In the past, making a payment to a business for a purchase meant you had to be at a store, in person, to hand over cash. As time went by, checks and credit cards came about, but these still had to be processed manually at a bank or financial institution. The Internet changed payments further by allowing people to use credit and debit cards at retailers to instantly pay for products and services with the money being deducted from a bank account or credit balance within minutes.

Today, digital payments can be made globally on the web, and you can even use digital global payments to pay a friend back for lunch or to buy something from a local vendor. Global digital payments still require Internet processing through a payment gateway and payments app, but these payments are no longer limited by the big players like Visa and MasterCard.

How Do Digital Payments Work?

When you use a digital payments app, you use a debit card to send and receive funds in most cases. This debit card is connected to your bank account, allowing funds transfers to seamlessly get passed on to your bank.

In most digital payment apps, you send and receive payments based on an email address, phone number or user ID. It’s a good idea to double-check the information of anyone you plan to conduct a payment transaction with to ensure accuracy.

Are There Downsides to Global Digital Payments?

Despite the benefits of paying for things digitally, there are some downsides to these technologies. First, although security is high for payment processors, the potential still exists for databases to get hacked. This can expose sensitive personal information, but more importantly, it can lead to account balances being tampered with.

Second, global payments may mean exchange rates come into play. If you’re sending a payment in one form of currency, the total you send may be more or less equal to the original price of an item for the person receiving the payment in another country.

Author Resource:-

Emily Clarke writes about multiple payment platforms, payouts API, marketplace payouts and more. You can find her thoughts at API solution blog.