Cashless Payments is the new buzzword in India post demonetization. It will be a major shift in the way we transact. In my opinion, it requires tectonic mind shift for the majority of the people. There are few critics of Cashless Payments. They are of the opinion that India is not ready for Cashless Payments. They give their own excuses in favor of CASH payments because of obvious reasons. Though i might be wrong but in my opinion, only the people who have something to hide from IT department are staunch supporters of cash usage. It might be a harsh statement but it is based on my personal interaction.
At the same time, constructive criticism of Cashless Payments is always welcome. For example, one of the key concern is non-availability of POS machines in rural areas. Very valid point and the govt provided 2 POS machine free of cost for each village covering more than a lac villages. Besides POS machines, to promote digital payments govt is providing discounts on digital payments. Recently one of the senior citizens in my apartment was telling me an interesting story how he traveled from Bangalore to Hyderabad for 7 days without spending single rupee in cash :). Therefore, the people who doubt the success of cashless payments are far from reality.
Cashless Payments is NEW for people who are not so familiar with the technology and the latest developments in this domain. For the majority of people, only the usage of credit and debit card qualify as Cashless Payments. It is not true. There are multiple ways to go cash-free. I covered most of these points in my stand alone posts on a particular subject. I thought of compiling the list for the benefit of the readers. You can select the best option based on your requirement and convenience. Let’s check out
Cashless Payments – 15 Ways to Become A Cashless Person
1. Credit Card or Debit Card
The most easiest and convenient way to become a cashless person. If you have credit or debit card then you can make all the payments i.e. both offline and online through these cards. Personally, i prefer credit card payment over a debit card because of reasons i highlighted in my posts on credit cards. I do understand that may be many people would not get a credit card as they don’t have a credit history or poor CIBIL Score.
To extend the benefits of a credit card to a large section of the society, the SBI offer a credit card with a credit limit of Rs 25,000 for lower strata of the society. Alternatively, you can also opt for secured credit card. If you don’t have a credit card, you can use a debit card. It is preferred by the people who fear to overspend with credit card in the pocket like my father :).
In my opinion, UPI will transform the way we make payments. I shared it in detail in my post, UPI – 15 Imp points you should know. Currently, the UPI transactions are free and i don’t think so that Govt/banks will charge for UPI transactions. It is one of the simplest, convenient and fastest ways to transfer money. Recently i was pleasantly surprised when i made my first UPI payment at a small shop near my apartment and that too for just Rs 75 in a grocery shop.
Immediate payment service or IMPS is another way to go cashless. Govt is trying to popularize the same and all the banks have integrated IMPS transfer in their fund transfer option. I shared a post on What is IMPS – Immediate Payment Service?. The UPI’s backbone is IMPS but the only difference is that in UPI you only need to remember the VPA of recipient whereas in the case of IMPS you need to remember 2 parameters i.e. MMID & Mobile No or Account No and IFSC code. In my opinion, UPI will outshine IMPS in long run.
4. Mobile Wallets:
Mobile wallets are another convenient way to go cashless. Most of the online and offline merchants accept the payments through mobile wallets but there is a problem of too many mobile wallets. The success of mobile wallets in future will depend on the adoption of UPI and convenience to load the mobile wallet. The unanswered question is what is the incentive to use mobile wallet compared to UPI? Mobile wallets can survive by providing cashback or discount but it may not last forever.
The biggest advantage of UPI is that it is directly linked to bank account thus single step transfer whereas mobile wallets, you need to load money. Moreover, you don’t get any interest on the amount loaded on mobile wallets. On the other hand, the amount transferred through UPI earn the interest till the date of transfer of money. It might be a small amount in many cases but the user does consider this point.
5. USSD / *99#:
There is a strong counter argument that most of the modes of digital payment require net connectivity or smartphone. To fix this issue, govt launched *99# banking service. It is USSD (Unstructured Supplementary Service Data) based mobile banking that does not require a smartphone or the internet. You can access mobile banking on a basic handset and is provided free of cost.
The backbone of *99# banking service is IMPS. You can transfer funds through either MMID & Mobile No or Account No and IFSC code. I used it and found simple and convenient.
One of the traditional ways of modern banking to transfer funds. The biggest limitation of NEFT/RTGS is that it is not instant as there is a waiting period of min 4 hours to add a beneficiary. Just to add, it is a security feature as people use this method for high-value transactions. The RTGS is real time transfer similar to UPI and IMPS. Whereas NEFT takes minimum 30 mins for transfer depending on the timing of the transaction. The disadvantage is that you cannot transfer funds through NEFT and RTGS on holidays or outside NEFT and RTGS timings i.e. funds can be transferred only during a particular window.
