The sudden disruption caused by the demonetization of high-value currency notes led people to consider several alternatives to cash. While cheques were always popular, it has been the electronic mobile-based transactions that attracted people most because of their instant nature and simple format. Apart from them, there are some other methods. Here we are taking a look at some of them:
1. NEFT, RTGS: Post the note ban by the Modi government, NEFT (National Electronic Fund Transfer) and RTGS (Real Time Gross Settlement) gained in popularity. More so did IMPS (Immediate Payment Service) that was not restricted by banking hours and office times, but happened instantly in real time. Thankfully, some banks have also significantly reduced their NEFT and RTGS charges recently, making them more acceptable to customers for making digital payments or fund transfer.
2. E-wallets: E-wallets or mobile wallets have gained huge acceptance post demonetisation. According to a research report by Deloitte, the value and volume of mobile wallet transactions have more than doubled in the last year alone. Increased adoption of smartphones and mobile data packages has been one of largest contributors to this growth and as the penetration of the technology increases and mobile data costs come down, the industry is primed for further growth. In fact, transaction volumes are expected to grow at a CAGR of 94% between FY17 and FY21 to reach 32 billion transactions. Value of the transactions is also expected to rise at a rate of 126% to reach Rs 32 trillion by the fiscal year 2021.
3. UPI: Among other digital payments, the Unified Payment Interface (UPI) has also made its mark. Although e-wallets have gained huge acceptance, the real winner is said to be UPI, which grew steadily over the last one year. Being linked to your actual bank account, UPI enables you to make transactions directly from your bank account without the use of mobile wallets. The UPI platform compares favourable to e-wallets on many parameters. The government has also launched its Bharat Interface for Money (BHIM) app, which is a mobile payment app which aggregates the UPI-based services offered by all banks.
4. Debit and Credit Cards: Credit and debit cards were being used earlier also for making cashless payments. However, post demonetisation, their usage increased substantially. In fact, “both customers and businesses started accepting debit cards and credit cards in equal measure, making transactions simpler. Credit card companies are now even relooking at the eligibility criteria and terms and conditions to make them available to a larger set of customers,” says Adhil Shetty, CEO, BankBazaar.com.
5. Gift Card: Instead of paying cash, you can also gift someone a gift card. The pre-paid gift card is a smart gifting solution which essentially works like a gift voucher. You can buy it from a bank by paying the value of the card. Once the bank receives the required fund, the card is activated with the loaded amount. The recipient of the card will be able to use it across merchant outlets which accept that particular type of card.