Unless you are living under a rock, you would know how digital money has been disrupting the current financial world. Digital money is money that lacks any physical presence. They are present just in the form of concepts. However, they hold monetary value.
The concept of digital money was coined in the 1980s, but it took more than two decades to come with the infrastructure to practically implement it. People tried to launch several digital money projects, but all ended up in failure.
After several tries and technological innovations, we finally got our first digital money in the form of debit cards. Every debit card stores money. Are they in physical form? No. this becomes the very first concept of digital money. Apart from the fiat currency in the form of digital money, Cryptocurrency is used worldwide.
Advantages Digital Money Has Over Physical Fiat Currency
Digital money offers several advantages over physical fiat currency. This is why you will find more and more people are shifting towards digital wallets and applications to pay their utility bills and other payments.
Some of the most recognizable features are given below:
1. Lower Transaction Cost
When the world was shifting its focus towards digital money, they were shifting towards a new kind of service. This service was totally different from the traditional financial transactions. In the traditional transaction methods, the whole banking sector used to involve itself. This used to increase service fees.
However, this soon changes with the adoption of digital money. With the digital transaction, people were able to omit out these intermediaries to some extent. This practice helped the user enjoy a low transaction cost.
With the introduction of Cryptocurrencies, the transaction industry was able to offer the lowest transaction fees. This is why people are more comfortable with digital payments.
2. No Chargebacks
When you are using digital money, you reduce the chances of fraudulent activity. Thereby restricting chargebacks. When credit cards became popular, people often used to purchase products from their credit cards.
After using the product, they used to claim for the full chargeback due to the falsified claims. At that time, this practice was uncontrollable to the extent that credit card companies used to add these costs as a part of their business.
However, with the intervention with the new digital money concept and Cryptocurrency transactions, businesses were abv to put a lid on falsified chargebacks.
3. Fast Processing
With physical money involved, one complete transduction process can take days. Sometimes even weeks. The process is further extended when there are international payments. The process is bad enough, but the pain of waiting for weeks to get a hold of your money.
However, with the digital money involved, one complete transaction hardly takes over a couple of minutes. Digital money transactions are performed on centralized and decentralized platforms. These transactions are faster than conventional means of financial transactions.
4. No Inflation
Inflation is a big problem for third world countries where the central government inflates the value of their currencies just to keep their head above the water. We have seen that countries like America have also been affected by inflation.
However, if we use digital money like Cryptocurrency, we can solve the currency from being inflated. We know that Cryptocurrencies are limited in the market. Hence, they can be used to fight inflation. Some experts even believe that Cryptocurrencies can be used as a hedge against inflation. To know more, visit BTC Superstar.
5. Smooth International Payment
We used to think twice before making any payment. Especially international payment. Not only the process used to take weeks, but they also charged a hefty sum of money for offering their services. However, with the digital money in the frame, you can cut costs on many overhead expenses. This practice even gives you more revenue-generating opportunities.
Digital money has certainly changed the financial world for good. It is not a hidden fact that digital money holds an advantage over fiat currencies. We have listed down only a few. Was this list familiar, or you were able to learn something new?