This big step taken by the Modi government will nudge people towards making digital transactions, with more people using virtual wallets and other digital modes of payment.
India, however, is an economy where cash is still the king. So this sudden shift may lead to some teething troubles. Here's help. We tell you how to manage your everyday transactions.
Unified Payments Interface (UPI):
UPI allows easier real-time transfer of money between bank account using smartphones. It is being touted as the biggest invention since ATMs. It has come to be a buzzword in the banking circles since its official unveiling on April 11. UPI allows a customer to pay directly to different merchants, both online and offline, without the hassle of typing card details, IFSC code or net banking or e-wallet passwords.
To use this app, the bank customer just needs to download the UPI-enabled app on his/her Android smartphone. To use this facility, the customer must have a bank account and a registered mobile number.
If you have these, you can create a virtual ID on the app or use your IFSC code and bank account number to complete the transaction.
A bank customer can use any bank's UPI app as per his/her choice.
E-wallet is an online prepaid account where one can store money, to be used when required. As it is a pre-loaded facility, consumers can buy an entire range of products from airline tickets to grocery without swiping a debit or credit card.
You can log on to sites ranging from telecom service providers, online grocery stores, recharge portals to even sites selling furniture that use e-wallet as an alternative payment option and get started on saving. The sites where e-wallet services are available generally have a few easy steps to get started.
What are the benefits
The sites where e-wallet services are available generally have the following easy steps to get started. They make for ease of use without having to enter your debit/credit card details for every online transaction.
For some sites there is no minimum amount. You can deposit an amount as low as Rs 10. You can pass on the benefits of your e-wallet to your friends and family as well. There is no chance of a decline of payment since e-wallet is a prepaid account.
Who offers e-Wallet
Some of the popular e-Wallets are: Paytm, Freecharge, Airtel, PayU Money, Oxygen, Wallet, Chillr, MobiQuick
Another option to transfer money from one account to other is through internet banking. There are three services available for such transfer: National Electronic Funds Transfer (NEFT), Real-time Gross Settlement (RTGS) and Immediate Payment Service (IMPS).
With IMPS one can transfer the money instantly and the service is available 24x7. The maximum amount one can transfer through IMPS is Rs 2 lakh. The transaction cost is usually around Rs 5 to Rs 15 depending on the value of the amount transfered.
In NEFT, the money gets transfered to another bank account during bank working hours in hourly batches. NEFT transactions cost between Rs 5 and Rs 25 depending on the value of the amount transfered. RTGS is for high value transactions-starting at Rs 2 lakh. And it costs Rs 30 to Rs 55 depending on the value of the amount transfered.
There are three types of plastic cards available - Credit card, Debit card and Prepaid card. Debit cards are issued by the banks and they are linked to your bank account. Credit card are issued by banks and other entities. Prepaid card are alternative to cash and cheques and are issued by banks.
Prepaid card are very similar to prepaid mobile phone cards. All you have to do is buy a card and load it with the desired amount and the card is ready for use. One does not require any account to use these cards.