the best payment methods in the world. However, there is a need for improvement as an increasing number of digital-payment platforms are being launched daily.