Digital payment instruments enable us to pay with ease

Centuries ago, cowrie shells were payment instruments. These seashells were used in the same way as money and are considered as money. Nowadays, a seashell might seem worthless as it cannot be used to buy anything in the marketplace but may be used for bartering. Money has evolved through time for us to be able to use the internet and get to pay with ease.


Physical payment instruments 

Money has taken on different physical forms. Such payment instruments include that of ancient coinage. Our concept of money has been integrated into us through use since the time we could understand that it is something physical. This is one of the challenges experienced by the digital cash world, as there are still millions of people who have not made the shift from cash to the new payment instruments that are used by those in developed countries.

Cash as a payment instrument

The payment instruments that developed countries commonly use nowadays include cash, credit cards, debit cards, and e-wallets. Banknotes and coins which are what we now say to be cash is a stand-alone payment instrument and does not have to be linked to any account. We can own a bank account that has funds in it and use an e-banking app to make a payment transaction. But, when we are making a payment transaction using cash, there is no need to use anything else. The drawback of making a cash payment transaction is that we have to be physically there to hand over the cash or deposit it into an ATM. 

Making an online payment 

When we make an online payment, all we need is our mobile device or a PC and a connection to the internet The online payment world gives us a lot of opportunities to create accounts with non-traditional payment instruments. We can use an e-wallet or even cryptocurrency like Bitcoin to make a payment. To be able to create such accounts easily online is an advantage as it opens up new horizons to those who need financial inclusion, not just because of bad credit but because they do not own bank accounts. Being able to own an e-wallet can provide the account holder with other opportunities. E-wallets store, send, and receive funds yet there are those that will provide short-term loans to account holders. 

Acceptance of digital money

When we think about money, it is something that we can hold. However, this is quickly changing as acceptance of digital money is happening at a faster rate due to the pandemic. Millions of people were pushed by the need to be able to get their supplies such as groceries from online shopping sites so that it can be delivered to their homes due to the stay-in-shelter orders. To be able to order from shopping sites, a consumer typically has to use one of the available payment methods. Cash on delivery is possible but more often than not, shopping site orders require that an online payment be made. This is one of the reasons why there have been more mobile payment transactions in the year 2020.