Gone are the times when people used to make payments in cash. But now the trend has changed and cash transactions are replaced by digital transactions. Digital transactions are those transactions where the payment is made through online mode without the use of hard cash. Digital payments are considered a safe and convenient way to pay as compared to cash payment.
To make our economy cashless, Government of India has taken several steps to encourage digital payments in our country. As a result, people developed their habits of doing transactions digitally. This change has been observed after demonetization.
Moreover, digital payments allow you to save your money and time as there is no need to stand in long queues to deposit and withdraw money in banks. It also reduces your transaction cost. Wells Fargo bank in the US allows their customers to withdraw cash from ATM through their smartphones instead of using a debit card or credit card. This means that other countries are also making efforts to adopt digitalization.
Types of digital payments
Now let us discuss some of the kinds of digital payments:
1. UPI apps
UPI stands for unified payments interface. With the help of UPI app, we can easily transfer money from one account to another. For transferring funds between two accounts you need to download the UPI app. Nowadays, UPI apps have become popular in making payments at any time and anywhere. BHIM, PHONE PAY, HDFC UPI APP, I MOBILE are some of the examples of UPI apps.
It is one of the important means of digital payment. AEPS or aadhaar enabled payment service allows the customer to transfer their funds online. For that, customer needs to link your aadhaar card to your bank account. Payments will be done with the help of point of sale machines.
It is also known as 99# banking. USSD banking is used by the customer to check their account balance, transferring funds between interbank accounts or sending money. If you want to use USSD banking then you should not need any Smartphone or an internet connection to operate it.
Banks provide cards to their customers for making digital payments. Payment through cards is one of the secured modes of payment. The customer gets the benefit of cards payment as they do not need to carry cash. Here are some of the different types of cards issued by banks to their customers:
• Credit cards
It is an important tool for making payments. Credit cards allow us to purchase things even if we do not have money. A person has sanctioned a limit up to which he/ she may withdraw cash. These cards are also used for national and international payments.
• Debit cards
The debit card is issued to those persons who are having their accounts in banks. If you want to make your payments from one account to another account then a debit card is the best option for you. Making payments through debit card is a secured mode of payment.
• Prepaid cards
Just like debit cards and credit cards, prepaid cards are another option for you to make payments digitally. The only thing you need to consider about prepaid cards is that you have to recharge these cards. However, these cards are not linked to your bank account.
5. Mobile wallets or e-wallets
Mobile wallets are an important aspect of making digital payments. Instead of using a debit card or credit card, you can use your e-wallet. Just like in debit or credit card you have to remember your pin, you need not worry about your pin no. To do secure payments, your bank account details can also be stored in your m- wallets.
6. Internet banking
Earlier customers need to visit the bank branch to do banking transactions. As a result, your time, money and efforts get wasted. But now banks offer them to do their banking transactions online through national electronic funds transfer (NEFT), Real-time gross settlement (RTGS) and immediate payment services (IMPS). Moreover, it offers you to transfer your funds 24*7*52. So if the banks are closed then also customer can transfer money with the help of internet banking.
7. Mobile banking
Nowadays the scope of mobile banking has become diversified. It is carried out by the customer to perform financial transactions using a mobile phone or tablet. The benefit provided by mobile banking is that customers can easily transfer their funds to any other person, make online payment of bills, etc.