Digital Payment System

1. Digital Payment System • With the spark in use of cashless money, digital payment system has become a very popular and effective method of payment. Digital payment system delivers a number of benefits to both payers and payees. There is a number of effective digital payment medium, which safe and secure.   Advantages of Digital Payment System • Easy and convenient: No need of cash money. Only need to use mobile apps, cards, and digital links. • Payment from anywhere: Using digital payment modes, one can pay from anywhere anytime. • Tax concession: If payment done through digital mode, there are discounts available up to certain amount of payment. • Less risk: Payment through digital mode is safer if handled wisely.  • Drawbacks of Digital Payment System • Technical difficulty: As most of the system is operated through technical tools, non-technical persons find it difficult to handle. • Risk of data theft: There are risks that come from password sharing, data hacking etc. • Overspending: As digital payment is easier and useable from anywhere, there is a tendency of overspending.

2. What is a Digital Payment System? Digital payment is a method of payment through digital way. Both payer and payee use digital modes for sending and receiving money in digital payments. Electronic payment is also called. There is no hard cash involved in digital payments. All digital payment transactions are completed online. It’s a convenient and instant way to make payments. A Few Examples of Digital Payment Medium UPI Apps: UPI or unified payment interface is a payment mode used for fund transfers via mobile app. Through UPI apps funds can be transferred between two accounts. In order to use UPI apps, one must register for mobile banking. At present, this service is only available to Android phone users. There are a number of good UPI apps available, including BHIM, SBI UPI app, HDFC UPI app, iMobile app, PhonePe app, etc. AEPS: AEPS or Aadhaar Enabled Payment Service is a digital payment mode, where one has to link his/her Aadhaar number to their bank account. The customer only needs the Aadhaar number to pay to any trader. AEPS enables bank transactions. It means that the money one has to pay will be deducted from his/her account and credited directly to the payee’s account.

4. USSD: USSD Banking or* 99 # Banking is a digital payment mode based on mobile banking that one can easily use with any normal feature phone. One has to connect his/her registered mobile number with their bank account. One can use this service for many financial and non- financial operations, such as balance checks, money transfers, MPIN changes and MMIDs. Credit Cards: Credit cards are issued by banks and certain other RBI licensed entities. Using these cards one can withdraw or use additional money. For domestic and international payments, credit cards are used. Debit Cards:  Debit cards are issued by the bank account one holds. One can use these cards for the money in the account. While one pays through these cards money is debited from their account and credited to the payee’s account immediately. These cards are also can be used to make payment from one bank account to another.  Prepaid Cards:  Prepaid cards are another type of cards that can be used for making digital payment. One must have to recharge these cards before using it. 

5. E-Wallets: E- Wallet or mobile wallet is like the digital version of the physical wallet with more functionality. One can keep and use the money in an e- wallet when necessary. E- Wallets can be used to recharge phone, pay in different places, and send money to friends. ICICI Pockets, State bank buddy, Freecharge, Paytm etc. are some commonly used E-Wallets.

6. Key Points A few different modes of digital payment: UPI Apps: UPI or unified payment interface is a payment mode used for fund transfers via mobile app. Through UPI apps funds can be transferred between two accounts. There are a number of good UPI apps available, including BHIM, SBI UPI app, HDFC UPI app, iMobile app, PhonePe app, etc. AEPS: AEPS or Aadhaar Enabled Payment Service is a digital payment mode, where one has to link his/her Aadhaar number to their bank account. The customer only needs the Aadhaar number to pay to any trader. It means that the money one has to pay will be deducted from his/her account and credited directly to the payee’s account. USSD: USSD Banking or* 99 # Banking is a digital payment mode based on mobile banking that one can easily use with any normal feature phone. One has to connect his/her registered mobile number with their bank account. One can use this service for many financial and non- financial operations, such as balance checks, money transfers, MPIN changes and MMIDs. Credit Cards: Credit cards are issued by banks and certain other RBI licensed entities. Using these cards one can withdraw or use additional money. For domestic and international payments, credit cards are used.

7. Debit Cards:  Debit cards are issued by the bank account one holds. One can use these cards for the money in the account. While one pays through these cards money is debited from their account and credited to the payee’s account immediately.  Prepaid Cards:  Prepaid cards are another type of cards that can be used for making digital payment. One must have to recharge these cards before using it.  E-Wallets: E- Wallet or mobile wallet is like the digital version of the physical wallet with more functionality. E- Wallets can be used to recharge phone, pay in different places, and send money to friends. ICICI Pockets, State bank buddy, Freecharge, Paytm etc. are some commonly used E-Wallets. Published by Brainware University