Financial Transactions - changing ways of Transaction | FinanceXP

 Financial Transactions

From time immemorial, man has been keen of exchanging assets to develop and grow itself. Be it money, securities, properties: you name it. The fact is that the exchange of these paves out the way for new growth opportunities for them. Transactions are happening all around the world- every second, millions of them. When observed closely, it is observed that any given time, the entire world follows the same pattern of transacting. Economies may be different, the rate of growth may differ but the way transactions are done, they are more or less the same on the entire planet.

Definition of transaction:

If someone asks about the simple definition of transaction, you would probably reply them with something like the way exchanges are settled between people or the modus operandi one follows to settle any financial deal. Yes, you are very true. Transactions are a way of performing monetary operations in order to execute financial agreements between parties(or businesses). This model of transactions have given birth to many financial institutes who plays a fine role in settling transactions today. The Banks, The Brokage firms, The financial advisors,  The electronic wallets which you carry in your pockets and what not. They all are the ideologies that were formulated after the very idea of transactions and its verifications.

Banks: The Core of every transaction.

The Banks are the primary institutes linked to every transaction that is happening. They are the heart of every transaction in the economy. The entire money in any nation's economy is both generated and regulated by the Central Bank of the nation. Generation of money is a little complicated thing which we'll cover later but by regulation, its well understood that we are talking about the transactions that occur at any instance within the economy.
Suppose you are a native of The United States. For every cent you transact with, it affects the stats of the the American economy. Howsoever small the transaction may be, since everything is linked within the framework of the economy, fluctuations occurs in the statistics. These fluctuations are happening constantly as the market never sleeps. For all the transactions that happen, Banks plays a core role in monitoring and regulating that. Banks ensures that every transaction is legal, is processed and is refined in every sense.Check Out: Finance: The Root of Every Monetary Sructure

THE BARTER SYSTEM: WHEN WORLD WAS INTRODUCED WITH TRANSACTIONS.

The Barter system is known to be the oldest mode of transaction that is in records.
People used to trade using the goods they had and exchanged them for the goods they need. Services were also exchanged for goods when required. Growth was the function of the amount of productivity, ways of growing were limited though.
The Barter system opened the way for the new currencies- in the form of coins, leaf paper currencies, etc.
The world was not a global hub back then and hence, this system was a local method of a transaction- limited to a community or a locality, at most.

CURRENCY: Opened way to expand transactions.

With the advent of the concept of currency, transacted fetched to go global. Large economies which were the separate blocks were now combined on a global level. They were not only affected by what happened internally but also from the external activities. Competition and colonization affected economies in its very nature. The invading powers ruined and strengthened themselves, New currencies replaced the old ones and based on the strength of the currency, power centers developed in the world, who eventually brought in more competition after the second world war.

Today and Tomorrow: From Finance perspective.

The way world is running today is the result of the past actions. How developed a nation is, it is seen from how large is its economy. Finance declares which state is developed, is developing and which is underdeveloped. Hence, every nation is trying hard to strengthen its economy, finding ways to implement more effective ways, substituting it with the conventional methods.

Today:

With the reach of the internet, transaction methodology have completely. Digital transactions are becoming more reliable and trusted mode of transaction. People prefer using digital wallets than physical cash. The reason is simple: Digital transactions are fast, goes on record and reliable.

Tomorrow:

As and when technology grows, it helps and it substitutes the old and finance experts predicts that tomorrow is the age of the BLOCKCHAIN. People carries different views on the blockchain; everything has its pros and cons but transactors always opt the way which is convenient and profitable.