With very little usable cash in their pockets, people can minimise their problems by putting debit/credit cards and smartphones to smarter use.

Plastic Cards: There are three types of plastic cards — debit card, credit card and prepaid cards. Debit cards are issued by banks and they are linked with your bank accounts. Use them to directly charge your bank account against your purchases. Credit cards provide you zero-cost credit to finance your purchases for a certain period. Make sure to pay the outstanding amount by the due date, failing which will attract hefty finance charges (25–46% per annum) and late fee. Prepaid cards act like all other prepaid services. You have to first recharge your card and then make transactions.

Mobile-wallets: M-wallets can be considered as a digital version of your traditional wallet. Download the m-wallet apps on your mobile, save your bank account or credit card details on your m-wallet and then transfer money from those accounts or cards to your m-wallet. With m-wallets, you can pay your utility bills, refuel at petrol pumps and buy groceries at both organised retail stores and neighbourhood kirana store.
Unified Payments Interface: It is a 24×7 online payment system that allows you to send/receive money through your Android-based smartphones. This system is directly attached with your bank account and hence, money will be debited/ credited directly from your account. Currently, this platform is available to customers of around 23 banks.
Transacting through UPI is quite simple. Just download the UPI app, choose a virtual payment address (VPA) and set a 6-digit mobile pin (MPIN). You can make payment by entering the VPA number of the other party involved and the amount required to be paid. Unlike NEFT/RTGS system, you don’t have to register payee’s details in case of transacting through UPI. The entire transaction can be completed in less than a couple of minutes.
While the demonetisation move is targeted at mopping up black money and fake currency in circulation, it is also expected to speed up the adoption of cashless payment systems. Wherever possible, try to use your cards for
purchases. If your neighbourhood grocery store does not have card-swiping machines, convince them about the benefits of UPI and m-wallets. Their low cost structure, coupled with the speed and ease of installing them, might convince them to go for digital payment systems and provide you an alternative to carrying cash.
The writer is CEO & co-founder,
Paisabazaar.com