Post-demonetization and the push to cashless transactions, it is clear that the emerging digital ecosystem is here to stay. While it was always billed as the future, demonetization has brought forward the date of inevitable shift towards a cashless society.
The impact of cash crunch and subsequent push to the digital mode of transacting has been such that those who have had a taste of it are unlikely to revert completely to cash-based transactions. It has ignited the curiosity of not only the younger individuals but, also the older lot, who have been used to transacting in cash.
Yet, the general awareness levels remain low. A good grasp of available cashless instruments and their usage can go a long way to ease the cash crunch that is pinching the average Indian.
Here are ten new-age digi-tools that can facilitate your routine transactions in a rapidly evolving virtual payments ecosystem.
1. United Payments Interface (UPI)
Part of the clutch of digi-tools that the government wants to promote, UPI is the brainchild of National Payments Corporation of India (NPCI). It makes money transfer as simple as sending an SMS. Instead of details like account number and IFSC code, you only need the recipient’s virtual payment address (VPA); for instance, xyz@abcbank. Banks are allowed to create their UPI apps, which their customers can use. In fact, there is no compulsion to use the app of the bank where you maintain an account – you can download any of the UPI apps available for Android phones, register yourself and link your accounts – across banks – to it. While most major banks have now joined the bandwagon, UPI apps are yet to be made available on iOS. Unlike mobile wallets, it does away with need to load money through your bank accounts.
2. Mobile wallets
Flavour of the current season, mobile wallets like Paytm, Mobikwik and Freecharge have captured the imagination of many – some are using it due to sheer compulsion in light of cash crunch, while others are relying on them sensing the convenience and utility value they offer. Once you download the apps and load funds into the wallet, you can transfer funds using the mobile number of the recipient who also has a wallet, make online purchases, pay for cab rides and more importantly, shop at merchant outlets. Their footprint has grown as smaller merchants find it easier to accept payments through mobile wallets rather than install swipe machines for credit and debit card transactions. From a paranoid digital sceptic’s point of view, mobile wallets score over UPI in ensuring peace of mind as any damage due to potential frauds is limited to balance in the wallet.
3. QR code-based payments
Banks and wallets alike offer this mode of making payment. Primarily of use at merchant outlets, you can scan the QR code displayed at the cash counter and make the payment after entering the bill amount. It is preferable alternative to sending money by entering the merchant’s mobile number, as your contact details will remain under wraps.
4. Credit and debit cards
The more conventional form of technology-based payment mechanisms, they allow you to transact merchant outlets, e-commerce sites and also to transfer funds. The mandatory use of PIN as the second factor authentication at PoS terminals has made these transactions more secure.
5. Internet Banking/NEFT transfer
Again, you can use your bank’s net banking facility for money transfer and online shopping. You need to register yourself with the bank for the same. You will have to memorise the customer ID allotted to you, your password and use the second factor authentication to carry out the transactions.
6. Immediate Payment Service (IMPS)
Those registered for their bank’s net and mobile banking can access IMPS to transfer funds to beneficiaries using her mobile number and the seven-digit Mobile Money Identification Number (MMID). Like Internet banking, you have to first add the IMPS beneficiary and approve the same before sending money.
7. Prepaid forex cards
Efficient substitutes to cash while travelling abroad, prepaid currency cards work just like credit and debit cards. However, the advantage here is that since you have to load funds before your departure, currency exchange rate is locked in on the day of loading funds, taking away the risk of dealing with currency fluctuations on a holiday. Besides, ATM withdrawal charges are lower compared to debit and credit cards.
A less popular mode of payments, it has come into limelight thanks to the government’s recent push towards a less cash economy. While wallets and UPI necessitate a smartphone and at least a 3G connection to be functional, USSD can be used by those who own just a basic mobile handset that does not support Internet. You have to register yourself for mobile banking and carry out transactions using that mobile number. All you have to do is dial *99*44# from your mobile phone and follow instructions on the menu that shows up on your screen to execute transactions like money transfer and balance check.
A task that takes up a lot of time periodically has been made easier thanks to online payments enabled by most utilities like electricity distribution companies and telecom service providers. Now, you can either make bill payments online by logging on to individual utility sites or register for Billpay services offered by banks. Typically, it is offered free of charge to accountholders. Once you register yourself and enter the details of various utility bills, it would be akin to giving your bank a standing instruction to make the payment at specified dates. To avoid duplication, make sure you do not make payments separately after registering for this service.
10. Closed wallet/vouchers/Gift cards
These instruments come with certain limitations and can be used only for specified purposes. For instance, a gift card issued by a bank entitles the user to make purchases – online as well as offline, but does not permit cash withdrawals. Similarly, an Amazon gift voucher or card can be redeemed only the ecommerce portal to buy products.