Different Modes of Digital Payments in India

The various modes of digital payments in India are steadily turning the country into a cashless economy. Almost 40% of transactions in the country are now done digitally. But what is cashless payment? What are the popular digital payment methods available in India? Let’s take a look-

What is Cashless Payment?

Cashless payments do not involve a physical exchange of money. So, any time you use a digital instrument to make a payment, you make a cashless transaction. It is also worth noting that digital payments are not limited to the payments you make online. Payments made at physical locations with Bank Cards or UPI also qualify as cashless digital payments. 

Different Modes of Digital Payments

• Unified Payment Interface (UPI)

The National Payments Corporation of India (NPCI) introduced the Unified Payment Interface (UPI) in 2016. It is a 24x7, instant, real-time digital payment system that is steadily replacing cash transactions. 

• Cards

Banking Cards like Debit and Credit Cards are among the most popular digital payment instruments. You can use these cards for online and offline shopping, bill payments, online investments, and more. 

• Mobile Wallets

Mobile Wallets, also known as e-Wallets or Digital Wallets, are virtual wallets used for online payments. You can link the Mobile Wallet to your Savings Account, Debit Card, or Credit Card for seamless mobile payments.  

• Mobile and Internet Banking

Internet Banking, also known as NetBanking, allows customers of banks and financial institutions to make financial transactions through various digital payment modes like NEFT, RTGS, and IMPS. You can also use it for non-financial transactions, such as viewing account statements, checking account balances, requesting new chequebooks, etc. 

• Banking App

Leading banks in India have their Apps to enable Mobile Banking. These apps let you perform many financial and non-financial transactions. Among popular financial apps, there is the BHIM App. Developed by NPCI, the BHIM App allows users to make UPI-based transactions.

• Bharat Bill Payment System (BBPS)

Conceptualized by the RBI and managed by NPCI, BBPS is an interoperable and integrated system created to make online bill payments easier, faster, and more secure. 

• Point of Sale (PoS) and E-commerce

Any time you use your Debit or Credit Card for payment in physical stores, the payment is processed through a handheld device known as a PoS terminal. Apart from handheld devices or physical PoS terminals, you can also find Mobile and Virtual PoS. Ecommerce apps nowadays also have the option of conducting transactions through various methods. You can enter your card details and transact without worrying as these transactions are conducted through secured payment gateways.

Unstructured Supplementary Service Data (USSD)

Different methods of digital payment, like USSD, have been introduced to provide underserved sections of society with access to mainstream banking services. Through USSD, people can use digital banking services without using mobile data or downloading any App, simply by dialling *99#. 

• Aadhaar-Enabled Payment System (AEPS)

AEPS was introduced to take advantage of the extensive reach and presence of Aadhaar in the country. If you have an Aadhaar-linked Bank Account, you can use AEPS for various banking services, like transferring funds to other Aadhaar-linked accounts.  

• Prepaid Cards

Bank Prepaid Cards are pre-loaded single-use or multi-use cards. Unlike a Debit Card, which is always linked to your Bank Account, a Bank Prepaid Card may or may not be linked to your Bank Account. 

Explore Digital Banking with AU Small Finance Bank

Thanks to all the different digital payment methods, our reliance on hard cash is lower than ever. If you’re looking to explore these popular modes of digital payments, AU Small Finance Bank can be an excellent choice. 

The leading Small Finance Bank offers an extensive range of Savings Accounts, feature-packed Debit and Credit Cards, AU 0101 App/ NetBanking, AU Video Banking, and WhatsApp Banking, allowing customers to make the best use of various methods of digital payments.