In previous years, cheques have been used as the mode of payment. Technology has been the key change when it comes to payments. In the 90s, a massive change occurred in the mode of payment with the introduction of Debit Card, Credit Cards, Electronic Fund transfers, etc. Although later than most of the developed countries, India did accept the web to make online banking transactions. A large number of millennials have aided the acceptance of the web for online banking transactions.
Luckily, now every individual has the ability to make e-payments. Nowadays, making payments is as easy as moving your fingertips. The way banking has evolved in previous years has been astounding. Whether it is the type of account that you can open or the processes of opening any account offered by Banks, there has been a drastic change. A large rise in the number of people understanding that there is a need for financial literacy has made Banks to up their game. Now, let us look at some of the changes that have occurred in the online payments system in India beginning with the Internet.
For the first time, human beings were able to experience a virtual world similar to that of the real world. With the advent of e-commerce companies like Amazon in 1994, along with goods and services, money transfer solutions were also required. Banks and payment card association brands like Visa and MasterCard added security codes at the back of their cards
How have Banks have changed the course of online payment systems?
The very first Banking payments have happened through cheques. In the late 1990s, Internet Banking established itself in 1999 because of lower internet costs and increased awareness of electronic media and online banking. The convenience of making transactions online has been a major factor for people to make online payments
Technology has a say in everything we do. Right from the moment, we wake up till the moment we go to sleep. When it comes to Banking, lower internet costs have helped Internet Banking to grow. Through Internet Banking, one can avail of many services. These services include online money transfer, account opening, bill payment, tracking account activity, etc which has been made available to customers with the help of internet banking. Earlier Banks would take at least a day for receiving the cheque amount into the Bank Account.
Nowadays, the internet has become the fourth necessity after food, clothes and shelter. Even in Banking, due to technology, one can receive money on the same day within a few minutes. It is important to register yourself for net Banking as it is to open a Bank Account in the first place. For a business, many clients prefer to transfer via internet banking rather than sending over a cheque. Not many years ago, it was necessary to visit the branch to deposit money or withdraw money while standing in long lines.
After the .com bubble in 2000, the Smartphone bubble occurred in India in 2008. Getting everything on your phone has become standard. While people preferred to keep a list of their transactions on their passbook. Now, account holders prefer to get their statements through net Banking or the Bank’s app. Some Banks have completely discontinued providing customers with statements on paper. The customers have to use online modes of getting the statements. In the case of not wanting to take the statement online, a customer will need to visit a branch.
The biggest benefit of internet Banking is that the customer becomes empowered. An empowered customer should be able to get all the convenience required for him’/her to make transactions. It also helps banks to understand what kind of services are used by the customer through mobile Banking and recommend those services to them. Communication between the customer and the bank is streamlined through virtual robots present on websites or the Bank’s app.
In India, Banks have made singular cards for ATM Cards and payment cards where one can swipe over a card swiping machine. The reason for debit cards was to provide an opportunity for customers to make transactions without having the need of withdrawing cash from ATMs and then make the payments.
Each debit Card has a particular daily limit set to it. Among other Banks, Kotak Mahindra Bank has one of the highest daily withdrawal limits and daily transactional limits. The Platinum Card has an ATM withdrawal limit of Rs. 1 lakh and a purchase limit of Rs. 3 lakh. For premium customers, Kotak Mahindra Bank also provides a Privy Platinum Debit Card with a purchase limit of Rs. 3,50,000 and an ATM Withdrawal Limit of Rs. 1,50,000.
Being linked to interest earning (savings account), your money is never idle. It will always keep earning more money in the form of interest. Another benefit of having a Debit Card is that it comes with peace of mind because the Card is provided with insurance. Instead of carrying around money in your wallet, just carry a debit card. If you get robbed on the streets while shopping, you can rest assured the robber won’t be able to use your card, and if they do, you will have the debit card issuer on your side. The launch of Debit Cards in the 1990s has helped in making the customers convenience of utmost importance.
A credit card allows you to borrow money to buy things on credit. Generally, credit cards are used by people to buy something which they will not ordinarily be able to buy with the balance in their savings account. For e.g. on a credit card, one can purchase a fridge, at the end of the month there is a minimum balance that you have to pay. (Equal to interest on the value of fridge + administrative costs of banks). At the end of 2 years, you have been able to set aside the money for the fridge and you pay off your total due and keep a zero credit taken for the next month.
Among the Credit Cards offered by various Banks, Kotak Mahindra Bank provides the best rewards. For e.g. On a PVR Gold Card, a customer gets 24 free PVR Movie Tickets (2 per month) and additional tickets if you spend Rs. 10000(1 ticket) and Rs. 15000 (2 tickets) respectively. Therefore, let us assume that the price of every ticket is Rs. 400. At the very least, a customer gets benefits of Rs. 400 *24 = Rs. 9600. This Card also provides other discounts on various lifestyle websites. The Annual Fee of this Card is Rs. 499. Therefore, by signing up for the card, you will be getting a benefit of at least Rs. 9100 even before you use the Card.
Mobile wallets have been used by Indians as a result of Demonetization in 2016. becoming cashless while banking was a major factor that encouraged people to start using UPI. UPI (United Payment Interface) is a service which enables anyone to transfer money from one bank account through apps. Paytm, BHIM, PhonePe and MobiKwik are some of the mobile wallet apps that have UPI through which one person can transfer to another.
The benefit of this type of transfer does not require you to have an IFSC Code, nor is there a cooling period (like the one in NEFT). All you need is a Virtual Payment Address (only if the platform of the receiver and sender is different). In the case that you are transferring via the same UPI App, you only require the receiver’s mobile number to make the transaction.
It is clearly in the interest of customers to use online banking because it provides customers with convenience. Current designs of online banking systems may not address users’ needs and expectations of online banking. User-centered design methods can achieve this. Internet, phone, paper, statements, ATM and visit to the branch all must appear as one holistic experience for the customer. In India, banking, like several other transactions, continues to be relation-based and in need of human assurance and intervention, technology notwithstanding. This was the only particularly significant deterrent. The benefits of online Banking can be seen when Banks will able to offload customer service costs and increase sales by maximizing self-service. Gradually, Indian Banks have helped better customer experience and brought in a sense of convenience for the customer. As 21st-century banking users entrust the care of one of their most important assets to cyberspace, a seamless, stress-free and successful experience is essential. Design with users’ success as focus, content understandable by ‘anybody’, supported with demos and help to reduce intimidation, will justify investment in online through increased usage by satisfied customers.
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