5 reasons why going for digital payments makes more sense

Updated: August 29, 2018 12:07 PM

Against the backdrop of demonetization, there emerged a new set of consumers and merchants who were either unaware of or unaccustomed to digital payments. Here are some reasons why it makes sense to go digital.

digital payment, digital payment india, digital payment methods, digital payment app, security, Consumer Safety, ProtectionDigital Payment: Adopting digital payments also benefits the country immensely.

India is at a cusp of a big change, going from the earlier 97% cash-based economy to becoming a ‘less-cash’ economy. Against the backdrop of demonetization, there emerged a new set of consumers and merchants who were either unaware of or unaccustomed to digital payments, inducing the need to educate ‘newbies’ about why it could simplify life for everyone. Here are some reasons why it makes sense to adopt digital payment methods:

1. Convenience & Speed

The most basic reason why one should go digital is the sheer ease it brings. Numerous forms of digital payments made it more convenient – paying bills online or on your mobile, buying a public transport ticket with an e-wallet or using a tap-and-pay card for a purchase – has all been reduced to a matter of seconds. Digitally, you can pay for anything down to the exact paisa vis-à-vis shuffling for exact change.

2. Security

Payment regulations in India are governed by a forward-looking, yet cautionary body that is concerned with the protection of its citizens. It has introduced various measures to safeguard transactions and continues to do so regularly. Additional Factor of Authentication (AFA) and real-time transaction alerts were the first few steps. This was enhanced further with biometric/Aadhaar-based authentication and robust fraud mitigation measures.

3. Consumer Safety & Protection

Along with proactive measures like the above, there are redressal mechanisms that safeguard consumers in case of breaches. When you lose a wallet/cash, you know that it is all gone. With digital payment instruments, it is simpler – you lose it, you block it – limiting your financial exposure. You can also raise chargebacks and disputes over transactions that you are erroneously been charged to you. If you face a fraud and report it in time, there is a liability to pay you back as well.

4. Financial gains

To popularize digital payments, the government and payment instrument issuers are incentivizing customers through cash back schemes and discounts. Some provide loyalty programs based on your usage of the instrument. You can choose from various payment options based on your specific need and if there is a monetary gain, why not avail it? Payment service providers have also started providing insurance on payments and against frauds, cushioning your risk.

5. No Financial Leakages

With a large country like ours, there are many leakages in transfers especially to the less savvy. Initiatives like the Direct Benefit Transfers (DBT) and Public Distribution System (PDS) improve point-of-sale traceability and help customers receive the benefits and subsidies earmarked for them, without bureaucracy or leakage. A transparent electronic trail helps track expenses and subsidy transfers to the last mile.

Adopting digital payments also benefits the country immensely. In Financial Year 2015-16, more than Rs 730 crore was spent in printing currency notes. These costs of printing and handling cash can be reduced with less cash usage. Also, the lower the cash, the lower the possibilities of funding terror attacks/antisocial disruptions. Lastly, battling counterfeit currency will also be easier when the cash itself is discouraged.

(By Vishal Maru, Head-Merchant Services, Digital Payments & Loyalty Business Division of Worldline South Asia and Middle East)

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