Saturday , June 10 2023

10 Secure Cashless Payment Methods for Cashless Transaction in India

Modi government’s strive for digital India has taken a fast pace after demonetization announced on 8th November, 2016. ‘Less-cash’ or ‘Cashless’ has emerged as the new buzzword in the Indian economy. Due to less cash available in the banking system everyone is searching for cashless mode of payments. Online payments and debit & credit cards payments were the well-know available options for cashless transaction in India. The new terms introduced in Digital payments system are UPI, USSD, MMID, AEPS and E-Wallet, these are mobile based convenient options for electronic payments or new types of cashless transactions introduced. Here i am going to explain various electronic payment options available in India and also promoted by Niti ayog as a secure digital payments options.

The 10 best cashless payment options available are

1. Cheque

2. Demand draft

3. Net banking/Online payment

4. Debit cards/ATM cards

5. Credit Cards/Travel Cards

6. Gift Cards/Prepaid cards

7. E-Wallet

8. Unified Payment Interface (UPI)

9. Aadhar Enabled Payment System (AEPS)

10. Unstructured Supplementary Service Data (USSD)

These payment options are authorised payment systems in the country and Reserve Bank of India as the central bank of India has taken several initiatives to make it Safe, Secure, Sound, Efficient and Accessible. Payments through Cheque and Demand Draft are most safe but you need to go to bank for the amount to be credited in your account.  Online transactions or Net banking are used for e payments or direct account transfer. However these methods are rarely used for physical payments at shops and grocery outlets. Debit cards, Credit cards and Gift Cards serve most of the purpose and therefore called as plastic money. These cards can be easily carried in wallet or purses and used to pay or shop anywhere.

Plastic money or cards has limitation, a merchant need to have a  Point Of Sale (POS) or swipe machine to accept the payments. Therefore government has introduced mobile app based transactions which are not only convenient but also widely acceptable due to mobile platform.

1. Payment Through Cheque

Transaction Process
Cheque book issued by your Bank
    • Sign your Cheque in the name of payee to whom payment is to be made.
    • You need to go to bank to deposited Cheque and credit money in amount.
Cheque may bounce due to insufficient fund


2. Payment Through Demand Draft

Transaction Process
    • Account information of payee (to whom payment is to be made)
    • Self Account details or Cash money.
    • A bank issues a demand draft to a client (drawer), directing another bank (drawee) or one of its own branches to pay a certain sum to the specified party (payee).
    • Transaction fees is applicable other than transaction amount.
You need to visit bank to issue demand draft or deposit money in account.


3. Online Transaction Through Net Banking

Transaction Process
    • Activation of Net banking facility
    • Internet facility in PC or mobile.
    • First add the bank Account of payee in fund transfer page of your bank portal.
    • Adding payee take time, exact time vary from bank to bank.
    • Transfer of fund is carried out using NEFT, RTGS, IMPS mode.
    • Takes time to add payee.
    • Not instantaneous for inter bank transfer


4. Payments Through Debit/ATM Cards

Transaction Process
    • Issue of Debit Cards by Bank. Card Pin/password or mobile for OTP (One Type Password) verification.
    • Bank ATMs
    • Swipe machine or POS (Point of Sale) machine at merchant.
    • Online payment portal
    • Bank issue ATM card with a PIN no.
    • Used to withdraw cash from any ATM machine using PIN no.
    • Used at any POS for shopping. Also for online shopping
    • SMS notifications comes in mobile for every transactions.
    • POS of Swipe machine at merchant is a must.
    • Cloning of card is a security threat.

5. Payments Through Credit Cards

Transaction Process
    • Issue of Credit Cards by Bank. Card Pin/password or mobile for OTP (One Type Password) verification.
    • Swipe machine or POS (Point of Sale) machine at merchant.
    • Online payment portal
    • Bank issue Credit cards with a PIN no to only eligible customer.
    • There is credit limit for issued cards, limit vary from person to person depending upon income.
    • Used at any POS for shopping. Also for online shopping or transaction.
    • Every month Bill is generated, the total dues is to be paid before the due date, otherwise interest is charged.
    • SMS notifications comes in mobile for every transactions.
    • Every card has a credit limit, beyond that you cannot shop.
    • Cash withdrawal is possible but at huge interest rate.
    • POS of Swipe machine at merchant is a must .
    • Cloning of card is a security threat.


