In this COVID-19, Let us follow Social distancing and go Digital. Cashless transactions in which money is not paid physically but in the cashless or digital forms.
There are many situations where we can use digital methods to pay at the time of-
- Recharges of phone, TV connections
- Payment at any shop
- pay bills
- Make investments
- Payment at Petrol stations
- Loan Installments
- LIC, Medi-claim payments
10 Types of Cashless Methods in India
1. NEFT/RTGS
NEFT and RTGS are like modern way of fund transfer. This has been mostly used to transfer bigger amounts of funds on immediate basis. But limitation of this kind of transaction is that it takes place only during the hours allocated to it. And even can’t be performed on holidays, as banks are closed.
2. Debit/ Credit Card
Through Debit / credit cards, one can make both offline and online payments using cards. There is basic difference in both the cards which is-
- For debit card, first you need to have funds in bank account and then only you can transfer fund.
- For credit card, you have been given certain limit by bank upto which you can transfer funds, even when you don’t have money in your bank account. At month end, you get bill of credit card as per transactions performed and also interest is charged on it.
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3. Online/ Mobile/ Digital Banking
Mobile Banking allows you to transfer funds from your bank account online at any time, from anywhere. Once you get registered for Net banking, you get I’d and password, i.e, your essentials to log into the banking platform. Also, by enabling this, you can perform many tasks, without visiting banks, like checking balance in your account, bank statement, paying loan installment, requesting for cheque book, etc.
4. UPI transactions (Unified Payment Interface)
UPI has transformed the way we make payment. Using this you can transfer money from one bank account to another. For this basic requirement is your mobile number should be linked to the bank account number. A person is not required to share bank account number anywhere. Now, grocery shops, medical stores are also accepting money through UPI.
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5. QR Code
One have to just scan the QR code using the application like PhonePe, Paytm, BHIM, Google Pay etc. Enter the amount to transfer and authorise the payment. Autos, taxis, food stalls are even using this way of payment as one can transfer money easily and in real time.
6. E – wallets
Just like we keep money in our wallets, we have mobile wallets or digital wallets. You have to first load money from bank account into the wallet and then use it for the payments. So, it’s like virtual wallet or bank account. There are many wallets like Paytm wallet, Mobikwik Wallet, Amazon wallet, Zpay wallet etc. However, there are restrictions on the usage of the wallet money. Due to attractive incentives and offers, people prefer to use wallets to a large extent.
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7. AEPS (Aadhar Enabled Payment Services)
These are like Aadhar cum debit card. When your Aadhar card number is linked to bank account, you can do the payment at the merchant’s store. You have to scan finger and authorise the payment.
8. Cheque/ Demand Draft
We all already know this, as we have been using it since many years. Though it is not digital method but it is cashless method. Cheques are issued as account payee or bearer’s cheque. But many have the fear that cheque might get bounced.
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9. Gift vouchers
Gift vouchers are like coupons. Many big stores rewards you with gift voucher on offline or online purchases. Stores like Big Bazzar issue these kinds of gift vouchers. Say after purchases of Rs. 5000, you are awarded with voucher of Rs. 1000, which you can redeem after 2 months, but at their store only. Hence, these rewards always attract many customers.
10. USSD
Unstructured Supplementary Service Data (USSD) is a cashless option for those who do not have mobile internet data facility. Banking customers can avail this service by dialling *99#. With this they can do mobile banking transactions using basic feature mobile phone. For availing this service, a customer must register his phone number with his bank.
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Now, the question is why one should go cashless?
As payments are done through bank accounts, one always have track on their spending. So there is always in the mind that do I have money to buy this or not. Hence, money is used wisely. As every coin has 2 sides, there are even people, they over spend money as they had balance in the account.
Going cashless is much important for the economy of India. Because of cashless transactions, circulation of black money can be stopped to good extent. And this why our beloved Prime Minister Mr. Narendra Modiji had declared demonetization on 8th November 2016.
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Why people don’t opt much for cashless transactions?
- Few people don’t understand how to operate applications and make online payment, hence they mostly don’t pay online.
- For tax evasion, people feel it’s comfortable to perform transaction in cash.
- Due to a lot of cyber frauds, people feel it’s risky to perform transactions online. Though Government is taking possible steps to reduce cyber – crimes and motivating people to perform online transactions.
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Whether it’s really possible for one to go cashless in India?
As from the detailing one can understand it is really possible to go cashless. But, there are many rural parts, villages where people are not much into online transactions. So, in that case one can use ATM cards and carry little cash. Instead of going cashless one can use less cash.
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Now let us understand this from businessman’s point of view
QR code, UPI transactions has made it easy for businesses to perform transactions. Due to cashless environment, Bank visits are reducing, the long que can be avoided. Because of online banking, statement of accounts can be checked online, reconciled sooner and even accounting becomes faster. But for the evasion of taxes, they opt cash transactions to certain extent.
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The author of above article is CA Ankita Gandhi.
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