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Digital economy: how to adapt to new digital payments?

Editorial Airtm

December, 19, 2023

7 min. reading

The digital economy has catalyzed an unprecedented revolution in the business world. Since its conception, this concept has transformed the way companies manage their financial operations, especially in payroll management. That is why, with this content, we seek to delve into the impact of this economy on payroll management. 

Here are the key benefits they generate and how organizations can make the most of digital payments.

How has the digital economy emerged and evolved?

This concept has emerged with the proliferation of the Internet and the widespread adoption of information and communication technologies (ICT). It has evolved from simple eCommerce transactions to a complex ecosystem encompassing online payments, cryptocurrencies, and blockchain technologies. This is in contrast to traditional systems, with structures that still have old mechanisms. 

Likewise, this transformation has led to a paradigm shift in the way companies manage their financial operations, particularly in the area of payroll. Today, all employees can receive their money online. Thus, all this is through management that is done efficiently, ensuring secure and instantaneous payments to all employees of a project or company.

Advantages of the digital economy in payroll management

So why should every company take advantage of technological resources to improve its financial management? Especially, if you coordinate international transactions, taking advantage of the digital economy is essential in payroll management. Here are the benefits it brings:

  • Efficiency and accuracy: Automated digital systems ensure efficient and accurate payroll management, eliminating human error and reducing time spent on administrative tasks.
  • Security and transparency: Blockchain technology ensures data integrity and transparency in transactions, creating a secure and reliable environment for payroll management.
  • Global accessibility: In addition, digitization allows instant and accessible payments from anywhere in the world, facilitating payroll management for companies with international teams.
  • Cost reduction: By automating processes, companies reduce the costs associated with payroll management, which in turn allows them to allocate financial resources to strategic areas of the business.

Payments in the digital economy vs. traditional processes

The digitization of payments in this economy has completely transformed the way financial transactions are conducted compared to traditional payment processes. Below, we delve into a detailed comparison between these two approaches, highlighting the key differences:

Speed and efficiency

To be considered:

  • Digital economy: Digital transactions occur in real-time, enabling instant payments and funds transfers in a matter of seconds. In addition, the speed of transactions is essential for modern businesses that require agile responses.
  • Traditional processes: Traditional methods, such as bank cheques and wire transfers, can take days or even weeks to fully process, significantly slowing the speed of transactions.

Security and transparency

The differences are:

  • Digitization: Technologies such as blockchain ensure the security and transparency of transactions. Immutable and public records provide a high degree of confidence in the integrity of transactions.
  • Traditional processes: Traditional methods often involve many intermediaries, which can increase the risk of fraud and errors. Lack of transparency can lead to distrust among the parties involved.

Global accessibility

In terms of accessibility, we must take into account:

  • Digital economy: Digital payments can be made from anywhere in the world with Internet access, facilitating international trade and allowing companies to work with global customers and suppliers without geographic restrictions.
  • Traditional processes: Traditional methods are often limited by geographic boundaries and can involve additional costs and delays in international transactions.

Transaction costs

It is also important to consider:

  • Digitization: Digital transactions tend to be more cost-effective as they eliminate intermediaries and reduce operating costs. This allows companies to save on bank fees and other costs associated with traditional methods.
  • Traditional processes: Traditional methods, such as bank cheques, can involve bank fees, processing fees, and other additional costs that can add up over time.

Flexibility and convenience

In turn, there are:

  • Digital economy: Digitization allows for a variety of payment methods, from credit cards to cryptocurrencies, offering flexibility for users to choose the method that best suits their needs.
  • Traditional processes: Traditional methods are often less flexible. In turn, they may require a presence in person to perform certain transactions, which can be inconvenient in terms of time.

How to adapt to developments in the digital economy?

The ICT sector in the financial sector is always evolving. To take advantage of its novelties in your business activities, we recommend:

  • Continuous training: Training employees in the effective use of digital tools is essential. It allows you to take full advantage of the benefits of digitization in payroll management. Continuous training ensures that teams are up to date with the latest technologies.
  • Systemic integration: Integrating payroll management systems with digital platforms ensures fluidity in the processes. Then, it allows for a seamless and secure transfer of data between different platforms. It is key to take this into account. 
  • Data security: Data security is of high importance. Implementing robust security measures such as two-factor authentication and end-to-end encryption is key. This protects the confidentiality and integrity of financial information.

Are you a freelancer or a small business? Then opening an Airtm account or using the Enterprise mode is the first step to simplify your transactions and payments. Discover the convenience and efficiency of digital financial transactions. You’ll be ready to experience a new era in payroll and payment management – the future of the digital economy is just a click away!

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