One of the digital economy‘s key elements is the electronic payment system. In recent years, there has been a noticeable transformation in how payments are processed. We now have more options than ever before, and payments are quicker and more flexible than ever. Innovative technologies have introduced new business paradigms worldwide. The way people spend their money has changed due to digital payments. The financial services industry has rapidly made significant technological advancements, and as a result, this industry has significantly expanded.
Modalities for digital payments
- Card payment: The most used electronic payment method worldwide is card payment. These cards are provided to customers by financial institutions to enable them to make online payments.
- Banker’s bonus: There are several ways to transfer money from one bank to another, but today’s banking customers prefer to transfer money digitally.
- E-Wallet: In the future, e-Wallets will take over control of the payment system. These portlets contain information from the customer’s debit or credit cards on mobile devices. These ports can be used by smartphone users for in-app or online transactions as well as by customers using NFC-enabled payment terminals in stores.
Vantage points for digital payments
Saves time and is cost-effective
The transactions are less expensive than physical transactions, and a significant amount of time can be saved by carrying out digital transactions.
Digital payment transfers are carried out through efficient, secure, and cryptographed financial networks. In the event of fraud or cyberattacks, one may lock their accounts or digital cards.
Transparency in transactions is crucial, all transactions can be efficiently captured and archived with digital payments. The governments can also keep track of transactions that might help them catch any potential tax evasion.
Automated transfer operations
The transaction happens automatically without the involvement of bank employees; all credit cards are read and verified automatically by payment servers.
Security measures you need to take when using Digital Payments
Despite the many advantages, digital payments also carry the risk of data breaches and other security risks. Consumers must therefore take additional precautions to protect themselves.
A simple security measure that any consumer can take while using an online payment method is to check if the payment page is https based (that is, it uses SSL to encrypt the transaction). This can be done immediately by checking the start of the payment page URL or web address, which should show “https://” or a lock icon.
With the rise of hacking attacks, consumers should enable SMS-based two-factor authentication to protect account acquisitions that can lead to payment fraud. Even if a user’s original password is leaked or stolen, only the user receives the disposable password via SMS required to access a digital payment app or site. This measure protects accounts against unauthorized access.
It’s very important to send only the absolute minimum of personal information. If overly invasive and unnecessary details are requested, think twice. Financial risk is generally covered by banks or other financial institutions, but protection from identity theft is left to the individual.
As digital payments become mainstream, it is also important to use reliable apps. Also, consider enabling transaction notifications and security features. There are cases where people opt for comfort rather than security and end up paying a high price.