Tangible cash has become vulnerable. Buyers and sellers want something that is more secure and encrypted, that is where digital payments come into the scene and save the day. Digital platforms are doing a great job in connecting the world. Due to technological advancements, several breakthroughs, and watershed advancements have occurred in the payment domain. Fintech businesses are the flag bearers of these enhanced services. Multiple digital payment startups are facilitating and elevating payment gateway services. A considerable part of these startups covers the plethora of ways in which money transfers can be carried out.
In India, elevating the services of digital payments was prioritised after the demonetization and cash-related issues ensued. Several steps have been taken in the direction of the growth of digital payment systems across the nation. The nation is striving to transform itself into a ‘Faceless, paperless, and cashless’ ecosystem. Digitization is facilitating a revolution across ample domains. The digital payment domain just happens to be one such domain that is taking the world by storm. Let us try to understand the nooks and crannies of this enigmatic domain and evaluate it in depth. Read till the very end.
What exactly are digital payments?
Digital payments are nothing but transactions that are made with the aid of online channels without the use of tangible money/currency. This implies, both the parties, namely the buyer and the seller can make use of electronic conduits to exchange money. The rapid adoption of technological gadgets such as mobile phones and the soaring popularity of e-commerce websites are not the only aspects responsible for making digital payments popular. The other factors that have influenced the rise of digital payment systems have been listed below:
- The entry of new competitors
- The hassle involved in carrying out payments involving tangible cash
- The streamlined nature of traditional payments
- Collaborative as well as out-of-the-box innovations
- Technological advancements and the need to adapt to them
- The evolving preferences and expectations of customers
- Seamless and hassle-free execution of modern payment methods
Related Article: India’s unconventional shift to adopting Digital Payments
Why are Digital payments vital?
In a nation like India, establishing a uniform financial coequality is crucial. One of the most integral reasons why the government backed the growth of a digital ecosystem revolving around finances was to make financial resources more accessible to each and every citizen in the country. Depending on the channel you wish to use, digital payments are made by transferring money from the user’s bank account through an internet-secure banking network.
This helps make the entire procedure of transaction user-friendly, efficacious, and seamless. For your convenience, we have compiled a list of factors that are contributing to making digital payment ecosystems indispensable.
- Cash has become obsolete, primarily after the pandemic. Such a situation demands secure, demand-oriented, and user-friendly payment options.
- These payment methods can be accessed by anyone from anywhere across the globe. Location does not bind the performance of these payment methods.
- They make transactions hassle-free and rapid. One of the most popular reasons digital payments are becoming popular is because of the fact that they save valuable time without compromising efficiency and accuracy.
- Digital payments are safer, easier to process, and cheaper as compared to traditional methods of payment.
What are the various modes of Digital Payments?
We are now going to list some of the most common and efficient digital payment methods in India that are time-saving and convenient. Read on and update your Fintech IQ.
- Mobile Banking: Mobile banking tops the list when it comes to efficient digital payment ecosystems. It refers to the use of e-banking services like RTGS, IMPS, and NEFT. These modes are used to carry out transactions and transmit money around the globe, with the aid of your online banking forum. Most people and businesses use the mobile banking method for safe and smooth transactions.
- Unified Payments Interface (UPI): This digital payment method is soaring in popularity due to its ease of use and smooth execution. It has become the most widely used digital payment ecosystem. An array of user-friendly mobile applications enable account holders to make direct transactions from their bank account in a fraction of seconds using the verification undertaken during their account setup regimen. If you want rapid transactions that are secure and accountable, UPI is the option for you.
- Banking Cards: Debit cards and credit cards are some of the earliest modes of digital payments. They facilitated the rapid growth of the digital payment domain and familiarised the masses with the concept of digital payment. Even today, they have a significant grip on people. Their curation was essential to move mountains in the direction of digitization of transactions.
- Unstructured Supplementary Service Data (USSD): It is a digitised model of payment that does not require the internet. You can just call on a standard code from an authenticated phone network and conveniently avail yourself of its services. It is convenient and a life-saving technological advancement for people where internet services are haphazard and irregular.
What are the perks of Digital payments?
People from all walks of life and career can make use of digital payments to make life easy. Ordinary people, businesses, development entities, governments, and so on, all benefit from the services provided by digitised payment methods. Businesses can optimise their services by using digital payments to the fullest. The following are some of the perks of digitising payments:
- Higher efficiency and receptiveness helps in cost saving
- Promotes inclusion and parity on a financial level and elevates access to a variety of financial services like savings, insurance, credit, and so on.
- All-inclusive growth and financial parity encourage the movement of income by enabling economically weaker sections to contribute to the economy on a grassroots level.
- Security, transparency, and accountability are ensured. Rapid tracking and increasing levels of accountability reduce fraudulent transactions and theft.
- Need for contactless payments. The ongoing pandemic has brought digital payments into the clear limelight. Digital payments ensure contactless payments, smartly limiting in-person contact.
The app-based economy is rapidly becoming the new normal. To stay in the competition, it is necessary to adapt to the changes that are being made in the fintech world. To eliminate the uncertainties people have regarding digital transactions, banks and fintech companies are aiming to strengthen their backend by collaborating with the best service providers. This is being done to optimise and streamline the pre-existing services. ‘Going digital is no longer an option, it is the default. Make payments secured and fast with Payomatix