Consumers often rely on credit or debit cards to make their purchases, but this technology isn't the latest money trend to enthrall consumers. One of the most recent advancements in payments is online currency, and while it's growing on some individuals, will its popularity last, or will it soon make way for more traditional payment forms to take hold once again?
Digital money, such as the newly popular Bitcoin, has caught on with some, but such money may not survive as a viable payment form for long. Various drawbacks make it difficult for many to imagine the long-term viability of this currency, and preferences may soon sway to hard currency and check payments once more.
Unstable value deters many
While it typically takes some time for the value of a dollar to rise or fall significantly, that isn't necessarily the case with Bitcoins. Value can plummet or skyrocket in quick succession, depending on demand, and this constant change doesn't do users much good, especially if the currency continues to lose value and their savings continue to dwindle.
The uncertain value also brings into question how people can pay for or sell goods and services using digital currency. An individual may offer a certain amount of Bitcoins for a product or service, but if the value of the money undergoes a significant and sudden change, is the initial offer still valid? Forbes uses the example of offering an employee 10 Bitcoins per hour - when the value of the currency jumps 10 times, the hiring company could go out of business paying high salaries or need to renegotiate worker contracts.
Few businesses and individuals accept digital money
Cash is accepted everywhere and most businesses also accept checks and cards, as well. But there are few places digital money is able to be spent, posing a significant problem for those who want to use it. Typically, only select online merchants will accept this form of payment, making it nearly impossible for people to use their digital money on an ordinary shopping trip.
Even though part of the nonacceptance of this currency stems from minimal use, wildly fluctuating values and a lack of understanding of how to process payments, some of the hesitation on the behalf of business owners could be digital currency's darker history. According to Finances Online, Bitcoins are often used for illicit online trading and purchases, making many hesitant to get involved.
Because of these drawbacks, it's unlikely online money will make an enormous impact on consumers and businesses, and it certainly won't overthrow traditional payment forms. Rather than worrying about Bitcoins, businesses should put more of an emphasis on actual coins by enhancing their coin counter and sorter, enhancing their cash room capabilities.
June 5, 2013