The transnationality of digital money, which means that it has the ability to flow freely when used for cross border transactions, does have benefits and also problems. One of the main advantages of using digital money is that it increases the efficiency of operations and opens up new opportunities for businesses. However, there are also problems that occur which are similar to those that happen with cash transactions.
Those with criminal intent
While there are benefits, it also can be the cause of problems when it comes to the government imposing income taxes. There are also people who use online payments for money laundering purposes. For every industry, there are those who have criminal intent and will take the opportunity to do their illegal activity. But it shouldn’t scare you off as there are many online payment services that fight against criminals. They will pay attention to whoever intends to open an account and monitor their activity carefully.
International payment transactions
There are also other common problems by those who use certain money services to handle an international payment transaction. One of these problems is that the account holder is at the mercy of the money services company when it comes to the exchange rate. The account holder has no choice but to accept that exchange rate.
Reputable money services company
There is a reputable money services company that does not do that and instead provides various payment methods so that the remittance may be made in the destination currency. This money services also has a debit card that their clients can get so that they can be paid in US dollars or in Euro. This debit card may also be used to send funds.
The very essences of digital money which is transnationality is perhaps its most vital characteristic. If the payment transaction is sent in the same manner as before, there would not be its positive economic impact. The traditional payment methods such as paying using cash slows down progress.
A ruling body
There are those who want to place a ruling body for online payment methods yet it is a challenge that would be difficult to overcome. There are various ways to make an online payment, in different currencies, and there is also the blockchain of cryptocurrency that might be impossible to place under one ruling party. The freedom of moving money online is there and there are many transactions that slip by the government, though it might not be with the intent to evade taxes, it does happen.
Check for documentation
Digital money does not circulate solely in one country as it can be sent as a cross border payment transaction. Often, there is no monetary authority that may be able to monitor each and every transfer of funds. However, anyone who has a money services account should always check first if that company has proper documentation.
About unification of currency
There are economic implications when digital money is treated just like traditional currency. It has contributed to the boom of global e-commerce tremendously. However, due to its overwhelming amount of financial transactions, there are those who want to be able to control it such as having one currency that brings about unification. Each nation has their own currency and there are also cryptocurrencies that would need to be part of this unification, which at this point in time, seems like an impossibility.