The government of India has launched the Digital India initiative with the aim of promoting digital payments and achieving a cashless economy in the country, in order to reduce the reliance on cash transactions.
The adoption of digital payments in India is gaining momentum, as evidenced by the increasing number of people using them for their daily transactions. According to the Boston Consulting Group (BCG), the digital payments market in India is projected to reach $10 trillion by 2026, a significant increase from its current value of $3 trillion. This growth is being fueled by the entry of new players in the market, offering a variety of digital payment options to consumers.
Types of digital payments available in India
- QR Code
The usage of QR code-based online payment methods in India has seen a significant increase, as more people are now able to make and receive payments through their smartphones, thanks to the widespread adoption of smartphones and internet connectivity. Additionally, Indian banks are also offering their own mobile banking QR codes, which users can easily access through their smartphones.
- Aadhar enabled payment system
AEPS (Aadhar enabled payment service) is an aadhaar based service that allows bank account holders to withdraw cash through their unique aadhar number and biometric verification. An extension of the last mile banking services, there is no need for debit or credit cards, just your bank account linked Aadhaar number.
This system is designed to make ATM-like services available at all corners of every society and to smoothen the process of financial inclusion in the country.
By using a Unified Payments Interface (UPI) based application, any customer who holds a bank account can easily send and receive money using an interoperable payment system. With the ability to link multiple bank accounts on the UPI app or their smartphones, users can effortlessly initiate funds transfers and accept requests anytime, round the clock, 365 days a year.
- Debit card/ Credit card/ Prepaid cards
Debit cards, Credit cards, and Prepaid cards are bank cards that allow its holders to withdraw cash or make payments at any shop. This is an old and very reliable method of digital payment available in India.
- Internet banking
Internet banking, which is also referred to as e-banking or virtual banking, allows customers to perform various banking activities online, such as transferring funds, opening recurring deposits, and closing accounts. NEFT, IMPS, RTGS, and other online transfer methods are commonly used for money transfers in this mode of banking. To access their accounts, customers simply need to log in with their username and password on their bank’s website, where they can access a wide range of banking services.
The best mode of payment in rural areas
In rural areas, where most people do not have debit/ credit cards or any ATMs and other banking infrastructure they prefer paying cash only. However with the advent of AEPS (Aadhar enabled payment service) technology, now rural folks can make payments easily anywhere just by providing their bank-linked aadhar number and biometric punch for verification to make payments anywhere; making it the best and most feasible mode of payment, majorly in rural India.