Digital payments: what are they and which are the most used?
Today, digital payments, i.e. payment methods that are made over the Internet, are increasingly present, relegating cash to second place in many cases.
The digitalization of payments has revolutionized everything from the way we buy products and services to the way we share expenses with friends. Security, speed, and convenience are some of the many advantages that have made the virtual world an increasingly popular payment option. Nowadays, digital payments, i.e. payment methods made through the Internet, are increasingly present, relegating cash to second place in many cases. Digital payments will prevail over cash. Thus, the virtual world is fast becoming the favorite scenario for everyday transactions, especially in the retail sector. The most commonly used payment methods available are the following.
Credit or debit card
Its global use makes this method of payment one of the most popular, and it is also one of the ones that have been in operation the longest. It is a physical card that is inserted into a payment terminal and allows a certain amount of money to be paid. Many of them incorporate NFC technology, which allows them to carry out this same process without the card touching the classic point-of-sale terminal (POS); this is known as contactless payment. In recent years, they have also become available in their virtual version, through apps from both banks and other platforms such as Apple or Samsung wallets. In addition, these "virtual wallets" can be connected to other smart devices such as watches to pay with them.
Mobile payments
Although there are other devices such as bracelets or smartwatches, smartphones are the favorite option for millions of people around the world to make payments. On them, we can use the online banking services of our bank, through which, if we have NFC technology, we can make our purchases through our virtual credit or debit cards; or scan the QR code provided by an establishment. It is also possible to send money with digital services. With the latter, for example, it is possible to pay in electronic stores that have this payment method. We will only need to enter our cell phone number and authorize the transaction using the mobile banking app or the key.
QR Code Payments
It is a fast, convenient, and secure digital payment alternative. To use it, we have to open the app of our bank and scan the code provided by the merchant. Once we have done so, we can select the digital payment method we want and confirm the transaction.
Super apps
These are applications that, among the functionalities they include, are payment methods. For example, through them, we can reserve a certain item in an establishment and, when we go to pick it up, show from the application our membership card to accumulate points or a QR code to pay when the staff scans it.
Online payments
In Europe, the number of users joining digital payment methods has increased, and, consequently, legislation has been strengthened through the approval of PSD2, a regulation aimed at increasing security in payments on the continent. The African continent is also experiencing unprecedented progress in terms of telephone payments, becoming the global epicenter of these, with more than 450 million users.
In Latin America, the popularity of payments via QR codes and contactless technology is increasing, and the progress in banking digitalization continues. According to the study "Digital banking in Latin America: best practices and the shift towards banking as a service" conducted by Americas Market Intelligence (AMI), more than half of all banking transactions in markets such as Brazil are already made online.
Meanwhile, in Asia, mobile payment applications that allow paying bills or purchases in establishments, as well as discovering the latest news and interacting with other users of the platforms, are gaining more and more followers. According to Statista, already in 2018, 47% of Asian internet users made mobile payments compared to 30% of Europeans.
