Digital or electronic payments: What are they? Methods and advantages

Do you usually carry cash in your wallet? Do you still pay with physical money daily? If the answer is no, chances are you're already living in the world of digital payments—also known as electronic payments.

Today’s consumer habits are all about convenience and speed, and digital payments are a direct response to that demand. Especially after the 2020 pandemic, they’ve completely changed how businesses collect money and how people make purchases.

In this article, we’ll explain what digital payments are, how they work, what types of payment methods exist, and why they’re beneficial for both companies and users.

If a payment is the transfer of money in exchange for a product or service, then a digital payment is simply that transfer happening without using physical cash.

Digital or electronic payments rely on technology to move money through channels where no physical interaction takes place. Think credit/debit cards, apps, websites, and other tech-based tools that allow you to pay without ever reaching for a wallet full of bills.

For both businesses and consumers, this means more comfortable, flexible ways to transact. Without the need for cash, buyers can access more goods and services, and companies can expand their reach beyond just walk-in customers.

Digital payments go hand-in-hand with tech, and there are different ways to pay depending on each person or business’s needs. Here are some of the most common:

Contactless Mobile Payments

Whether it’s through your phone, a smartwatch, or even a credit/debit card, these payments are made with just a tap—often skipping PINs or other steps, making the whole process super quick and convenient.

QR Codes

With this method, users just scan a code that links them to the payment platform. No cash, no fuss—just a phone and a few taps to complete a transfer.

Digital Wallets

These apps have replaced the physical wallet. You can top them up and use your digital balance to pay, send, or receive money anytime. They’ve made everyday transactions much simpler.

Payment Platforms

These tools allow businesses to receive payments via bank accounts or cards—sometimes even in real time. They're the backbone of many online stores and service platforms.

Payment Links

A payment link is a unique URL where a product or service is pre-loaded. When a company sends it to a customer, they can click through and pay in just a few steps—easy, fast, and secure.

Digital payments bring a win-win situation: they make life easier for users and improve efficiency for businesses. They’re fast, safe, and reliable.

Their biggest advantage? Convenience. Users love how easy it is, and businesses can reach customers far beyond their local area.

Thanks to digital payments, we now talk about cross-border payments happening in seconds, reaching clients across the globe, and buying from anywhere, no matter where you live.

Digital payments have gained traction because they offer exactly what businesses and consumers want: speed and simplicity. That’s why the adoption curve just keeps climbing. In Latin America alone, the digital payment market was worth $1.7 trillion in 2023, and there are over 200 million mobile payment users. From 2022 to 2027, the annual growth rate of cashless transactions is expected to hit 15%.

Prometeo is a fintech focused on building cutting-edge infrastructure, specifically banking APIs that connect businesses with financial institutions to simplify processes like account access and bank transfers.

One of Prometeo’s standout solutions is Account-to-Account Payments, a service that lets businesses receive money directly from customers' bank accounts seamlessly and securely. This feature can be integrated into a company’s app or website so customers can connect to their bank and pay instantly, with no need to leave the platform.

Even better, businesses can also create payment links or QR codes to let clients pay without logging into the platform at all.

With Account-to-Account Payments, companies can:

• Get funds in real time, directly into their bank accounts.
• Remove friction from the payment process for both the company and its customers.
• Cut down on costs by eliminating intermediaries.
• Offer a smoother payment experience straight from the customer’s bank account, without leaving the checkout.

Want to see how Account-to-Account Payments can work for your business? Get in touch and let’s build something great together.