Why are payment systems developing by leaps and bounds?

2017-04-24 00:00:00:

Electronic currency has long been a part of a rapidly developing society. Only according to official statistics, every third Russian is a client of one or another payment system. We can safely say that the development of electronic money has entered an active phase, while this trend is visible not within one country, but throughout the world.

On the basis of numerous studies, in the near future, the population of developed countries will be able to completely abandon paper money, focusing on payment for goods and services using bank cards. This, according to experts, is the first significant step in the process of adopting electronic currency as the main instrument for payment.

Realizing the current situation, important questions arise: what are the prospects for the development of electronic money? What methods will be used to protect such a system, because real money can only be stolen through physical pressure, what about virtual currency? Who should ensure the security of the circulation of electronic currency in the world?

Full-scale development of electronic money: benefits for ordinary people

Whoever says anything, it is much more convenient to pay for purchases using electronic currency. You do not need to carry a wallet with a bunch of paper money; it is enough to have a bank card, or a virtual wallet in one of the electronic payment systems. Moreover, the development of electronic money in Russia has already reached such a scale that it is more profitable, safer and more convenient to use virtual currency than fiduciary money.

Although, it is worth making some distinction, since electronic currency today is presented in several forms: bank plastic cards, electronic wallets and digital currency. If everything is more or less clear with bank cards, they have already reached the peak of their development, continuing to improve the existing systems, then electronic payment services have just begun their way of recognition, despite the fact that some of them have been operating for more than 10 years.

Also, the development of electronic money was provoked by an increase in the number of Internet users. If we take WebMoney, the largest payment system in Russia, then the correlation of its development fully coincides with the emergence and popularization of online stores. Yes, many are already accustomed to online shopping, but do not forget that such an opportunity appeared only 7-10 years ago. Before that, trade was physical - I came to the store, chose the product, paid for the purchase.

Today, a completely different picture is observed in the development of trade relations, since to order any product, it is enough to go to the website of the online store, make a choice and confirm the application by paying for the order through WebMoney, Qiwi or Yandex.Money. Of course, there are also problems in the development of electronic money, but they are insignificant and do not affect the overall picture.

What advantages will humanity gain if electronic money becomes the main payment instrument:

Contactless payment for goods and services. In principle, in America and European countries, payment for goods using bank cards is already considered the norm. Moreover, the European Union intends to abandon 500 euro bills, which will also affect the development of electronic money circulation.
Security of financial transactions. Electronic payment systems have a fairly high level of protection, ensuring security for their customers. The development of electronic money has provoked the emergence of additional security measures, including a system for confirming a transaction using a mobile phone. If you can steal money from a bank card if you know the card number and password, then with payment systems everything is more complicated. In addition to obtaining basic information, the fraudster also needs to gain access to the mobile phone number, which is indicated when registering in the system. Such a security system reduces the likelihood that someone else will gain access to the virtual storage and be able to withdraw electronic money.
Convenience. The stages of development of electronic money involve the introduction of new opportunities for working with electronic currency. For example, ten years ago, the capabilities of electronic payment systems were very limited. The infrastructure for the circulation of electronic currency has not yet been created, and the conditions for working with them, but today the situation has changed dramatically, as has the number of customers of electronic payment services. Thanks to innovative technologies and the right development policy, electronic currency has become a part of society. There is a huge network of terminals, new ways of circulating electronic currency have been developed, all conditions have been created to make it easy to use virtual money.
Also, the development of electronic money in Russia prompted the world famous payment systems MasterCard and Visa to pay attention to the domestic market. As a result, today each electronic payment system offers its customers to get a branded card, the capabilities of which do not differ from conventional counterparts. The only difference between the card is that it is fully linked to an electronic wallet. By the way, some payment systems can issue a card to a user living in another country. For example, systems such as PayPal and Payeer, which operate primarily in the US market, offer their cards to citizens of over 200 countries.
Many financial experts are confident that the prospects for the development of electronic money are quite promising. Large banks are actively developing their electronic services, which fundamentally changes the structure of the financial system. It is quite possible that in the near future we will see the complete disappearance of paper money, which will be replaced by electronic currency. Another question is what instruments will be used for the circulation of electronic currency. According to financiers, bank cards are only the first step, further the electronic wallet will be tied directly to the person. The recent announcement by representatives of the Central Bank of Great Britain that they are developing systems that will allow you to pay for goods, confirming the transaction with your fingerprint, makes you think about the prospects for the development of electronic money and the future of electronic commerce.

Development stages and prospects of electronic money

To understand how e-commerce has reached todays scale, it is necessary to consider the stages of development of e-currency. How it was:

It is believed that electronic currency originated from the use of credit and merchandise stamps in the 1960s. It is this period that is considered a transitional one, since the bank cartels developed a system of cashless payment for goods. Checks were used as the equivalent of the bank balance.
The next stage in the development of electronic money falls on the period of the early 90s. At that time, technical possibilities for the use of cards appeared, making it possible to popularize banking instruments, developing new currency exchange systems. It is noteworthy that at that time, electronic payment systems were not yet ready to replace fiduciary money, since the level of technology development remained at a low level. The current situation is fundamentally different, since the level of technical equipment and variability of software can create certain conditions for the development of electronic payment systems. Of course, there are also problems in the development of electronic money, for example, the same security of virtual storage, but programmers work hard, constantly improving the level of protection.
The period since the beginning of 2000 is notable for the emergence of Internet money, which is used mainly on the Internet. Payment services that ensure the circulation of electronic currency are actively developing and improving their systems.
The next stage in the development of electronic money began in 2009, when the worlds first digital currency, called Bitcoin, appeared. Many financial experts are confident that crypto coins have already made a financial revolution, the consequences of which we will see in the foreseeable future.
It is interesting that the development of electronic money in Russia began quite recently. While the Western world has been using e-currency for 20 years, the growth in popularity of virtual money in Russia has been observed over the last 5-7 years.

Reasons for the popularity of electronic money

The evolution of financial instruments, like systems, is obvious. Todays e-currency hysteria is easy to explain. Consider the reasons for the growing popularity of electronic money:

Its profitable. The fact remains that electronic financial transactions are cheaper than those carried out by banks. Although recently, there has been a large-scale decrease in fees for transfers, since banking structures are well aware of the essence and mechanisms of competition. Despite the remaining problems in the development of electronic money, payment systems compete with physical banking institutions.
Its comfortable. The user does not need to visit the bank, stand in line to pay utility bills, for example. Electronic payment systems allow you to perform such actions without leaving your home. All you need is a computer and internet connection. The same story with the purchase of goods. It is enough to go to the online store, select the product you like, pay for it, and the courier will deliver it to your home by himself.
Its safe. It has already been mentioned that the level of security of payment systems is an order of magnitude higher, and for an ordinary user this issue is extremely important, because the choice is obvious.
If we consider the stages of development of electronic money, and the current situation, then we can make a certain forecast. No one doubts that electronic currency will become the main payment instrument, the only question is how long it will take. The money we are used to will disappear, as will the physical banking structures, this is inevitable.