Explain three advantages of digital payments
Advantages of the digital euro
The rise of cryptocurrencies like Bitcoin can no longer be denied. The digital currencies not only have fans among the “normal” population, but also with many of the greats of the international financial scene. Many successful investors like Mark Cuban are advocates of cryptocurrencies and see a great future in it.
The advantages of digital payment methods are also clear. They allow users to make anonymous payments over the Internet without revealing their personal information. This is very advantageous in a real money casino VulkanVegas, for example, because the players then do not have to worry about the security of their data.
The easiest way to see the future of digital currencies is by looking at the plans of the European Central Bank (ECB). This is because it plans to introduce a digital euro, also known as the e-euro. On this page we explain what it is and what advantages the digital euro will offer.
Content of the article
What is the digital euro?
The ECB sees the future in such a way that almost all payments will only be digital and cash will be more or less superfluous. In countries like China or Sweden this is already the case today, and almost no one still uses coins or bills to pay for products in stores.
The ECB's plans are not quite as extreme, however, because in their opinion cash should not be completely replaced. Rather, the e-euro should represent an alternative to cash in order to make payments easier for users and at the same time to save costs for the production of coins and notes.
This is how the E-Euro should work
Once the digital euro is introduced, payment should work with it via a special app or a scanned QR code. These methods are already used by other payment systems such as Apple Pay or Google Pay and have proven to be very successful. Payment should even be possible without an internet connection and should use Bluetooth in these cases.
When will the digital euro appear?
According to a statement by ECB President Christine Lagarde, the digital euro is still around five years away. So for those who have hoped to be able to make their first payments with the e-euro this year or next, the news is rather bad.
Advantages of the digital euro
The digital euro should bring some advantages for both consumers and the ECB itself. We've examined the main ones of these benefits and highlighted some of them.
Benefits for consumers
A digital euro would bring some advantages for consumers. The most important of these are the following:
- Easier payments: Cashless payment is logically much easier than paying with coins and bills. Consumers no longer have to worry about whether they have enough cash with them or whether they have to go to the nearest ATM before they go shopping. In addition, the problem that change accumulates in the wallet and that it becomes larger and heavier will no longer be a problem.
- More hygienic: Another advantage of digital payment is that the payment process will be much more hygienic. Instead of changing money from one hand to the other, in future only a code has to be scanned in with the mobile phone to make the payment.
- High data protection: Many people worry that the introduction of the digital euro will expose them to a higher risk of data protection. However, this concern is said to be largely unfounded. The ECB assures that no personal data will be transmitted when paying with the e-euro.
Benefits for the ECB
The ECB itself should also benefit from the digital euro. The following reasons are mainly responsible for this:
- More control: A big problem with cryptocurrencies like Bitcoin for the central banks is that they have no control over them. For example, there is no way to compensate for currency fluctuations through appropriate measures.
- High cost savings: The production of cash is expensive. As ironic as this may be, it often costs more money to produce a particular currency unit than it is actually worth. These problems would be eliminated with a digital currency and the ECB could see very high cost savings.
It is no longer a dream of the future. Digital payment systems are on the advance and will sooner or later also reach Germany. Even if many people are not entirely at ease with this, examples from countries like China or Sweden have shown that digital payment systems work very well.
Once consumers see the benefits of the digital euro, many of them are likely to change their minds about the new technology. However, the issue of data protection is very important here. It is therefore to be hoped that the ECB's announcements will actually be complied with and that no personal data will be transmitted when paying with the e-euro.
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