Digital Payments

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Why Cashless?

Demonetisation was introduced on November 8, 2016, and was met with a lot of protests. It intended to get rid of Fame currency notes, unearthed black money and put a stop to drug and terrorism financing. Another less mentioned aim was to promote digital transactions. However, currency circulation and printing of higher value notes (₹ 2000 and 500) increased, erasing the significance of the move. As platforms like PayTM and UPI Apps are brought in, digital transactions seem to be gaining recognition and trust.

This, in turn, allows the Digital India programme to make its “Faceless, Paperless, Cashless” motive known to the people. It also comes with many advantages which many are not aware of:

  1. Reduction in the Expenses of Printing Currency: Printing one note of 200, 500 and 2000 rupees costs in between ₹ 2.93 a ₹3.54. This alone is an unrequired expenditure. Paired with the Expenses of storing and maintaining currency it is quite expensive. The materials used to print currency (ink, paper) and the machines are imported and have a negative effect on the economy.
  2. Getting Rid of Unaccounted Money:  Digital transactions tackle the troublesome black money transactions. Black money and unaccounted wealth are always stored in physical cash and transacted in the parallel economy. Curbing cash transactions is very essential to control and break these obstacles to development. An increase in transparency of transactions also guarantees a higher control of bribery.
  3. Counterfeit Currency Notes: It is an automatic process; the removal of fake noted with the introduction and increase of digital transactions. Fake currency notes are used to finance terrorist and anti-national elements. Reducing and possibly stopping the production of these notes will ensure that these elements cannot carry their plans out. This in a way ensures the security of the nation too.

While lower classes are still coming around to accessing digital transactions, most establishments, organizations, and shops are favouring digital transactions to physics cash. If you are still not aware of the many options used for digital transactions, worry not as given below is a list of the potential methods which could replace cash. It is a brief list with some details about each mentioned method.

  1. Digital Wallets: Similar to storing physical money in your wallets, it is accepted by most vendors in all cities across the nation. Transactions are simple to make by using QR codes which vary and are specific to the seller. These wallets are also highly encrypted so there is no need to worry about frauds or unethical behaviour. Examples are: PayTM, Mobikwik, Freecharge, or bank launched wallets like Lime (Axis Bank), or Payzapp (HDFC Bank).
  2. Unified Payment Interface (UPI): These are mobile applications developed with high-end encryption. They link all your bank accounts and allow you to transfer money from one account to another. Transferring through UPI is very secure as it involves transactions without needing to give out any of your account details. You only need to share your registered phone number. Examples are Tez by Google and BHIM by the Government of India. These apps even provide incentives to increase the number of users and motivate current users
  3. Banking Cards: These are Debit cards, Credit cards and other cards used for transactions. They are always provided by the bank and offer more convenience and security than want other methods. These are older methods compared to any system including mobile applications. But they are far more secure with a 2-factor authentication which consists of a PIM and OTP. They offer the consumers the freedom to make any purchases through a domain, be it physically at the shop or through the Internet. They are time-saving and permit emergency withdrawal of cash. Examples are RuPay, Vista, and MasterCard.
  4. Aadhar Enabled Payment System (AEPS): It is one of the newer methods introduced by the Indian government, and is still being put into action. It requires you to link your bank account and Aadhar card to each other. It allows you to make transactions at the Point of Sale through the Business Correspondent of any bank by using your Aadhar authentication. It is an upcoming method but is envisioned to encourage a new era for Digital India to travel and work with minimal amounts of physical cash.
  5. Mobile Banking: Similar to mobile wallets, it is more large scale. It is an application service given by most banks allowing you to make transactions and do bank-related work remotely by using your phone or tablet. All banks provide an application which is easy to use and access. It saves you the time and hassle of physically visiting a bank for a comparatively menial task.

These are some of the most known and current processes of digital transactions. They are easy to use once you get into the habit of it. Again, they are more advantageous than carrying physical cash which is a constant source of anxiety for the person carrying it. It is also environment-friendly as physical currency is revealed to allow transfer of skin condition. It is also necessary for India to go cashless if it wants to move up to the status of a developed nation. Most European countries have reduced their currency printing by a large margin and are slowly shifting to digital transactions. India too needs to take this step as it is of utmost importance at this point. It is also a wise move to eliminate anti-national elements and black money and marketing as these transactions are always done in physical currency. I hope that after reading this, you have not only gained some information and insight yourself but will also attempt to inform and educate those around you. Spreading the word will ensure a faster shift to digital transactions and will provide India that pushes it needs to grow as a nation.