Do you know why traditionally modes of payment are disappearing fast? In the digital age where we can make instant payments to anyone in a few seconds. Technology has made our transactions faster than before. Due to this we are becoming more dependent on modern ways of making transactions. Additionally, slowly our dependency on the traditional ways of making payment are decreasing. But does that mean these will fade away with time. You can find the answer in history. Back in time before the birth of currency people used Barter System. In the barter system people exchanged products and services for other products and services. Barter system worked fine for centuries. With time, currency replaced one side of the exchange. The older system disappeared but we did not stop exchanging. Now we exchange currency for goods and services.
Traditional modes of making payment
Some of the common traditional modes of making payment are cash payments, payment via Cheque or Check and Demand Draft (DD). Let us understand each one of them in detail.
Making Cash Payments
Cash payments are the most famous traditional method of payment. Cash works best for give and take transactions in real time. Due to this many people only accept cash payments. Additionally, you do not need to worry about an internet connection unlike digital modes of payment. Whether you are an individual working for an employer or starting own business. Cash payments are the most famous traditional method of payment. Cash works best for give and take transactions in real time. Due to this many people only accept cash payments. Additionally, you do not need to worry about an internet connection unlike digital modes of payment. Whether you are an individual working for an employer or starting own business. Most token money transactions come in the form of cash payment. Most people use cash payments for daily transactions like buying groceries and milk.
You simply cannot ignore the value of cash transactions. Due to this cash payment is one of the most famous traditional modes of making payment to someone.
Cheque Payments or Check Payments
Cheque payments are the second most famous ways of making payment to someone. Cheques are a small leaf of paper that has your bank account number and name printed. You only need to fill the payee’s name (account number if applicable), payment amount and your signature. Account payee cheques are also more secure. Therefore, if you are looking for a secure traditional mode of making payment, cheque is one of you options.
This is an old payment method but easily give tough fight to the payment gateways of modern time.
Demand Draft or DD is the most secure Traditional mode of making payment
Most of the features of a demand draft match with cheque payments. The only difference is that the amount gets debited from bank account at the time of creating demand draft. This is a method of transferring money from one account to another. Additionally, demand drafts do not require your signature. The receiver simply presents the demand draft in his or her bank and get the money transferred.
What is an account payee check?
On an account payee cheque payer strikes a line or two on the top left corner of cheque leaf and writes “Account Payee”. This ensures that the receiver cannot get cash against this cheque. This will only be credited into the payee bank account. With this step you make the transaction secure.
What is demand draft?
This is a method of transferring money from one account to another. Additionally, demand drafts do not require your signature. The receiver simply presents the demand draft in his or her bank and get the money transferred. This is also the most secure traditional modes of making a payment.