Remember the serpentine queues that were seen at all the ATMs around the country during the 2016 demonetization drive? or the uproar for the 100-rupee note due to a shortfall of cash? Despite the dominance of money in the current Indian economy, an increasing number of Indians are gradually switching towards digital payment systems to make regular payments.
Digital payments, which account for transactions currently valued at USD 200 billion in India is estimated to grow to a value of over USD 1 trillion by the end of the financial year 2023 (according to a market report released by Credit Suisse). With a positive role in encouraging the adoption of digital modes of payments, to create a cashless or “less-cash” economy in India. The government of India is estimating around INR 1,800 crores worth of digital transactions in the financial year 2017-18, which would be a 67% increase over the digital operations done in the previous fiscal year.
The Road to Digital Payment
Why are more Indians using alternative forms of payment other than cash? There is a surge in the number of people using digital payment options such as payment card, internet banking, mobile wallets, and mobile banking apps. Listed below are some of the multiple benefits of using these digital payment modes:
No longer is it necessary to carry wads of cash in your wallet while travelling to work or for a vacation. Neither is it necessary to withdraw some money at the local ATM regularly. Digital payment has made it easier for you to carry and make payments whenever you need to, including in emergency situations.
No longer do you need to stand in a queue to pay your monthly bills! Digital payment makes it easier to pay utility bills (including your electricity, phone, and internet bills) from a single source. This has removed the hassle of issuing payment cheques to each of your utility service providers, along with the need to deposit your cheque in the provider’s payment counter or a physical drop box.
This is particularly important for customers, who are unable to keep track of their spending. Unlike cash spending, digital payment options help you monitor and control your monthly purchase, as each payment transaction is recorded with the required payment information.
Theft or loss of large amounts of cash can pose higher risks as cash cannot be quickly recovered. Loss of your digital payment modes like debit or credit cards is easier to block and hence are more safe and secure to carry in your wallet.
Explore the Various Types of Payment Options Available to You!
Payment cards are a form of digital payment that is issued by a bank to its customer to either access funds available in the customer’s bank account or through a credit account. Popular forms of payment cards in India is the Debit card and the Credit card. Payment cards are primarily physical plastic cards, which have the benefit of being accepted at all major shops and merchants in India. You can use both debit and credit cards for online payments including online shopping, purchase of train and flight tickets, or movie tickets.
One of the exciting payment options is the use of a virtual payment card presented by Kotak Mahindra Kotak to its 811 account holders. It is a virtual debit card with card details stored in a smartphone app!
A gift card is a prepaid card that is usually issued by a bank or a retail brand. Gift cards are pre-loaded with a specific amount and offer the freedom of choosing a gift to the card receiver. Gift cards, issued by the retailer, can be used for purchase at any of the brand's retail outlets, while gift cards, issued by banks, can be used at any of the retail stores partnering with the bank.
Mobile wallets (or e-wallets) is a form of digital payment that uses your smartphone as the payment device, instead of plastic credit or debit cards. Typically, a mobile wallet comprises of a smartphone app that can be easily downloaded to your phone and stores all your bank account or debit/ credit card information in a digital format. Mobile wallets eliminate the need to carry plastic payment cards, which can easily be lost or damaged.
Don’t want to add multiple e-wallet apps to your smartphone? Use the Scan and Pay functionality through Kotak 811 smartphone app to make convenient digital payments!
Mobile banking is used to define all the banking transactions that one can perform using a smartphone app and is not restricted to just payment options. Smartphone users can download their respective bank’s mobile app and perform a variety of transactions including checking account balance, transferring funds between accounts, or pay utility or credit card bills.
Enjoy seamless banking transactions through Unified Payment Interface (or UPI) which lets smartphone users easily transfer funds between their accounts in different banks.
The growth and adoption of digital payment modes in India augur well for the establishment of a cashless or a "less cash" economy in the country. Banks and financial institutions are tapping into the potential of the digital payment model by offering innovative banking products and services to their customers.
These various forms of digital payments available in the country today are likely to dominate technology-driven payment systems in the foreseeable future.