Cashless payments have become a routine. People in most countries of the world now use various payment systems to make and receive payments. The payment systems provide stability of money transactions as well as their high speed and security. There are national and international payment systems.
In essence, a payment system offers opportunities for cashless money transactions. Banks and other financial institutions make sure that the following tasks are successfully completed:
- Money flows are smooth;
- Transactions are safe;
- Technical malfunctions are prevented or quickly fixed.
One of the key advantages of payment systems is a high speed of transactions. A bank transfer takes a day or more to go through while payment systems allow making instant money transfers.
There is legislation that governs the activities of payment systems that can be divided into international and national ones.
- International payment systems.
VISA, MasterCard, and American Express cards can be used in many national states and they qualify as international payment systems.
- National payment systems.
Some payment systems are used only within a single national state and therefore, they qualify as national payment systems. Some examples are Carte Bleue in France, SNCE in Spain, and RTGS Plus in Germany.
A special subcategory of payment systems is electronic payment systems. They have become especially popular over recent years. They are used for making payments in cyberspace. Both private individuals use electronic payment systems. Online transactions are also performed instantly and their geography is the whole world: a person from France can buy something from a Chinese online shop and easily pay the seller in China.
Electronic money is convertible into cash as you can transfer it to your bank account. Electronic payment systems are similar to regular payment systems but instead of a plastic card, you normally have an electronic wallet. Your electronic wallet has details that are similar to a bank account details.
Today, there are over a hundred payment systems in the world. Let us briefly discuss the advantages and disadvantages of some of the most popular payment systems. These include the following ones:
- Visa and MasterCard as international payment systems.
- PayPal.
- Perfect Money.
- Advanced Cash.
- Skrill.
Advantages of payment systems
First, let’s discuss the advantages of each payment system.
- Visa and MasterCard.
These are the most widespread payment systems in the world. They are used for payments in a great number of countries. In particular, of all US payment systems, Visa and MasterCard are the two most popular ones. The systems are also widely used in the EU countries.
Visa cards are accepted in 200 countries in total. The turnover is US$ 4.8 trillion. The primary currency is the US dollar. MasterCard headquarters are located in the USA but the primary currency is the euro. Cards are accepted in 210 countries but the number of MasterCard clients is lower than the number of Visa clients.
- PayPal.
The longest-standing and the most popular electronic payment system in the world. Nearly 90% of all online payments go through PayPal in the USA. At the same time, the system is available in 200 countries and it supports 25 currencies. PayPal is a structural division of eBay and the lion’s share of all purchases on eBay are made through PayPal. Your email address is used to create a PayPal account for you and transferring money from there to your regular bankcard is easy.
- Perfect Money.
The system was started in 2007 and it has become highly popular since then. Perfect Money allows making money transfers between private individuals. You can set up a US dollar, a euro, a gold, or a Bitcoin account with the payment system. Crypto transactions are a weighty advantage that the system offers.
Other advantages include the following ones:
- Simple registration process;
- Moderate commissions;
- An opportunity to use unidentified accounts;
- A high level of transaction protection.
A commission is due for every transaction. Perfect Money charges identified users 0.5% and it charges unidentified users 1.99% Money withdrawal costs 2.85% for fiat currencies and 2.5% for cryptocurrencies.
- Advanced Cash.
Another popular payment system available in 200 countries. You have to make a passport selfie and provide proof of residential address to set up an account with Advanced Cash.
Advanced Cash works both with individual and corporate clients. The ‘Business’ tariff plan allows making SWIFT transactions.
Other advantages of Advanced Cash include the following ones:
- Support of major national currencies;
- Cryptocurrency operations;
- Easy cooperation with other electronic payment system;
- Plastic cards are issued (the fee is 5 dollars);
- No commission on internal transactions;
- Reliable security instruments;
- A user-friendly interface;
- Round-the-clock client support.
Advanced Cash is licensed by the International Financial Services to conduct many types of online money operations.
- Skrill.
One of the first electronic money systems to be created. It was launched in London in 2001. Your account with Skrill can be identified or unidentified. Identified clients have no restrictions on transaction amounts.
Please note that you can choose the currency for your account only once. You will be able to perform transactions in other currencies too but conversion commissions will be due. We recommend that you opt for the euro.
Deposit options and commission fees depend on the country of the account holder. Normally, the commission is about 2% per transaction.
Main advantages of Skrill:
- Instant money loading and withdrawal;
- A high level of account security;
- Attractive bonuses for loyal clients;
- A mobile application.
Skrill clients can also obtain plastic cards that are added to their electronic wallets. These can be used similarly to regular plastic cards.
Disadvantages of electronic payment systems
Each payment system also has certain drawbacks.
- PayPal.
Too much depends on where the client is located: many national states face restrictions. Commissions on international transactions are comparatively high.
- Perfect Money.
High commissions on money withdrawal is not the only disadvantage that the system has. Other minuses include the following ones:
- Lack of money exchange with other payment systems;
- No special software (everything is done in the browser);
- High transaction commissions for unverified users.
Many operations are available only on verified users, which is a minus from the viewpoint of confidentiality protection. But then again, this is typical of most electronic payment systems.
- Advanced Cash.
No mobile application is available. National financial regulators have no control over Advanced Cash. If you want to cancel a transaction or dispute it, you are going to have a hard time doing that.
- Skrill.
The main disadvantages include the following ones:
- Impossibility of canceling or disputing a transaction;
- High commissions;
- The need to use a master key to make transactions.
Conclusion
More than a hundred electronic payment systems are at your disposal today. All of them claim that they are efficient and secure digital financial institutions. However, you should not always take their claims at their face value. The main criteria that you should use when assessing an electronic payment system are the following ones: the lifetime of the system and its reputation in the market; the tariff policies; the client support efficiency; and the available deposit and withdrawal options. If you are satisfied with the conditions that a payment system offers, it can become a very handy payment instrument for you.
