Bank card VS, cash: pros and cons, which is better

With their pros and cons, bank cards are now prevalent everywhere. So let's talk about them. In this article, we will discuss not only the advantages and disadvantages of this means of payment but also compare cards with cash in terms of convenience, benefits and reliability.

Definition of a bank card

What is a bank card? It is a payment instrument, which is a metal or plastic (usually) rectangle. On its front side, there is typically a card number, the logo of the issuing bank, holographic protection, expiration date, and the holder's first and last name. On the back side, cards are equipped with magnetic stripes (early versions) or a chip (microchip), which stores and transmits data during payment. The cardholder's signature and CVV2 code are also included. The card format (length and width) is regulated by ISO 7810.

Bank cards are a universal means of payment. They are linked to bank accounts and allow you to make money transfers, remote (online purchases) contact or contactless (via terminal) payments. Also, using an ATM and a card, you can check your account balance and withdraw cash.

The two main types of cards are:
1. Credit. With such a card, a person uses the bank's money for his needs. The borrowed money must be returned within the specified terms. If the user returns the funds earlier, he does not pay interest.

2. Debit. Such bank cards are a place for storing the user's own funds, that is, an electronic wallet. Pension accruals, salaries, benefits, etc. are received here. You can save money on such a card and/or use it for payments.

Pros and cons of bank cards

At first glance, bank cards are incredibly convenient (which is true) and have no drawbacks. However, there are still some disadvantages, although not always obvious. Below, we will list all the strengths and weaknesses of cards and answer whether it is reasonable for a modern consumer to abandon the use of cash altogether.

Advantages

The key advantage of cards is their simplicity and ease of use. No cash on you or nothing to give change with? Cards are free of these problems. To pay, simply place the plastic rectangle (or a smartphone with contactless payment support) on the terminal or enter the details on the website.

Other advantages of bank cards include:
• secure transactions. When paying with a card, the likelihood of robbery or theft is minimized. The pin protects the card from being used by third parties. If the card is lost, it is easy to block it by calling the bank or logging into the app;

• benefits. Most banks give cashback or bonuses for using their cards. Exchange rates for card payments are more favorable;

• opportunities. Bank cards mean an instant transfer of funds to other cities and countries, payment of utilities and taxes remotely (and when setting up autopayment, even without delay), and much more. Some banks also offer customers an overdraft: when the money in the main account runs out, you can pay for a purchase automatically using credit funds;

• financial control. All receipts and write-offs are displayed in the application instantly, making it easier to distribute and plan a budget.

Disadvantages

And what about the disadvantages of bank cards? The obvious ones are possible technical failures of the equipment required to use the cards (terminals, ATMs, etc.), as a result of which it is temporarily impossible to pay for a purchase or withdraw cash.

The list of disadvantages includes:
• bank fees за for service, money transfer or cash withdrawal, overdue loan, etc.;

• cash withdrawal limits may be set;

• fraud. If card details fall into the hands of criminals, you may lose the funds in your account;

• card blocking. The bank suspends the card upon expiration or if suspicious activity is detected on the account;

In addition, for some users, such a convenient means of payment as a bank card leads to greater expenses: transactions are fast, the amount leaves the account unnoticed, the person buys more, including using credit and overdraft, and gets into debt. Another disadvantage is that card payments do not work everywhere.

Cash and bank cards - which is better

Before comparing bank cards and cash, let's go over the pros and cons of the latter.

You can pay with physical money everywhere. The buyer does not need special equipment and an Internet connection. The bank will not block this form of payment. Purchases can be made without disclosing personal information. The risk of spending more is reduced since, psychologically, it is more difficult for a person to part with cash. These are the advantages, but there are also disadvantages, and there are more of them than with cards. You cannot buy goods on the Internet with cash. A money transfer requires more time and hassle. Money is easily lost, counterfeited, and devalued. A person can be cheated in a store or robbed. It is much more challenging to store cash, especially large amounts, safely.

Obviously, a payment method such as a bank card is many times superior to physical money in terms of convenience, security and profitability. But ideally, it's worth combining two forms of payment: having a card with you (or paying with it contactless) and some cash – for cases when it's impossible to use a card.

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For 18 years now, PAYGATE has been contributing to the development of e-commerce in Kazakhstan. And one of our goals is to make card payments available in all corners of the country. Do you want your customers to have an opportunity to pay for goods and services contactless with all the benefits? Send us your requests, and together, we will find the best solution.