The cash comes to be the accountant and sonante, in currency or paper or banknote, legal tender, in our pocket, wallet or purse, which we have at the moment to make purchases or payments of goods and services in cash. In economics, cash means liquidity, in addition to other forms of possession and representation for its economic value. Likewise, it is considered as any exchange mechanism, which is generally accepted for the payment of goods and services and debts.
Uses of cash
The use of cash as a means of commercial exchange and value measurement is that they make the exchange of goods and services and the specialization of production easy. Without cash, trade becomes barter or direct changes from one good to another. That was the primitive method of trading many years ago, however, it is still used in some societies with serious economic problems.
Functions of money
The functions that money must perform are the following. Means of exchange: It is the means through which goods of any kind can be acquired and also serves as a means of payment for services. Accounting unit: You can make subdivisions, as much as necessary, in order to make accounting records and represent the value of the items.
It serves as deposits of value and standard of delayed payments, meaning that it gives the opportunity to conserve the purchasing power and thus be able to meet the current and future needs of its users. A standard of deferred or delayed payments, makes it possible to accept, instead of money as such, to reach agreements or contracts, in order to deliver certain specific amounts of money to be transferred at a future date.
Also called contactless payments, and they have become a true global trend in the area of electronic payments. In Latin America, the adoption of this type of payment has been very slow and therefore still looks far from being an ideal payment mechanism. Cash, still has 85% of commercial use.
It is interesting to see how consumers themselves, who are the ones who use cash, are interested in implementing this means of payment in electronic commerce. In fact, online transactions have experienced a 2.5% increase faster than the same physical stores in Latin America, indicating that consumers prefer to make some clicks, from the comfort of their home, to having to move to stores Physical to make your purchases. However, when cash is still the dominant means of commercial exchange, it is difficult to talk about the online shopping experience optimally.
Digital payments in Latin America are evolving
This type of payment is experiencing a constant evolution in Latin America, thanks to the increasing banking of people and the increase in the use of Smartphone, which have become an alternative to make purchases in the region through this medium of digital payment.
Emergence of technology
Thanks to the emergence of innovative technology, it has generated important changes in consumer behavior, and hence the digital payment industry in Latin America, has also experienced a very interesting exponential increase that will slow down in the coming years. Those transactions that do not use cash have increased in recent years and a growth of 7.2% per year is expected as the year 2020 approaches.
Difference between cash payment versus digital payment
Cash is cash and money, it is in your pocket and you have it immediately and without an intermediary, it is the same as currency or bills. It is the most expeditious classic and popular means of payment, and perhaps, the first means of payment to exist in business. We could say that some disadvantage is that most people do not have large amounts of cash, therefore they choose to pay with credit or debit cards.
There are already several electronic payment methods, such as PayPal or Stripe, they have become the most popular and favorite payment methods among FreeLancer, online sellers and entrepreneurs. They are also simple and immediate means of payment. Another benefit is that it is a universal means of payment, no matter where you are going to pay and in the type of currency to be used, and most importantly, they are fast, almost like cash. And if we talk about a disadvantage, it could be because of the commissions that in some cases are a bit high, with a few exceptions.
What do you think about this topic? Did you know the use of digital payments in Latin America?
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