IASNOVA
What is Digital Payment?
Digital payment is a way of payment which is made through digital modes. In digital payments, payer and payee both use digital modes to send and receive money. It is also called electronic payment. No hard cash is involved in digital payments. All the transactions in digital payments are completed online. It is an instant and convenient way to make payments.
Different Types of Digital Payments in 2019
From commonly used cards to newly launched UPI, digital payments has many types of payment. Some modes meant for tech-savvies and some for less-technical persons. Below are the different modes of digital payments.
UPI apps
UPI or unified payment interface is a payment mode which is used to make fund transfers through the mobile app. You can transfer funds between two accounts using UPI apps. You will have to register for mobile banking to use UPI apps. Currently, this service is only available for android phone users. Hence you can use UPI only when you have an android phone.
You need to download a UPI app and create a VPA or UPI ID. There are too many good UPI apps available such as BHIM, SBI UPI app, HDFC UPI app, iMobile, PhonePe app etc. It is not mandatory to use the UPI app from your bank to enjoy UPI service. You can download and use any UPI app.
UPI apps are a faster solution to send money using VPA or even IFSC and account number. But they have some limitations also. If you do not have an android phone you cannot use UPI app, It is not for you. Lack of stable internet connection can also cause trouble for these apps.
AEPS
AEPS is an Aadhaar based digital payment mode. The term AEPS stands for Aadhaar Enabled Payment Service. Customer needs only his or her Aadhaar number to pay to any merchant. AEPS allows bank to bank transactions. It means the money you pay will be deducted from your account and credited to the payee’s account directly.
You need to link your Aadhaar number to your bank account to use AEPS. Unlike Debit cards and USSD, AEPS does not have any charges on transactions. You can use AEPS with the help of PoS (Point of sale) machines. You can withdraw or deposit cash, send money to another Aadhar linked account with it. The good thing about AEPS is that it doesn’t need your signature, bank account details or any password. It uses your fingerprint as a password. No one can forge your fingerprints, thus it is the most secure digital payment mode.
USSD
NUUP (National Unified USSD Platform) service (also known as *99# service) is based on the Unified Payment Interface (UPI) service over USSD, initiated by the Government of India and developed by (NPCI) National Payments Corporation of India, to facilitate easy access banking services from mobile phones.
USSD (Unstructured Supplementary Service Data) banking or *99# Banking is a mobile banking based digital payment mode. You do not need to have a smartphone or internet connection to use USSD banking. You can easily use it with any normal feature phone. USSD banking is as easy as checking your mobile balance. You can use this service for many financial and non-financial operations such as checking balance, sending money, changing MPIN and getting MMID.
The *99# code works as a bridge between your telecom operator’s server and your bank’s server. It uses your registered mobile number to connect with your bank account. Hence, dial *99# with your registered number only. USSD banking has a transaction limit of Rs. 5000 per day per customer. RBI has also set a maximum charge of Rs. 2.5 per operation.
E-Wallets
E-wallet or mobile wallet is the digital version of your physical wallet with more functionality. You can keep your money in an E-wallet and use it when needed. Use the E-wallets to recharge your phone, pay at various places and send money to your friends. If you have a smartphone and a stable internet connection, you can use E-wallets to make payments. These E-Wallets also give additional cashback offers. Some of the most used E-wallets are State bank buddy, ICICI Pockets, Freecharge, Paytm etc.
E-Wallets are an easy and faster way to make payments but have some limitations. These apps are good if you send money to a wallet to another. But if you want to send money to a bank account these apps are not suitable. Also, you have to be extra careful with these apps. These apps do not ask for any PIN or password when you perform a transaction using your wallet money. If you do not lock your phone, anyone can use the money in your wallet.
Government’s support
The government is supporting digital payments a lot. It has reduced some taxes and announced incentives for digital payments. It has launched Lucky Grahak Yojna for customers and Digi Dhan Vyapar Yojna for shopkeepers. You can get cash prizes up to 1 crore if you pay digitally. Due to these incentives and waivers, more people are showing interest in digital payments.
BHIM
Bharat Interface for Money (BHIM) is a mobile app developed by National Payments Corporation of India (NPCI), based on the Unified Payment Interface (UPI). It was launched by Prime Minister Narendra Modi, at Digi Dhan mela at Talkatora Stadium in New Delhi on 30 December 2016. It was named after B. R. Ambedkar and is intended to facilitate e-payments directly through banks as part of the 2016 Indian banknote demonetisation and drive towards cashless transactions.
The app supports all Indian banks which use that platform, which is built over the Immediate Payment Service infrastructure and allows the user to instantly transfer money between bank accounts of any two parties.It can be used on all mobile devices.
BHIM allow users to send or receive money to or from UPI payment addresses, or to non-UPI based accounts (by scanning a QR code with account number and IFSC code or MMID (Mobile Money Identifier) Code).
Unlike mobile wallets (PayTM, MobiKwik, mPesa, Airtel Money etc) which hold money, the BHIM app is only a mechanism which transfers money between different bank accounts. Transactions on BHIM are nearly instantaneous and can be done 24/7 including weekends and bank holidays.
BHIM also allows users to check the current balance in their bank accounts and to choose which account to use for conducting transactions, although only one can be active at any time.
Users can create their own QR code for a fixed amount of money, which is helpful in merchant-seller-buyer transactions. Users can also have more than one payment address.
If the 12-digit Aadhaar number is listed as a payment ID, the BHIM app will not require any biometric authentication or prior registration with the bank or Unified Payment Interface (UPI).
Version 1.3 allows users to use mobile numbers from their contact book to send money and also save payment addresses for future use without needing to type the address again. User can also check the transaction history, which only shows transactions through BHIM.
-Available in 13 languages
GOOGLE PAY /TEZ
Tez was a mobile payments service by Google, targeted at users in India.It was rebranded to Google Pay on August 28, 2018.It operates atop the Unified Payments Interface, developed by the National Payments Corporation of India. It can be used where UPI payments are accepted. Tez works on the vast majority of India’s smartphones (with apps for both Android and iOS) .
The application does not require users to share any personal information such as mobile numbers or usernames like other payment applications, instead uses Audio QR codes that rely on sound transmitted at a frequency inaudible to the human ear from the payee handset to the merchant handset. This technology does away with the need for NFC chips on the handsets and holds an additional advantage because a significant number of smartphones in India and other developing markets do not have NFC chips embedded.
PAYTM
Paytm is an Indian e-commerce payment system and digital wallet company, based out of NOIDA SEZ, India.
Paytm is available in 10 Indian languages and offers online use-cases like mobile recharges, utility bill payments, travel, movies, and events bookings as well as in-store payments at grocery stores, fruits and vegetable shops, restaurants, parking, tolls, pharmacies and education institutions with the Paytm QR code.
