In recent years, many consumers have switched to using digital transactions instead of cash and cards, complaining that it too cumbersome and frustrating to use. With electronic wallets, payments are processed through the smartphone, which is attractive to many users, especially younger audiences. Regardless of the convenience and simplicity of the invention, skeptics argue that it encourages users to exceed their budgets because they are less aware of their purchasing decisions.

The innovation of e-wallets and digital transactions is an excellent example of disruptive innovation as it disrupts the existing transaction procedure by replacing cash, cards, and point of sale systems with digital transactions on a smartphone. However, I think that rather than improving the quality of business transactions, the innovation of digital transactions may be a step backwards from our current system. As mentioned before, consumers are less conscious of how much they are spending when using digital transactions, causing them to develop unhealthy spending habits and fall into debt. In addition, I think that online transactions may be more susceptible to fraudulent activities and scams. Another foreseeable risk is that if smartphones are lost or stolen, others may access the user’s financial information and make unauthorized purchases. Personally, I believe that the risks associated with digital transactions outweigh the benefits that it offers. I think this demonstrates how consumers must critically analyze disruptive innovations to determine whether or not it can successively replace the old system and add incentives.