How many forms of payment are there?

Every day there are more people who no longer only pay in cash, but also use other forms of payment to make their purchases.

Every day there are more people who no longer only pay in cash, but also use other forms of payment to make their purchases. This has caused retailers to diversify the ways in which they can receive money (whether physical or digital) for the payment of services, live betting and products. This leads us to ask ourselves: how many forms of payment are there? In the following lines we have put together a brief x-ray of the most important ones.

Conventional payment methods

We could define them as those where transactions do not necessarily require electronic devices for the consummation of the act of purchase. Many are used less and less; however, others are still widely used by buyers.

Cash as a form of payment

It is possibly the best known (and one of the oldest) forms of payment. By means of bills or coins (known as fiduciaries, since people assign them and trust that they have the value indicated by their denomination, regardless of the materials with which they are made), people buy betting or contract goods and services.

Because it is difficult to trace its journey and what it is used for, there is a marked tendency to increasingly use electronic money instead of cash.

Check as a form of payment

The idea of the check is basically the same regardless of the type in question (personal, bank, etc.): the buyer issues a certified document with the amount to be paid to the bearer, which is exchanged for cash.

Cash on delivery as payment method

In payment methods, an interesting case is that of cash on delivery, since some would consider it a subcategory of cash payments. It can be better understood through an example. On Facebook there is the option to put different products on sale. When a customer chooses one, they contact their supplier and they agree on a delivery location. Once they see each other, the former gives money to the latter for the input.

Electronic forms of payment

They are those in which the buyer makes the payment of a good or service by means of electronic money.

Credit and debit cards

One of the most widespread electronic payment methods are cards, whether debit or credit. The first makes use of the amount of cash that a consumer has in their bank account at the time of their purchase. The second makes use of a credit that must be paid by the buyer in the future.

Electronic transfer as a form of payment

This form of payment consists of moving a certain amount of money from one bank account to another. To specify it, the buyer must certify his identity by means of a code provided by a bank. Both credit and debit cards and transfers are services offered by banking institutions.

Online payment without the need for a direct card

Companies such as PayPal, PayU, Shopify Payments, TransferWise, 2Checkout, Payoneer, Stripe, BrainTree, WePay, among others, serve as intermediaries between the client and the seller in the payment and collection of money for a product or service. Both one and the other register their data on the site, so, for example, the provider does not have access to the consumer’s bank details.

Payments through mobile devices ( eWallet and contactless )

A trend that is becoming more and more popular is that of payment through mobile devices, also called eWallet or contactless. With this modality, the user can buy directly at the point of sale with the smartphone or through applications. Some make use of a QR code, and others with the use of the smartphone by bringing it closer to the point of sale terminal to carry out the purchase process. Contactless technology makes use of RFID (Radio-Frequency Identification) and NFC (Near Field Communication) to make the transaction possible.

Virtual currency or bitcoin

Another special case is that of virtual currency. It only exists in the digital space, but it has its equivalence with physical money. More and more people are using this means of payment. Some examples of this are Ethereum, Monero, Tether, Litecoin, Dogecoin and Bitcoin, among others.

To give us an idea of how it works, a bitcoin has an equivalent in current currency, be it Euros, Dollars or Mexican pesos. This currency can be bought from someone else who wants to sell the ones they have and there are also ATMs in different parts of the world, where people who own bitcoins can exchange fractions for cash. According to Statista, there are currently (July 2021) 18.77 million bitcoins in circulation.