The oldest way to go cashless :). Long back, i remember that cheque was accepted for retail payments i.e restaurant and hotel bill or retail purchases. I made some payments through cheque almost 20 years back. The only catch was that the cheque was accepted only from regular and trusted customers :).
The biggest concern for a retailer is cheque bounce and hassles attached to the same. Still, you can issue cheque/DD for many transactions if you are not comfortable with other modes of cashless payments. For example utility bill payments or you can pay to your friends and family members. For premium customers, the banks waive off DD charges and also provide home banking facility i.e. pick & drop facility.
8. QR Code:
One of the recent entrants in cashless payments club. It is very simple and i used it yesterday. You just need to scan the QR code displayed at the retail/merchant outlet. Enter the amount and that’s it. You need a smartphone with a camera and the compatible application. ICICI Pockets, Paytm, and some other apps provide this service. I also saw a news report that even auto rickshaw, street food stalls etc are also accepting payments through QR Code.
One of the hassle-free ways to make cashless payments. ECS is especially useful where you make the payment on a recurring basis. For example, utility bills, monthly EMI’s, credit card bills, insurance premium etc. You need not remember payment date and amount is automatically debited from your bank account.
10. Gift Vouchers:
I find it to be useful for people who are not comfortable with almost all types of cashless payments. For example, parents of one of the friends. Secondly, people who are looking for discounts. Though personally, i am not in favor of gift vouchers as i shared in my post, Gift Coupons/Gift Vouchers – A Marketing Gimmick. Still, sometimes you get a deep discount, for gifting purpose or you need alternate currency for purchase. In such scenarios gift vouchers come a handy option for cashless payments.
11. Net Banking:
Payment through Net Banking is an alternative to a credit card or debit card. You just need to login to your net banking account and authorize the payment. This option is suitable for people who don’t prefer to keep the debit card or credit card.
12. VISA Cardpay:
In my opinion, one of the convenient service but not so successful. You can transfer funds from your bank account to VISA Card. There are 27 Million VISA card holders in India. The best part is that similar to UPI, you only need a single parameter to transfer funds i.e. VISA Card no. The funds can be transferred only to the VISA cards issued in India. Only flip side is that it may take 3 days to transfer the funds.
13. Bill Payment Service:
Bill Payment Services reduces a lot of hassle. Even Govt backed NPCI launched Bharat Bill Payment System. It indirectly helps the govt’s objective of cashless economy. During my childhood, i remember how my dad used to maintain a diary to pay all the utility bills on time. Personally, i tried multiple bill payment services. I do agree that some of them are not so good.
To share an example, I subscribed to Bill Payment Service of one of the leading private banks. One fine day when I and my wife returned home from office we found that electricity connection of our flat was disconnected :(. Reason being, the bill was not presented to the bill payment service of the bank and the bill was not paid. The worst part is that bank never took the pain to inform regarding the same. Finally, i settled with the Bill Payment Service of SBI and from last 2 years i have not faced any issue. The amount is debited automatically from my savings account.
Not many people are aware that ATM’s are sort of full-fledged banks. You can transfer money, pay bills, pay credit card bill, recharge mobile etc. Therefore, ATM’s also facilitate cashless payments. Each bank provides a different set of services but people who don’t have access to the internet can also utilize ATM’s for cashless payments.
15. Aadhaar Based Transfer:
A relatively new option i.e. aadhaar based transfer for cashless payments. It is officially called Aadhaar Enabled Payment System. You need aadhaar no of the payee and IIN. In this case, IIN is the number that identifies the bank in which the money will be transferred. Each bank is assigned a unique IIN. Therefore, i will share the IIN of the bank to which i have mapped my aadhaar no. It is six digit no.
For amount transfer, you need only Aadhaar no of the payee and the name of the bank in which he/she has linked the aadhaar. The people in rural or semi-urban areas will be assisted with the IIN details through chart displayed in banks/customer service point etc. Currently, this option is visible under UPI on mobile apps.
Words of Wisdom:
In my opinion, a lot of effort has gone to facilitate the cashless payments. Now it’s citizens turn to make it successful. The cashless economy has far more benefits compared to cash dependent economy. In my opinion, people who have nothing to hide, welcome the cashless payments with open arms. Those who are giving excuses not having sufficient options, i have shared list to 15 ways to become a cashless person. If these two categories of people adopt cashless payments then the 3rd category who are strongly resisting the cashless payments will not have any choice but to adopt cashless payments. This is the beauty of the democracy and the country will be free from the clutches of black money.
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