India is on the verge of becoming a fully cashless economy, is it true or not? Well, several explanations will tell you about how much our economy has advanced and moved towards being cashless. For now, national priority is given to digital payment and gateways that can transform the country into the world’s most digitized societies. Amidst the covid-19 crisis, India got a boost to its digital economy- meaning more digital payments than cash transactions, that promotes contactless exchange in the country. Having said that, no wonder people will get highly used to digital payment systems by the time the pandemic situation settles, leading to sudden hike in digital users.
Digital India got a rise in monetary transactions soon after the government’s demonetisation move years ago. The no. of tools and solutions in the e-payment industry saw a hike and the population’s preferences shifted to electronic transactions. The Indian consumer has the choice of e-wallets, United Payments Interface systems(UPI), Unstructured Supplementary services device (USSD) services and more for financial transactions online. Let us go through the various modes of payment under digital payment systems that enable digital transactions:
It is a widely used, common method for making digital payments in India. As we all are aware that once after opening an account in any bank of India, the user gets a Debit card to fulfil the transactional/ withdrawal needs. The card can be Visa, Mastercard or Rupay, that depends on your choice of the bank. Few other types of banks that provide Debit cards are Maestro, Diners Club, Visa Electron and so on. Mostly, the government banks or private banks provide the customer with a Rupay card, which enables any domestic translation within India( not applicable outside). Further, as per the RBI norms, all transactions within India that go through payment gateway have to be strictly verified with OTP or pin for extra protection and security within the system.
A gift card or reloadable debit card are popular names of Bank’s prepaid card, which is either meant for a single use or reloaded multiple times. A user with a KYC complied account is facilitated to create Bank’s prepaid card through Net banking websites or can get to purchase from Bank’s official website. It depends upon the bank whether the prepaid card is Visa type or Rupay powered. It is fascinating to know that prepaid cards are mostly used for Corporate gift, Reward card or single-use card for gifting purposes. Whether you have to withdraw money from an ATM or perform an online transaction at any online gateway, the prepaid card is at your service.
UPI or unified payments interface is the most innovative digital payment solution, and gaining wide popularity in India, launched by NPCI. You might be anyways familiar with this mode of payment as it is now considered as one of the best solutions in the world. As per the data released by NPCI, all over India, there are about 148 UPI member banks issuing UPI to its customers. In addition to this, there are more than 33 third party apps that support UPI in the play store. In this system, you can send money to any virtual payment address if you own a Bank account, also your mobile no, has to be registered with your bank account. Some of the best UPI payment apps are, namely- Google Pay, Paytm, Phone Pay, BHIM( official UPI app launched by NPCI).
USSD enables all the offline processes of the online payments system in India. If you want to perform any banking task from the comfort of your home, then just dial *99# that works on the mode of Unstructured Supplementary Data service, also called as USSD. The services that a user can avail by the help of this mode consists of: balance inquiry, mini statement and Fund Transfer through MMID, by registering your mobile no. with the bank account. This process majorly failed to make a legitimate impact in the processes of digital payments in India.
In a nutshell, the digitization is favourable in the current scenario to greater extent. Still, there are village people or poverty stricken groups that can’t afford internet services or banking, so they are still sticking to old ways. Many communities still do not have complete faith in the online payment system and prefer using cash for transactions. It cannot be said that the whole economy is cashless until every citizen is ready for the big change- by acknowledging the presence of an online system.