Digital payments are the payments which are made digitally. The payments which are done in digital form are known as digital payments. Now-a-days digital payments are made useful by almost everyone. The payments made digitally saves time of the people. The digital payments are made simple for the people. The usage is also very simple and easy. Government of India has started adopting digital payments in implementation of Bhim UPI and many more projects, digital payments are considered to be modern age technology saviors.
The Government of India has been taking several measures to promote and encourage digital payments in the country. To put it in, simple words, a digital payment occurs when goods or services are purchased through the use of various electronic measures. Digital payment is the payment which is made digitally which the help of technology. There is no use of cash or cheques in this type of payment method, a cashless economy wherein all transactions are carried out using different types of payment method and does not involve the physical use of money for the purchase of various goods and services. As part of ‘Digital India’ campaign, the government aims to create a ‘digitally empowered’ economy that is paperless, cashless.
Please note that digital payments can take place on the internet as well as on physical premises. For example, if you buy something from Amazon and pay for it via UPI, it qualifies as a digital payment. Similarly, if you purchase something from your local Kirana store and choose to pay via UPI instead of handing over cash, that also is a digital payment.
What are the different methods of digital payments?
After the launch of Cashless India, we currently have ten methods of digital payment available in India. Some methods have been in use for more than a decade, some have become recently popular, and others are relatively new.
- Banking Cards
Indians widely use Banking cards, or debit/credit cards, or prepaid cards, as an alternative to cash payments. Andhra Bank launched the first credit card in India in 1981.
Cards are preferred because of multiple reasons, including, but not limited to, convenience, portability, safety, and security. This is the only mode of digital payment that is popular in online transactions and physical transactions alike. Nowadays, many apps are being launched with the sole purpose of managing card transactions like Cred, Square, etc.
2. Unstructured Supplementary Service Data (USSD)
USSD was launched for those sections of India’s population which don’t have access to proper banking and internet facilities. Under USSD, mobile banking transactions are possible without an internet connection by simply dialing *99# on any essential feature phone.
This number is operational across all Telecom Service Providers (TSPs) and allows customers to avail of services including interbank account to account fund transfer, balance inquiry, and availing mini statements. Around 51 leading banks offer USSD service in 12 different languages, including Hindi & English.
3: Aadhaar Enabled Payment System (AEPS)
AEPS is a bank-led model for digital payments that was initiated to leverage the presence and reach of Aadhar. Under this system, customers can use their Aadhar-linked accounts to transfer money between two Aadhar linked Bank Accounts. As of February 2020, AEPS had crossed more than 205 million as per NPCI data.