Introduction- India has always been extremely comfortable with the traditional method of making payments, which is “via cash”. Nevertheless, it is imperative to understand how digitization with regard to making payments has helped the country in numerous ways. It is a known fact that India has taken a sharp turn towards “becoming a cashless economy” after demonetization and it has nudged the country even more towards settling as a developed economy.
Digital India movement/initiative by the government has led to a humongous shift in the way Indians deal with making payments for purchases.
Benefits of digital payments
1. Digital payments allow buyers to pay directly from their banks.
2. Digital payments allow merchants to sell to other countries and customers to pay in foreign countries.
3. Tracks and maintains the digital record of every transaction
4. No fear of losing cash or getting fake currency
5. Merchants can collect payments remotely
6. Digital payments offer cashbacks or reward points
Ease of carrying out transactions
This is one of the major benefits of digital payments. For those who carry out transactions on a daily basis for buying some, or the other product or service, going digital is quite beneficial. It aids the user by giving an option that is safer, quick, and convenient during the traveling time.
It helps the user be free of carrying wads of cash, plastic cards (debit, credit, etc.) and even helps in letting go of queues for ATM withdrawals. Moreover, online payments can be carried out without any hassle during the times of emergency as it does not require one to be physically present anywhere for the money to be paid. E. g. Digital wallets: Digital wallets provide a quick, seamless and convenient way for merchants as well as customers
Better way to Observe Spending
With digital payments being convenient not only in other aspects but also in terms of keeping a record of the payments done so far, it is but easy to be accountable. When the payments are made via digital channel, it is easier to file income tax returns and also is easier to explain the spends in case of scrutiny.
Option to deactivate in case of theft or any accident
Payments have evolved from the barter system to cash to card payments to digital payments. According to Statist, in India, the total transaction value of digital payments in 2019 amounts to US$64,787 million.
Digital payments have the upper hand over making cash transactions since a digital payment platform can be blocked immediately in case of theft. But it is not the same with cash payments, since the cash once gone, has minimal to zero possibility of coming back to you. Moreover, carrying bundles of cash with oneself while traveling is never recommended and neither is easy.
Future of Digital Payments
Payments have evolved from the barter system to cash to card payments to digital payments. According to Statista, in India, the total transaction value of digital payments in 2019 amounts to US$64,787 million.
Many companies are developing the applications and methods more seamless for both customers as well as merchants. Now there is no need for customers to give their card information for digital payment (epos link), as for merchants, they can accept bulk payments, split payments with just a click (WhatsApp link). And everything is possible because of using means of digital payments.Many Payment services provide as well as financial institutions are opting for secure ways to make online payments secure for both merchants and customers.
Mr. Ashish Jain, Assistant Professor, School of Basic and Applied Sciences, Career Point University, Kota