India Shifting Gears from Paper Money to Cashless Economy

Over the past few years, many attempts have been made to digitise offices.They were nipped in the bud in due course, because of improper planning by entrepreneurs. The various barriers that once hindered the idea of a paperless office have slowly been destroyed in the time attributed to the advancement of checking applications to the development of secure storage room in the Cloud.

PM Narendra Modi seems to have taken a major shift post Demonetisation  to rendering India towards a cashless economy from the initial objective to fight against  corruption and Black money.This was pretty much confirmed in the PMs’ Mann ki Baat’  (a monthly address  on National radio), on Sunday. He urged people to start using cash substitutes like debit cards and digital wallets to have a less cash economy which in the long run will help India move towards a cashless economy.

According to credit Suisse estimates, more than 90% of consumer purchases are transacted through cash.Although,because of fall in the price of  smartphones and mobile data  has seen a surge in the  digital transactions in recent years,  still the base seems low. Singapore(61%) leads the charts among countries with cashless economy followed closely by Netherlands(60%).India (2%) is way far behind .So with demonetization, India is expected to take giant strides towards achieving the goal of  cashless economy.

Modi tweeted a slew of measures that can be taken to achieve this objective his official twitter account @PMOIndia. let us have a glimpse of some of the methods currently in use:

1) Cards, POS

Cards: Cards enable users to make payments by electronic fund transfer.Most common cards include credit/debit cards.A payment card is electronically Linked to the bank account and transactions can be done just by swiping the card and entering the PIN number. You can also carry all the virtual transactions by entering the requisite card details.

POS :.known as 'point of sale' or 'point of purchase (POP), wherein the user completes the retail transaction.The retailer  prepares the invoice for the goods purchased and indicates options for the customer to make payment.The customer needs to swipe his debit/credit card and complete the authentication process to make payments.

2) USSD (Unstructured supplementary service data)

USSD is a short messaging service and unlike regular SMS they will be stored for the current session itself.National Unified USSD Platform (NUUP) is offered on a shortcode: *99#. The service allows every banking customer to access banking services with a single number across all banks - irrespective of the telecom service provider, mobile handset makes or the region.

3) Aadhaar enabled payment system

The main objective of Aadhaar based payment system is to enable the customer to use his/her Aadhar to carry basic financial services like cash withdrawal,cash 
deposit,balance enquiry ,and payments. The only inputs the customer needs to give during a transaction at micro ATMS include

• The name of the bank where he holds the account.
• Aadhaar number
• Fingerprint captured during Aadhaar enrollment 

4) e-Wallets

e-wallet is an online account that helps you buy anything and carry out transactions online without the use of debit/credit card. E-wallet is like a  prepaid account. However, the e-wallet providers do not pay any interest to the amount loaded in wallets.With e-wallet, you can carry out all the transactions virually. There is no amount limit to open an E-wallet you can have as low as Rs 10 in your wallet.There are three variants of e-wallets available.
Also Read:Demonetization effect: Best methods Sellers can use to receive payments with zero additional fee

Generic online e-wallet: 

These wallets can be used online.Internet companies like paytm, oxygen wallet and Mobikwik .Login to the site and you can transfer money in wallet using credit/debit card  and netbanking.

Company specific e-wallet: 

They are closed wallets.You cannot transact it anywhere except the company.Examples can be seen in taxi hailing services like Uber,Ola supermarket chains, and Online portals.

Bank e-wallets: 

Many banks offer e-wallets that allow customers to pay money in one click.For this, you have to download the e –wallet based application from Google play for android users and Apple App store for ios users.You have to fill the requisite details and you have to set a pin after which one-time verification code will be sent to your registered mobile number.You can load cash in it the wallet using  debit/credit card and internet banking. The mobile number registered for e-wallet must be in regular use or else the application won't work unless you register again with a new number. 
Also read

5)  UPI (United payments interface)

UPI is a system that powers multiple bank accounts and banking services like fund transfer and merchant payments in a single mobile application.It was launched by National payments corporation of India(NPCI) and Reserve bank of India(RBI) with an aim to minimize cash transactions and drive towards cashless or digital economy.
Also read:Step by Step Guide to use Unified Payment Interface (UPI) in HDFC Bank Mobile Banking App