 6. Payments Through Gift Cards or Prepaid card

Transaction Process
    • Issued by Bank just like Debit or Credit card but with a fixed amount for spending.
    • Can be used at Swipe machine/ POS (Point of Sale) or ATM.
    • Bank issue Prepaid Card on request.
    • Generally used for gifting or corporate incentive payouts.
    • Fixed amount is loaded in card and can be used as debit /credit cards for spending.
    • Cash withdrawal is possible just like debit cards.
    • Every card has a limit, beyond that you cannot spend. Maximum limit is Rs 100000.
    • The amount is loaded in advance for spending. Not linked to any bank account like debit cards.


 7. Payments Through E-Wallets

Transaction Process
    • Online Account in Digital Wallet. For example few popular e wallets are PayUmoney, Paytm, Pockets, Oxygen wallet, Mobiwiki etc.
    • A mobile phone with wallet app loaded. Bank wallets are also used operated through desktop PC.
    • Internet connection.
    • Download wallet app in mobile and create account using mobile no. Mobile number is treated as wallet account no.
    • Load money using debit/credit card or net banking.
    • Link your bank account with digital wallet to transfer money in advance to your wallet.
    • Transfer money from one wallet to other using mobile number.
    • 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
    • Money can be transferred to same company wallet.


8. Payments Through UPI (Unified Payment Interface)

Transaction Process
    • A Bank account for registration only
    • Any smartphone with internet connections 2G/3D/4G/wifi.
    • UPI Apps of bank (28 banks have enabled upi)
    • Download bank UPI app of mobile banking apps of banks
    • Register by creating your  Virtual Payment Address  (VPA) e.g lokesh@icici or mitesh@sbi
    • For money sending you just need the VPA of payee
    • After entering amount and VPA of payee you will be asked for confirm payment and it is done.
    • Account details of payee is not required only VPA is required
    • Maximum transaction limit is Rs 1 lakh
    • Sender and Receiver of money must have VPA (Virtual Payment Address ) for fund transfer
    • Smartphone is required


9. Payments Using Aadhaar Card (Aadhar Enabled Payment System, AEPS)

Transaction Process
    • Aadhaar Card
    • PoS (MicroATM)
    • Go to a MicroATM or banking correspondent
    • Provide your bank name and Aadhaar
    • Choose which transaction to do
    • Provide finger print on scanner
    • on successful transaction, take the print slip
    • Process completed
    • Micro ATMs are required
    • There is limitation on banks called as Net Debit Cap (NDC), It is net of total outward and inward for the day.


10. Payments Through Mobile (Unstructured Supplementary Service Data, USSD)

Transaction Process
    • A Bank account
    • Any mobile phone on GSM network.
    • Link your mobile number with your Bank account. Can be done at Bank, ATM or online.
    • After registration you will get Mobile Money Identifier (MMID) and Mobile PIN (MPIN)
    • To transfer fund, Dial *99# from your phone → *99#
    • Enter first 3 letters of your Bank name or 4 letters of IFSC code →SBI or SBIN
    • Enter your options for Bank → 3 (for fund transfer)
    • Enter beneficiary 10 digit mobile no → xxxxxxxxxx
    • Enter beneficiary MMID no → xxxxxxx
    • Enter [Amount to be transfer] [Remarks] →[2500] [rent]
    • Enter 4 digit MPIN and last 4 digit of your A/c no. separated by single space→1234 5678
    • Message is received for transaction done.
    • Other services are
      1. Balance Enquiry
      2. Mini Statement
      3. Fund Transfer-MMID
      4. Fund  Transfer-Account No
      5. Fund Transfer-Aadhaar
      6. Know MMID
      7. Change MPIN
      8. Generate OTP
    • Maximum limit of payments per day per customer is Rs 5000
    • You need to remember MPIN as well as last 4 digit of your account

Authored by howtocalculate

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