By PETER KAMURI
The growth of electronic payments has been phenomenal. It has been more rapid, especially with the proliferation of the mobile phone money transfer services and online payments. This has left consumers in dilemma over the best method of making payments.
The dynamism in the sector has seen some people consider carrying hard cash a burden. Buying and making payments electronically has brought in a lot of convenience, making both paying of utility bills and shopping a pleasurable exercises.
Mobile phone service providers, through money transfer services, and banks, have made this a reality. The competition has reached fever pitch.
stiff competition
Although banks had initially been unhappy upon the entry of mobile phone services providers into the financial sector, they eventually embraced the module. They have integrated the service to make banking a better experience for consumers.
However, these changes have left consumers at odds over the best method to make payments—electronically or cash payments. Indeed, most financial advisers say it is hard to choose between the two. What one should think about are the benefits accrued from each making the choice.
Sylvester Wangunyu, a financial advisor says electronic payments eliminate the need to carry risky hard cash. This is why business people turn to this service especially the mobile phones money transfer to make transactions without the risk of losing their money.
“The other advantage of using electronic payments is that you are able to eliminate all the paperwork associated with cash payments. Cash transactions requires recording as evidence of payments and this can be cumbersome when it comes to filing,” says Wangunyu.
Electronic payment gives room for portability. Wangunyu says making payments, for example using mobile phone money transfer service, enables one easily access transaction details timely on phone. Carrying around bank slips and receipts can be burdensome if not untenable.
He adds, “electronic payments make it easy to track your expenses. Making a follow up of your spending manually can be a difficult task. Looking for the receipts and payment vouchers can take a lot of your time, compared to paperless payments where all the work is done for us electronically by paperless payments.”
Nature friendly
Andrew Wambili, a Nairobi based financial expert says nature conservationists prefer electronic payments due to their environmental friendliness. “Just think about the number of trees that would be felled to make the paper on which those receipts and bank notes are made of,” he says.
However, despite the rapid growth in the use of electronic payments, some people still insist making payments in cash is the best choice for making a purchase and other payments.
“What I consider to be the greatest drawbacks of using electronic payments is that I find it difficult to control my spending. This is because I always have easy access to my money all the time. Spending more of it is quite tempting,” says Mary Wangeci, a business lady in Muthurwa Market, Nairobi.
Wangeci prefers cash because she carries what is enough to meet her needs. There is usually no room to pay for what one had not planned for.
Wambili warns, “Paying for products and services electronically can appear pleasurable. You just need to key in the send key to make a payment. It is after you drain your account that you discover you had overspend.”
He notes cash payments will save people from the interest and service charges by most of the electronic payments system. This means pay more for an item when making electronic payments compared to payments in cash.
“If you struggle to avoid overspending, shopping with cash is one way to stick to your budget and limit impulsive spending,” advises Wambili.
He adds, “By paying in cash, you are able to set spending limits. This means you can only spend within set limits as you have already set yourself reasonable spending thresholds. You will only put aside the exact amount of money you want to spend.”
Wangunyu says cash payments minimises the chances of a transaction being rejected. “Not all outlets will accept payments through mobile phones money transfer services or other electronic methods. This can lead to embarrassment or delays in buying products or services.”
Choosing between electronic and cash payments is not easy. However, financial experts advice people to choose payments that best suit their needs, depending with the circumstances.
