As time goes on, more services are going digital. Online banking has been around for several years and is only increasing in popularity. As more people turn toward easier ways to deal with money, many digital payment methods have cropped up. There are many types of digital payment options available at this point.
What are Digital Payments?
Digital payments are a type of transaction involving money being paid from one account to another through electronic means. Businesses and individuals alike rely on these payments to both send and receive funds. Some small businesses only rely on digital payments for their goods or services. Digital payments can be made right from a smartphone through an app or the phone’s built-in wallet system. Or you can make a digital payment when you pay for something online.
You can figure out how beneficial digital payments are when you compare online banking vs traditional banking. Instead of physically walking into your bank, you can go online and make your transaction.
Types of Digital Payment Methods
There are several types of digital payment methods available. You probably use at least a few of these every day and don’t even think about them. The different types of digital payment methods include the following:
- Mobile wallet payments: If you have a smartphone, the chances are high that you use Apple Pay, Google Pay, or Samsung Pay, depending on your phone’s platform. These days, many people can simply leave their homes and go shopping without even carrying a physical wallet. You can just pay for your items through a couple of taps or presses at the payment terminal. Many smartwatches also come equipped with mobile wallets.
- Mobile payment service apps: There are many popular mobile payment service apps such as PayPal, Venmo, Zelle, and Cash App that allow you to seamlessly send money to someone else to pay for things.
- Contactless payments: Contactless payments can be made using a wide range of sources. Mobile wallets like Apple Pay, Google Pay, and Samsung Pay all allow people to make payments without having to make contact with a payment terminal. In order to take advantage of this method, you need a smartphone that’s modern enough that it’s equipped with near-field communications or NFC technology. In other words, an older flip phone won’t work for making contactless payments. These options are safer due to not having to take out a credit or debit card and risk having a potential thief peering over your shoulder when you make the payment.
You can also leverage contactless payments using newer credit cards that have RFID technology included. You hold your card over the terminal instead of swiping.
- Social media payments: Many social media networks now allow users to make convenient payments right through their services. You can make purchases or even send money to friends when they need it.
- Crypto payments: Many places now also accept cryptocurrency payments. This is the newest technology for making financial transactions and it’s all done digitally.
- Mobile-point-of-sale: Many small businesses rely on mobile-point-of-sale to earn money. Payments are made through tablets that are set up to accept funds from credit and debit cards through an app and card reader. The tablets serve as mobile cash registers. This is a convenient way for people to conduct business from any location.
Digital Banking: A Better Future
According to the experts at SoFi, digital payment methods are only going to continue expanding in the future. They will probably overtake credit and debit cards as the main option for making payments. It’s also believed that things will go even further in the future with biometric payments being made right from fingerprints.
These digital payment methods offer users great freedom. You can use a few and find the one that suits your needs the best.