HomePersonal FinanceThe Pros & Cons of Different Payment Options in the Modern World

The Pros & Cons of Different Payment Options in the Modern World

There has always been, whether within a capitalist or a communist society, at least some semblance of currency, whether overtly monetary or not.

As soon as the earliest caveman had something the man in the neighboring cave wanted, trading, bartering, and exchanging of materials or foodstuffs was born. Prisoners trade cigarettes for candy, and superstores trade groceries for money, and these days, there are so many different ways to pay for goods and services, all with different pros and cons. Here are the most prominent:

Payment Method

     1. Credit & Debit Cards

By far the most recognized way to pay for goods and services, after good old cash, that is, is through the use of either a debit or credit card, both of which are connected to the individual or company’s bank account, with the money immediately leaving the account once the transaction is made.

All three main types of debit cards (Mastercard, Visa, and Maestro) can be used either online via a secure banking link, a card machine by either contactless or chip and pin, and also over the phone.

Credit and debit cards are widely considered to be the safest way to pay for goods, with the former being advisable to use for larger purchases, such as items of furniture, vacations, or cars.

     2. Cryptocurrencies

Easily the newest and, indeed, most interesting form of payment in the modern world, although a type of payment solution not without its downsides and criticisms, is cryptocurrency.

Essentially, cryptocurrency is a wholly digital payment option that uses a digital technique called cryptography, meaning that any transaction using the system is entirely private between the recipient and the sender.

The advantages of using or investing in cryptocurrency include the following:

  • Advanced protection against inflation
  • A relatively low cost of transaction
  • A high level of privacy (due to no registration requirements, unlike with a bank)
  • An instant transaction from start to finish with no time lag, even between countries
  • Accessibility and the ability for anyone to use it as long as they have an internet connection

Conversely, the primary disadvantages of cryptocurrency are as follows:

  • A substantial lack of official and thorough regulation
  • Logistical problems due to core differences in technology between countries
  • Potential issues with scalability
  • A certain level of volatility in terms of cryptocurrency value

     3. Online Payment Systems

Online payment solutions have revolutionized the way business is conducted, both in the context of a private consumer ordering goods or services and huge amounts of money being transferred within a business to business (B2B) context.

As a business looking to implement an online payment system, there are essentially four basic factors to judging whether or not an online payment gateway is the right choice: the number of transaction fees, the level of customer support, platform compatibility, and security and privacy features.

     4. Healthcare Solutions Payment Cards

For an employer looking to provide an outstanding level of healthcare provision to their employees, Blackhawk Network healthcare benefits are second to none.

Such esteemed and renowned companies afford employees an all-in-one payment card that can be applied to everything from prescription medication and other healthcare supplies to money off groceries and discounts in stores.

      5. BNPL (Buy Now, Pay Later)

For customers who cannot afford the upfront cost of a larger purchase, especially when the item is necessary (such as a washing machine or toaster oven, for example), there is another payment option that is more than a little popular, especially in the current economic climate.

BNPL (buy now, pay later) means a customer enters into an agreement with a company whereby they sign a contract to receive the product or service without having to pay a single cent upfront.

Instead, they are afforded the option of spreading the cost over a number of mutually agreed weeks, months, or, in some cases, years, with BNPL essentially becoming a form of reliable loan.

     6. Cash

Even though technology has overtaken almost every aspect of the average person’s professional and personal life in the modern world, many people still choose to carry cash and pay when they can, with the oldest form of modern currency.

Unfortunately, especially if you are one of those people who, arguably correctly, senses the supreme and far-reaching dangers of ultimately becoming a cashless society, the use of cash in everyday life is becoming less and less common.

There are, undeniably, more than a few serious and potentially restricting concerns associated with the entire eradication of cash, namely the simple fact that if a person switches to only ever using card payments, every single purchase, forevermore, will be tracked.

The sharing of personal data and information is already a huge risk, both in the context of privacy and financial security, so strive to use cash payments as regularly as possible!

Shitanshu Kapadia
Shitanshu Kapadia
Hi, I am Shitanshu founder of moneyexcel.com. I am engaged in blogging & Digital Marketing for 10 years. The purpose of this blog is to share my experience, knowledge and help people in managing money. Please note that the views expressed on this Blog are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment , tax, financial advice or legal opinion. Please consult a qualified financial planner and do your own due diligence before making any investment decision.