In India, you must have heard the phrase “Cash is King”. From making payments to small shopkeepers to purchasing real estate, the use of cash is ubiquitous. Digital Payments in India have a long way to go before they displace cash.
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Here are some crucial statistics for Digital Payments In India
India’s large informal economy and a preference for tax evasion are some of the major hurdles in the quest to promote digital payments. Shopkeepers and small retailers often do not accept credit cards for payment as they are wary of paying transaction charges. The Government has been actively promoting Digital Payments In India as a part of Digital India.
Some incentives provided by the government to promote Digital Payments In India
Different Types of Digital Payments in India:
Cards- Point of Sale
This is a simple method to allow you to make payments using your debit/credit card. You need to swipe your card, enter a pin and get a receipt. The government has been promoting credit card machine for shop to increase the use of different types digital transactions in India. Reduction in transaction charges for using a card machine is another way to promote cashless practices.
Different Types of Cards Issues by Banks:
1. Debit Card: This is issued by a bank where you have an account. Any expenditure is debited from the funds available in your bank account.
2. Credit Card: These are issued by registered banks and financial institutions. Credit Cards come with a pre-defined credit limit and the user can generally withdraw up to the credit limit. Credit cards can affect CIBIL scores and it is necessary to exercise prudence while using one.
3. Pre-Paid Card: These cards are offered by banks and can be used for transactions up to the prepaid amount. Some examples are Gift Cards, Meal Cards, and Rewards Card. They can be recharged once they run out of money and be reused.
Unstructured Supplementary Service Data Based Mobile Banking:
Features of USSD on mobile:
1. Can be used on simple phones for those who do not have smartphones.
2. It is ideal for the common man who does not have access to 3G or a high-end smartphone.
3. Allows a person to access banking services with a single number.
4. Can be accessed by a shortcode: *99#.
5. Payment limit per day is Rs.5000 per customer.
6. Allows instant money transfer, even on holidays and weekends.
This is one of the forms of Digital Payments In India that can be used in Small Towns and rural areas.
Aadhaar Enabled Payment Systems
One of the most convenient digital payments systems in India. This system has the following process:
Digital Payments in India Using E-Wallet
Features of a payments wallet:
1. Functions as a digital version of a traditional wallet.
2. Allows individuals to send and receive money through mobile devices.
3. Can be linked to a debit/credit card from where it can be recharged.
4. Allows various discounts and incentives to benefit customers.
Digital Payments In India Through Unified Payments Interface (UPI)
Main Benefits of using UPI for Digital Payments In India
- Allows Instant Electronic Payments from a user’s smartphone.
- A user can transfer funds round the clock.
- It uses the phone number to authenticate the identity of a user.
- Can be used on all days including holidays and weekends.
Immediate Payments Service (IMPS) for Digital Payments In India
1. Provides the facility of real-time funds transfer.
2. Available round the clock
3. The transaction can be authenticated using the Aadhaar Number.
4. The Debit and Credit Information is confirmed by SMS before being remitted to the beneficiary.
Benefits of Adopting Digital Payments in India
Convenience and Ease: There is no need to withdraw cash for all payments. This is also safe as there is no reason to carry a large amount of money. Digital Payments in India will allow people in far-flung locations to carry out their transactions without reliance on ATM’s.
Reduces Cost of Printing Currency: The RBI spends thousands of crores on printing currency notes. A push towards cashless payments will ensure that this money is better utilized elsewhere.
Creates Accountability: Corruption and other social evils like hoarding and racketeering can be reduced if people go cashless. Tax evaders and others indulging in similar malpractices will be forced to display their income. Digital Payments in India will increase indirect taxes and benefit the economy at large.
Learn How to Expand Business Online Using Digital Payments In India.