Digital Payments: Step by step guide for various modes of payments available in India; Cards, USSD, AEPS, UPI, Wallets

Demonetisation in India has brought many alternate options to bring out the cashless economy. Now, India is moving from paper transactions to paperless transactions. Among the many services available to make a transaction, five types of options are available for the user to use based on his discretion.

1. Point of Sale (PoS) using credit or debit cards: requires a bank account
2. USSD mobile banking: requires a bank account and a basic phone without internet
3. Aadhaar enabled payment system (AEPS): requires a bank account linked with Aadhaar and a smartphone with the AEPS app
4. Unified Payment Interface (UPI): requires bank account and a smartphone with a UPI app
5. Wallets: does not require a bank account but require a smartphone with a wallet app

Now, let us see how you can use all these available options in detail

Point of Sale (PoS) & Card steps:

BANKS ISSUE VARIOUS CARDS FOR THEIR ACCOUNT HOLDERS

• Prepaid Cards 
• Debit cards 
• Credit Cards

USE YOUR CARD TO SHOP ANYWHERE 

• At any PoS 
• At ATM 
• Online shopping  

PREPAID CARD CAN BE ISSUED BY ANY BANK FROM ACCOUNT OR CASH (FOLLOWING BENEFITS)

• Pre-loaded card 
• Equivalent to cash 
• Can be recharged several times 
• Can be used at any PoS, ATM 

Unstructured Supplementary Service Data (USSD) based Mobile Banking

*99# - National Unified USSD Platform (NUUP)

Required for Activation 

• Account in a bank 
• Can be used for payments upto Rs 5000 per day per customer  
• Any phone with GSM network; Internet not required

Registration

• Visit your branch to link mobile number and bank account 
• You will get your Mobile Money Identifier (MMID) and Mobile PIN (MPIN) upon registration Can be done at ATM or online also
• Remember your MMID and MPIN 

New changes being brought to simplify user experience; no need for separate MMID 

Transfer Funds to another Bank Account

Aadhar enabled payment system (AEPS)

• AEPS allows bank-to-bank transaction at PoS (MicroATM) with the help of Banking Correspondent 
• Seed your account with your Aadhaar number 
• Now do transactions without remembering any PIN

Aadhar enabled Services 

1. Balance Enquiry 
2. Cash Withdrawal 
3. Cash Deposit
4. Aadhaar to Aadhaar Funds Transfer

Key Steps for AEPS Transaction

MicroATM Transaction

Unified Payment Interface (UPI)

REQUIREMENTS 

• Smartphone with internet facility 
• Bank Account details (only for registration) 

AVAILABLE APPS (28 BANK APPS) 

SBI app, PNB UPI, UPI Collect (ICICI), Axis Pay, Canara Bank UPI, UCO UPI, Union Bank UPI, OBC UPI and 20 other banks

UPI Registration Process

Registering on UPI

Sending Money on UPI

Sending Money

Collecting Money (raise a demand) on UPI

Collecting Money

Wallets

What are e-wallets?

• Electronic pre-paid payment system, mobile-first 
• Used in purchasing items on-line with a computer or a smartphone at a store. 
• An individual's account is required to be linked to the digital wallet to load money in it. 
• Most banks have their e-wallets and some private companies

Using Wallets

Consumer Wallet Limits: Rs.20,000/month for all. Rs.1 lakh/month with KYC

Merchant Wallet Limits: Rs.50,000/month with Self Declaration. Rs.1 lakh/month with KYC

Basic Requirements to Start Using a Wallet: 

•  Bank Account
• Smartphone
• 2G/3G Connection 
• A Free Wallet App

Summary