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A Step Towards Digital India - Types of Digital or Cashless Payment Mode Available In India

A Payment system is well defined system which allows financial transaction between persons, businesses, organizations, individuals, institutions, etc. through a well organized and secured manner.
The traditional payment systems are checks, drafts, money orders, letters of credits, etc. Now the whole world is migrating from manual working system to computerized system that is why Payment systems also turning into electronic payment system using computer and internet. The most common electronic payment systems include Debit Cards, Credit Cards, Electronic Fund Transfer, Internet Banking, Unified Payment System (UPI), e-commerce payment system, internet banking, and *99# USSD based payment system.

Digital-India-Digital-Payment-System

There are two types of payment systems each have their own standards and procedures.

      ·         Physical Payment System
      ·         Electronic or Virtual Payment System

An electronic or digital payment system is a system through which buying and selling of goods and services performed through internet using different kinds of electronic fund transfer facilities. Or you can say that Electronic Payment is any kind of financial exchange between buyers and sellers.

Electronic Payment or Digital payment system includes:

Credit Cards:

                     image source: Google Image Search
Credit cards are the plastic cards having unique identification number attached with an account issued by Banks. Cards has inbuilt black magnetic strip which is used to read the cards through card reader. Credit cards have certain limit to purchase a product or service. Whenever a consumer pays for service or product through their credit cards then actually Banks pays money on behalf of that person to sellers. After a fixed time period customer will pay the credit card bill to issuer Bank.

Debit Cards:

Debit cards are also in the form of plastic cards issued by your Bank but it is directly linked with your Bank account. If you purchase anything and do payment through debit cards then the amount of paid money will directly debited from your Bank account immediately. For transaction through debit cards your Bank account must have sufficient amount of money else payment will be declined with a message – “In sufficient amount in your account.”  But in case of Credit cards Bank will pay that amount on behalf of you and you may pay that amount after a certain time.

Smart Cards:

Smart cards or Integrated Circuit Cards (ICC) have small microprocessor chips and circuits embedded within it. These cards also like credit cards or debit cards but are more secured because these cards kept information an encrypted manner. These cards have capability to store personal information or work related information in encrypted form. You may use smart cards using PIN. Some smart cards are like VISA cash cards, Infosys Smart Card issued by ICICI Bank for Infosys employees, Delhi Metro Smart Card, Mumbai Metro Smart Card, and State Bank Smart Payout Card, etc.

E-Money:

E-Money or electronic money is either exist in the Banking computer system or electronically stored in value cards. Money that is transferred electronically through internet without any human intervention is called e-money. You may refer e-money as electronic money, digital money, Digital cash, etc. e-cash is also form of e-money or electronic money. Examples of e-money are Digital Currency like Bitcoin, PayPal, ETF (Electronic Fund Transfer), Bank Deposit, etc.

Electronic Fund Transfer (EFT):

Electronic Fund Transfer is a type of E-Money. In the electronic fund transfer money is transferred from one financial institution like Banks to another using Internet and computer system. Financial Institutions could be same or different. This type of money transfer does not require any kind of human intervention. NEFT (National Electronics Funds Transfer), RTGS (Real Time Gross Settlement), IMPS (Immediate Payment Service) are the types of Electronic Fund transfer or ETF.

Unified Payment Interface (UPI)

UPI-Unified-Payment-Interface

Unified Payment Interface (UPI) is another way of Digital payment service. UPI or Unified Payment System is a mobile application especially for Android users as of now. This is a system that powers integration of multiple bank accounts into single mobile application. Almost every bank has UPI mobile app. UPI apps has many banking features, fund transfer, and merchant payment, etc. Currently UPI allows every bank to be registered as Payment Service Provider. UPI was launched by NPCI (National Payments Corporation of India) With RBI. UPI transfer cash using IMPS (Immediate Payment Service).

E-Wallets

E-Wallet-Cashless-Payment

E-Wallets are the digital wallets stored as an app in your smart phones. E-wallets stores or you may say link your credit and debit cards which you can use for digital payment. E-Wallets make your transaction faster because you don’t need to enter your cards information again and again. This also overcomes the fear of lost your cards. There are three types of e-wallets are available in the market, Open Wallet, Closed Wallet, Semi-Closed Wallet. To know more click here.

USSD Based Dial *99# Service

USSD - *99# Digital-Payment-Service

*99# is a USSD based mobile banking transaction service. This is most useful service for those who don’t have smart phones and using only basic phones. This service is offered by NPCI (National Payments Corporation of India) together with Banks and TSPs (Telecom service providers). You can use this service by just dialing *99# and you will be welcomed by NUUP service.

Aadhaar Enabled Payment System [AEPS]

Aadhaar-Enabled-Payment-System-[AEPS]

To make India as a cashless economy through digital or cashless transaction, Unique Identification Authority of India (UIDAI) will soon launch AEPS – Aadhaar Enabled Payment System in the form of android application which will be installed on the smart phones just like UPI app. This system will work like banking model for financial transaction at PoS (MicroATM) through business correspondent of any bank using Aadhaar authentication. Using this mobile based application you can do,
      ·         Balance enquiry,
      ·         Cash Withdrawal,
      ·         Cash Deposit,
      ·         Aadhaar to Aadhaar fund transfer

      Three things needed to verify the transaction:

      ·         IIN (Identifying the Bank through which customer is associated)
      ·         Aadhaar Number
      ·         Fingerprint captured during the enrollment of Aadhaar card.

RuPay

RuPay
The term RuPay made from two words – Rupee and Payment and orange and green arrows indicates a nation on the move and the service that matches its pace. The blue color shows the feeling of tranquility which the people must get while having RuPay card. This is promoted by RBI as a body including 10 core promoters, State Bank of India, Panjab National Bank, Canara Bank, Bank of Baroda, and Union Bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank and HSBC.

Bharat Bill Payment System

BBPS-Bharat-Bill-Payment-System

Bharat Bill Payment System (BBPS) is an integrated bill payment system in India. Payments may be made through BBPS using cash, transfer cheques, and electronic modes.
Note: I took references from NPCi and some other government portals.

Keywords: E-Wallet, Digital-Wallet, PayTM,Android-Pay,Google-Wallet, Digital-Banking, Dial-*99#, Digital-India



This post first appeared on DigiTeck - World Of Digital Technology, please read the originial post: here

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A Step Towards Digital India - Types of Digital or Cashless Payment Mode Available In India

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