Money and the Payment System
With the introduction of credit cards, the electronic cash began to expand worldwide. Today, there are several types of electronic payment methods are in use widely, however, the cash is still present in the society which shows the importance of cash in the normal routine of life. There are several advantages of using the electronic methods of cash payments such as bitcoins, PayPal and debit cards. The main advantage is that these facilities provide extra security to the user and the cash during the transactions. The improvement in the technology in the society is increasing the level of cashless payments because the payment is easy and quick to make without carrying the cash all the time. Another advantage of the technology is that in the financial institutes such as banks and commodes markets, the consumers can connect their bank accounts and trade from their offices and homes. (Thomas, 2015)
The main disadvantage of electronic payments is that this payment system is not suitable for the large companies when they are making payments or receive payments. For example, if the company is exporting their products, then they will use the traditional ‘letter of credit’ method through banks. Therefore, the transactions of significant amounts are still using the bank checks as the trusted way of transaction. The main disadvantage of using cash as the only method of payments is that it restricts the business options for the businesses and the buyers. For example, if the company is selling cheaper products on the internet, then the buyers who are not aware of electronic payment methods will not buy the products and the website will lose the customers who are willing to buy their products on cash payments. Therefore, it is important to keep both payment methods in the society to maintain and improve the market share. (Thomas, 2015)
Work Cited
Thomas, Daniel. "Epayments: A Guide to the Pros and Cons of Alternatives to Cash - FT.com."
Financial Times. 18 Nov. 2015. Web. 21 Jan. 2016. <http://www.ft.com/cms/s/2/91b5efe2-70bb-11e5-9b9e-690fdae72044.html#axzz3xrnPUtpz>.
