How can you distinguish between payment system types?

1 Cash payment systems

Cash payment systems are the oldest and simplest form of payment, involving the exchange of physical currency or coins for goods or services. Cash payment systems have some advantages, such as being widely accepted, anonymous, and immediate. However, they also have some drawbacks, such as being vulnerable to theft, loss, or damage, requiring physical presence and transportation, and being difficult to track and verify. Cash payment systems are suitable for small and informal transactions, but they are not very efficient or convenient for large or online transactions.

2 Card payment systems

Card payment systems are the most common and popular form of electronic payment, involving the use of plastic cards with magnetic stripes or chips that store information about the cardholder and the issuer. Card payment systems can be either debit or credit, depending on whether the money is deducted from the cardholder's account or borrowed from the issuer. Card payment systems have some advantages, such as being widely accepted, secure, and convenient. However, they also have some drawbacks, such as being subject to fees, fraud, or disputes, requiring a card reader and a network connection, and being dependent on the issuer's policies and terms. Card payment systems are suitable for medium and large transactions, both offline and online, but they are not very flexible or transparent.

3 Online payment systems

Online payment systems are the newest and fastest-growing form of electronic payment, involving the use of digital platforms and applications that facilitate the transfer of money over the internet. Online payment systems can be either bank-based or non-bank-based, depending on whether the money is transferred through a bank account or a digital wallet. Online payment systems have some advantages, such as being fast, convenient, and versatile. However, they also have some drawbacks, such as being subject to fees, security risks, or regulations, requiring a device and an internet connection, and being dependent on the platform's functionality and reliability. Online payment systems are suitable for small and large transactions, especially online, but they are not very standardized or interoperable.

4 Mobile payment systems

Mobile payment systems are a subset of online payment systems that involve the use of mobile devices, such as smartphones or tablets, to initiate or receive payments. Mobile payment systems can be either contactless or remote, depending on whether the payment is made by tapping or scanning a device at a point of sale, or by sending or requesting money through a mobile application. Mobile payment systems have some advantages, such as being convenient, accessible, and innovative. However, they also have some drawbacks, such as being subject to fees, security risks, or compatibility issues, requiring a device and a network connection, and being dependent on the provider's service and coverage. Mobile payment systems are suitable for small and medium transactions, both offline and online, but they are not very widespread or accepted.

5 Cryptocurrency payment systems

Cryptocurrency payment systems are a special type of online payment systems that involve the use of digital currencies that are based on cryptography and distributed ledger technology. Cryptocurrency payment systems can be either centralized or decentralized, depending on whether the currency is issued and controlled by a single entity or by a network of nodes. Cryptocurrency payment systems have some advantages, such as being secure, anonymous, and global. However, they also have some drawbacks, such as being volatile, complex, and controversial. Cryptocurrency payment systems are suitable for niche and experimental transactions, mainly online, but they are not very stable or regulated.

6 Here’s what else to consider

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