Write about the following topic:
Nowadays plastic money replacements such as credit and debit cards are extremely popular, even more than banknotes and coins.
Discuss the advantages and disadvantages of this.
Give reasons for your answer and include any relevant examples from your own knowledge or experience.
Write at least 250 words.
Electronic transactions are gradually replacing the traditional banking system and the use of banknotes is being supplanted by credit and debit cards. The transformation toward a cashless society might be slow, but steady and widespread. This paradigm shift has both positive and negative aspects, and this essay deals with both of them.
Primarily, electronic transactions and plastic card payments are more convenient and are processed on the go. People neither have to carry a bulk amount of cash nor write a check – which usually takes a couple of days to clear the payment. The electronic payment system is global in nature and hassle-free. Consequently, the eCommerce industry has flourished and many individuals have their own online businesses without any brick and mortar shops. For instance, nowadays it has become pretty easy to shop with a VISA or a Master card, virtually from anywhere in the world. Personally, I hate standing in a long queue to pay my utility bills, and my cards let me do it from home – a time saver indeed.
On the contrary, the trend does not come without negative aspects. Although we can use these cards due to technological advancement, the risks of using plastic money, however, pertain to this technology. The primary threat to such payment mode is cybersecurity and hacking. For example, once a credit card is cloned or its sensitive data is hacked, the owner would suffer a great financial loss. A technology giant like Facebook has failed to protect its user data, for example, and the misuse of user data is a global concern. The same goes for plastic cards and online payment systems that have the same vulnerability.
To conclude, despite some adverse effects, the use of plastic money for making and receiving payments is the need of the hour. It provides a plethora of advantages but we have to be careful of its use.
[Written by – Fahad Arif]
Advantages of using plastic money (i.e. credit and debit cards):
1. The convenience of doing transactions from home.
2. Has global acceptance.
3. These cards easily fit into our wallets.
4. Reduces the risk of carrying a huge sum of money.
5. Facilitates online payments.
6. Enables small business owners to run business 24/7.
7. Offers credit facility and instalment facility.
8. The risk of theft and loss is minimised.
9. Supports the growth of eCommerce.
10. Requires less time to process the transaction.
Disadvantages of using plastic money (i.e. credit and debit cards):
1. Not accepted by small vendors.
2. Sometimes the payment is rejected due to technical problems.
3. Such cards may impose high interests on the owner.
4. Plastic cards often are responsible for the impulsive shopping habits of people.
5. Vulnerable to hacking, data theft, misuse and fraud.
6. High-value transactions are often not possible.
7. Sometimes impose additional service charges.