What is a digital transaction?
Digital transactions can be easily understood by the word itself. “Digital means without the need for physical presence, and transaction means buying or selling something.” In other words, it is also widely known as “cashless payments,” i.e., you don’t have to carry the physical cash/money by yourself. So, we will be discussing various things, like the negative and positive sides of digital transactions. Precautions while doing digital transactions, including the fact that “why are digital transactions so popular these days?” Digital transactions are done with the help of any digital gadget or without the need for actual cash (it can be anything like a VISA card, UPI card, etc.).
In simpler words, you don’t have to walk around carrying the physical money/cash, you only need your smartphone to pay for the things that you will buy. Looking toward the history of digital transactions (also known as electronic payments), Western Union announced their first Electronic Fund Transfer (EFT) in 1871. After that, In 1970s, American Express introduced the whole world with first plastic card for the electronic payments.
Before knowing the reason behind the popularity of digital transaction ,let us take a look at the methods of digital transaction:
Methods of digital transaction
- Banking Cards
- BBanks’Pre-paid Cards
- Point of Sale
- Internet Banking
- Mobile Wallets
The reason behind the popularity of digital transactions
The world is rapidly moving toward digitalization. Before digitalization, you had to carry cash for the things that you needed. People barely carry cash on their own anymore. People are being made lazy with the advancement of technology. We, humans, want ease of access in every aspect of our lives. Promoting digital transactions is a very good thing in the 21st century. It will definitely decrease the deforestation that has been done in the name of making currencies. Now everything is getting digitalised. People are getting their payments in digital form, such as in the bank or other platforms. They don’t have to take the cash by themselves and deposit it in the bank.
Now there are too many services in the market that you can digitally make your bank account and do the easy transaction with it. It will be safer for those people who wants social distance in covid. There will be no need to touch terminals or handle cash. Is it faster.more secure, boost revenue, increase productivity and its one of the best opportunities right there for consumer incentive programs.
But what exactly is a digital payment, and what is driving this market boom? A digital payment is defined as a transaction that is entirely electronic, initiated by a mobile device or computer. And does not require the funding mechanism to be presented in a physical setting. When these payment technologies collided with the widespread availability of connected devices. The use of payment wallets and apps fdrectly reached sky. The funding mechanism may be a physical credit or debit card. But it is stored in a digital environment with this technology.
Benifits of Digital Transactions
- FIrst of all, its environment friendly.
- It will totally eradicate the money theft as some type of password is needed to complete your transaction.
- Some risk of diseases like covid can be protected because physical cash is not used.
- Buyers can use digital payments to make payments directly from their bank accounts.
- Merchants can sell to customers in other countries using digital payments, and customers can pay in foreign currencies.
- Every transaction is tracked and kept in a digital record.
- There’s no need to be concerned about losing money or obtaining fake money.
- Payments can be collected remotely by merchants.
- Cashbacks or reward points are available with digital payments.
Every thing has its negative side. In the same way, Digital Transaction has also its dark side :
Negative Side of Digital Transaction
When looking at its negative side, digital transaction is not always safe. When you have the money in your own, you will know if it is lost or not and if by any chance if you lose your money you will lose only the amount that you have carried. On the other hand, if someone will gain access to your mobile/Payment cards, they will fully exploit it and you will be losing all your money and in some case it is totally untraceable.
There is a very high craze for cryptocurrencies in the market even tho it is not legalized to use and trade cryptocurrencies like Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH) and so on. Nowadays, the value of cryptocurrencies is drastically falling, and many people are facing a loss of a very huge amount. If you are using the payment method of a digital transaction, there are also chances of getting your money stolen by hackers. So, you must be very aware of these things while doing digital transactions.
If you are using digital payments, always keep a distance from fake sites. Be sure to verify where you are putting your login details. Do not share your OTP (One-Time Password) with anyone. Even after following all the safety protocols, there is no 100% guarantee that you are 100% safe, but you can get your money back thru the legal process. So, always be aware of these things while performing a digital transaction.