Most of us have a mobile phone that is capable of downloading a payment app. For the convenience and out of necessity to make it much easier for us to do financial transactions, we download an e-banking application and perhaps, and e-wallet. We might also get another account for retail store transaction that makes us earn rewards and loyalty points.
Payment instruments
Many of us are not aware that we are using different payment instruments, such as that of loyalty points, to make a payment transaction. The way we pay differs nowadays because we have the option to make an online payment. What also varies is the payment instrument that we use. When just a few decades ago, the only payment instrument that was acceptable was cash, and there have been many changes since then.Â
Cash and credit cards
Due to the banking industry in the US pursuing the goal to make transactions get done by using electronic means, the first ATM was invested. It was a good thing as it was able to make electronic banking available to us. When the payment instrument of credit cards got launched, there was a requirement to link any payment transaction electronically to the credit card processor. The way we make payment transactions and other financial transactions got changed by the advancement in electronic banking.
Online payments
Since then, there has been the appearance of other payment instruments aside from cash, checks, and credit cards. A few of these payment instruments are digital in nature, such as loyalty points and cryptocurrency. There is also digital cash that makes it a lot easier to make an international payment transaction in a few minutes.
Advanced payment solutions
Since these digital payment instruments can be debited to the recipient’s account with the speed of an SMS, it became more popular than using the traditional bank fund transfer. Just a couple of decades ago, we had limited choices on how to send funds internationally. To use the bank funds transfer via the SWIFT network meant that the transaction will take around 3 to 5 working days to be completed. Now, in a minute or so, one can get their remittance when using the right payment app. There was also another popular way to transfer funds via money transfer agents. These transfers were swift but one has to physically go to a branch to send fund and the recipient has to go to a money transfer agent branch to cash out the remittance.
Streamlining the process
The advantage that we have nowadays is that financial networks are connected. It makes our payment apps become multi-functional because of the tie-ups with the traditional financial institutions and some of the advanced payment solutions. Since we need to organize our financial transactions, it is a good idea to have one centralized payment app that can function for sending funds from our banks, for international wire transfers, and also work as an e-wallet. If you get to download the right app of a reliable payment provider, you can get to organize your fund transfers from a centralized location.