Cash shortage after Demonetisation Rs 500 and 1000 banknotes has effected the entire nation. Long queue outside Banks and ATM shows how day to day life of people is effected. Demonetization not only effected the small entrepreneurs, agriculture and transportation but also the industries and the sensex.
Beyond all difficulties, support and criticism of Demonetization, it pushed the growth of digitalization and has led to the growth of Digital payments. Digital payment will boost a transparent and accurate transaction. On the other hand it will also lead to the government goal to move to a cashless nation, a strong Indian Economy and a vision to achieve Digital India.
Increase in Digital Payments has led a digital battle among the Banking and non-banking Industries across the country. Though Banks are coming with different new technologies to enhance their services but to win Digital battle, Banks has to offer strong payment plans. Banking Industry need to move rapidly to react this digital transformation.
Banking industry are offering various online services like internet banking, mobile banking etc which is secure, convenient and powerful way of transaction. Through digital banking customers can access their account from their laptop and smart phone from anywhere and anytime.
With a rapid change of mode of payments, no doubt Digital banking will play a vital role in banking industry in future. Following are new ways to make very convenient transactions in India:
UNIFIED PAYMENT INTERFACE (UPI) – It was launched by National Payments Corporation of India (NPCI) with Reserve Bank Of India build on Immediate Payment Service (IMPS). UPI allows several banking services with multiple bank accounts in a single mobile application.
UPI platform can be used for:
- A virtual address will be needed instead of Name, Account number, IFSC etc.
- Immediate money transfer anytime through mobile.
- Different Bank accounts could be added in a single mobile app.
Unstructured Supplementary Service Data (USSD) – USSD codes are used in Mobile for transactions also. You can do transaction with USSD (*99#) without internet.
Aadhaar Enabled Payment System – This system allows to transfer money using Aadhaar Number. To activate this service Aadhaar card should be is linked with the Bank account. Aadhaar Enabled Payment System will be the most secured financial transaction method as finger prints will be used for authentication.
E –WALLET – It is an app through which debit or credit card is linked and can be used for cashless payment.
Payments By CARDS – In Card payments, PoS terminals are used to swipe the card (Credit Card, Debit Card, Prepaid Card etc.) followed by entering the PIN to complete the cashless transaction.
Also Read: 6 Best Ways to do Cashless Transactions – Safely
Going Digital will make the Indian banking industry strong and healthy .Shifting towards digital payment shows the changing dynamics of Indian Banking.But at the same time it also points out some challenges, banks will face in the transformation.
- Almost half of the Indian citizens are cash dependent with no bank a/c.Banks would face burden to open numbers of account at the same time.
- Uneducated and unfamiliar customers towards digital technologies.
- Security is the most important challenge Banks will face towards customers account as it will help to gain and redeem loyal customers.Banks have to educate and assure people so that they may not be trapped by cyber attackers.
- Establishing PoS terminal is the other important challenge especially in rural areas.At present no. of ATMs and PoS terminals are quite low.It should be increased by 3 to 4 times by number.
- Connectivity is the major issue banks will face by going digital. Problem of low internet connectivity,speciall y in rural areas should be improved.
- Cards extra charges should be reduced as lower middle class and lower class people will face burden to pay extra.
The path of digital payments in bank is not going to be easy but it will be more convenient for the user. It will reduce queue outside banks and ATMs in coming days. Banks may appear hard time to implement fully but once implemented it will be a easy way to manage accounts.
