Why Cash Is No Longer King In The Market
New Delhi, India
Cashless society are often defined as an economic concept where all the financial transactions happen through the online mode or transfer of digital information instead of physical money.
Types of cashless payments
There are many different ways by which we'll make payments without cash. variety of them are as follows:
Banking cards like Debit and credit cards are one among the foremost used cashless payment methods across the world . Banking cards accompany various benefits like secure payments, convenience, and far of more.
One of the foremost important advantages of banking cards is that we'll also use it for creating other kinds of digital payments. Moreover, banking cards are often also utilized in online purchases, PoS machines, online transactions, etc.
There are many reputed names like MasterCard, Visa, and Rupay when it involves banking cards.
Unstructured Supplementary Service Data (USSD) could even be a cashless payment option for people that don’t have a smartphone. The USP of this method is that the user can make payments without a smartphone device or internet facility.
In such kind of transaction, we'll dial *99# to interact with an interactive voice menu via a mobile screen. However, to use this service, we must confirm that our mobile number is that an equivalent as that of the one linked with the bank account .
This service is pretty almost a bit like the IMPS and it uses the MMID and MPIN with mobile number or account number with IFSC code for a successful transaction.
3.Digital Wallet Apps
Mobile wallet applications are quickly gaining traction thanks to its fast, secure, and convenient payment methods. These are mobile applications which allows us to send, receive, and store money.
We can add or store money in our wallet by simply linking our bank account . Similarly, we'll also send money to our friends, relatives, or the opposite person by entering phone number , email ID, unique ID, or scanning QR code.
Moreover, we will also make payments to merchants and pay various utility bills like water bill, electricity bill, mobile recharge, and far of more directly from the mobile wallet apps. Digital wallet have become a trend especially after Demonetization done by the government and like we see everyone has Digital Wallet apps in their smartphones like Google Pay, Paytm, Phone Pe, Amazon Pay, PayZapp etc.
QR stands for Quick Response. It’s a two-dimensional code that features a pattern of black squares which are arranged on a square grid. QR codes are read by imaging devices like smartphone cameras.
QR codes are widely used for creating cashless payments during which we'll just possesses to scan the QR code of the merchant service to end the transaction.
Example: Paytm, PhonePe, Google Pay.
Contactless payment could also be a convenient and secure method which enables us to urge products by simply tapping a card near some extent of sale terminal. the cardboard are often simply a debit, credit, or revolving credit which is additionally mentioned because the chip card that's supported NFC (near field communication) or RFID technology.
Contactless payments are extremely convenient because it doesn’t require any signature or PIN. Moreover, we'll also make contactless payments via NFC enabled phones that are directly linked with mobile wallet. In this, we possess to easily keep our NFC-enabled phone near the reader to make the payment.
We can make payments via NFC-enabled phone at various places such as:
• Fuel stations
• Toll booths
• Parking garages
Electronic clearance service is widely used for creating bulk payments, equated monthly instalments, paying off for utility services, and to disburse payments like dividend interests, pensions, and salaries. ECS are often used for both credit and debit services.
To initiate the ECS, an authorisation possesses to be provided by the bank for creating periodic credits and debits. ECS could also be a secure method as we'll provide instructions for max sum of debit, validity period, and thus the aim of transaction.
7.Gift Cards or vouchers
Gift vouchers are a superb gift idea apart from being a handy because of go cashless. It enables us to buy for love or money with the help of a voucher. There also are various stores that give discounts on gift vouchers.
8.Point of Sale (PoS) terminals
Traditionally, PoS terminals are nothing but a handheld device present at the stores. These devices are wont to read banking cards of the purchasers . However, the scope of PoS is expanding as these services are now available on various mobile platforms via the web .
Nowadays, PoS are often bifurcated into differing types like Physical PoS, virtual PoS, Mobile PoS, etc. Mobile PoS is beneficial for small businesses as we don’t need to invest in expensive electronic registers, since the Mobile PoS operates through the smartphones and tablets. Similarly, virtual PoS systems use web-based applications for its operation.
Major benefits of a cashless society
* Reduced costs and business risks
Cashless payments eliminate several business risks at a time like theft of money by employees, counterfeit money, and robbery of money . Moreover, it also reduces costs of security, withdrawing cash from bank, transporting, and counting.
* Transaction speed
Making cash payments is time consuming for patrons also because the merchant or employee. That’s the rationale why many businesses have decided to travel cashless so as that they are getting to leverage faster transactions and increased efficiency. Faster transactions also cause enhanced customer satisfaction, increased revenue, and fewer errors.
* Seamless international payments
Whenever someone visits a faraway country, they need to buy for the foreign currency. However, with cashless payment solutions, we don’t got to appear the hay any more as we'll make transactions directly from their cashless payment apps in accordance with the currency rate of exchange .
* Better compilation of economic data
All the cashless payments made are recorded financial transactions, which makes it easy for the govt. to trace the movement of money through these records. These records also help them to trace black money and other illegal transactions.
* An efficient tool to fight corruption
If all the people were connected via end-to-end payment infrastructure that makes a cashless environment, then there would be complete transparency within the flow of money .
No matter, if it’s a private investment or international aid, everyone digitally connected within the cashless environment would be able to view where precisely the cash went and therefore the way it had been spent.
Any amount of money that's found outside the framework are often easily detected and investigated.
Any sum appearing outside of that framework could immediately be flagged and investigated. this is able to narrow the most target for enforcement and forensic accountants, making it easier to specialize in and recoup hidden money.
* Eliminating the middleman
The concept of cashless society could also be a broad one and it's quite just the shift from cash payments to cashless payments. the rationale behind is that the mere shift won’t have the most impact as private companies are already involved within the processing of the transactions. So, albeit we achieve the shift, there'll inevitably be a price .
A true cashless society would be the one where there’s total exchange useful with none loss. And to understand this, we'd require the national government instead of banks or the opposite payment provider, thus effectively making it a state-backed utility.
The money saved in such cashless society because of the absence of processing costs are often then used for those in need. The saved amount are often then used to rejuvenate financially depressed areas. The cashless society in conjunction with the walk of money transfers, banking services, and payments will play a pivotal role in achieving worldwide financial inclusion.
A fully cashless society appears to be a couple of years away. With the introduction of cutting-edge technology and constant improvement of existing technologies, we'd see faster, more transparent and safer cashless payments than ever. But only time will tell once we'll truly become a cashless society.
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