Digital Payments – Digitalization of the Economy

Digitalization is pertinent to promote transparency in Indian economy. In an economy that employs cash for more than 80% of the transactions, transparency finds no room. Hence a huge part of it becomes unaccounted wealth. The unaccounted money then is stacked either in Swiss banks or under the pillow. Thus, the money becomes black. To prevent this, a concrete mechanism has to be developed which is convenient too. Fortunately, we already have it – Digital Payments.

 Why Pay Digitally?

Suppose you buy something worth Rs. 500, and just forget to take the bill for same, the transaction would go unaccounted. The entire amount is evades the tax loop, thus harming the economy. Just in other case, if you take bill, the amount transacted is accounted. Hence the govt. receives its share in form of the tax. But the system has potholes and tax evasion is easy. On the other hand when you pay digitally the transaction is carried out by a third-party vendor i.e. bank. Hence, the bank has all the details on transaction and tax evasion is difficult. The current accounts are directly linked to the digital payment platforms, thus enhancing transparency and accountability.

Are Digital Payments Secure?

digital payments

Digital transactions use Secure Electronic Transaction (SET) Communication Protocol. The basic concept of digital transaction protocol is to tie the financial authorization with an online authorization. Only you can transact with your unique credentials through your bank or any other platform. The credentials are checked by the bank and hence the amount is transferred to the merchant or service provider. Certain protocols have been adopted by all the major service providers such as SecureCard by MasterCard, 3-D Secure by Visa. So, relax and enjoy the convenience of paying through a click.

How Can I Make A Digital Payments?

digital payments

Digital Payments are secure, convenient and promote transparency. But how do I pay digitally? Well, digital payments can be made through Debit cards, Credit cards, Digital Wallets, UPI, USSD, AEPS, and the list goes on. To present you a better picture let’s divide it into some steps and then follow.

Step I

For all these services, you first need a bank account. Open a bank account and obtain a Debit or Credit card ASAP.

Step II

After you have opened a bank account, the debit or credit card then become a one for all source of payments. The other medium i.e. online banking or internet banking requires 24×7 internet connectivity while debit cards can be used even without it, in some cases. So the card is much more convenient.

Types of cards

Debit Card : You need funds in your bank account and amount is debited immediately after the transaction.

Credit Card : The card allows you to make a purchase on credit.

Step III

You can directly through a card to any merchant or use a digital wallet for the same. Digital wallets need internet connection but are more convenient than the cards. First of all you need to load cash from your card or internet banking. (The digital wallet app automatically saves your card details for future convenience). You are ready to pay. Just a click from the app and transaction is complete.

You can register on PayTm (a digital payments platform) here.

Digital Payments Simplified

To make digital payments hassle-free and within the reach of those who don;t have access to internet or no working knowledge of a smartphone, the Govt. of India has taken up various initiatives to simplify the Digital Payments. AEPS, USSD, UPI are some of them, to name a few. Moreover the process of converting KCC cards into Debit Cards is on. This will make funds readily available to the farmers.

Digital Awareness & Demonetization

“Transaction without cash, it is possible” is the new tagline of the awareness campaign launched by Govt. of India. Few methods of cashless transactions such as UPI (Unified Payment Interface), USSD service, etc. find mention in the campaign.

USSD Service

digital payments

The service is as easy as checking your prepaid balance.
Just a few steps to follow.
Works on normal mobiles phones too. No need to worry if you don’t have working knowledge of a smartphone.
Few codes to memorize, is all that you require.

Aadhar enabled Payment System

digital payments

Feed in your bio-metrics.
Follow easy steps.
And Funds transferred.

Digital Wallets

digital payments

Paytm , State Bank buddy, Freecharge are some of the prominent digital wallets. Just load your cash through the card or net banking and pay money at a click.

 

To read about UPI click here

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