Last week, I met one of my schoolmates in a restaurant after a very long time. As we both had some time, we started chatting on a wide range of topics like family, job, health, finance, etc. Of all the topics we discussed, the most interesting one was about payments. He explained beautifully on how the payment system works currently, how it worked in the past and what will happen in the future. Given below is the summary of his lecture.
Payment is an integral part of our life. Without that, you can't buy any product service that is essential for your living. With the advent of technology, the payment system has also gone through a lot of changes from cash to wallets as given below:
Cash: It is the oldest and simplest form of payment that is accepted anywhere in the world. Only thing is you should use the relevant currency based on the country in which you live. Also, you don't need any kind of qualification or technical knowledge to make a transaction using cash.
Cheque: It is the safest option to make high-value transactions. But, the processing time is slow as it takes 1-3 days for the clearance of the cheque and to get credit to the account. This kind of payment is less popular these days and slowly becoming obsolete.
Debit cards: Debit card was the first cashless payment system used for POS / online transactions. Before swiping the card, you need to make sure that there is sufficient balance in your bank account for making the transaction.
Net banking: Even though it is safe and easy to use, it is not preferred by many online shopping websites. Net banking can be used only for making online transactions.
PayPal/Skrill - This form of payment is best for buying products/services from international sellers. Even though this kind of payment is fast and secure, it involves a processing fee for every transaction.
Credit cards - It is the widely used and most popular payment method as it allows you to buy anything you want very easily without the need for any money in your bank account. The only drawback of using credit cards is the high processing fee for both merchants and buyers.
Wallets - This option is getting more popular as many shopping retailers have their own wallets so that the buyers can easily add money to them and do the shopping. No need to use any credit/debit card.
The biggest challenge in the existing system is that you cannot use any payment for buying anything anywhere. For example, you cannot use an Amazon wallet to buy items from eBay. If you relocate to another country, you need to open a new PayPal account in that country. So, what we need a system that can be used for making any type of payment anywhere. To achieve this goal, PumaPay, a free billing protocol that will use cryptocurrencies for payments is under development. As Cryptocurrencies are independent of the location, it is an ideal option for making payments. PumaPay protocol supports a variety of payments like the ones given below:
- One time payment
- Shared payment
- Restricted payment
- Pay-per-use payment
To learn more information about the PumaPay protocol, please visit:
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