6 Cashless Transaction Types Used in India Everyone Must Know About
Go cashless! Spurred by demonitization many Indians have made up their minds to become used to the cashless economy. Its very convienent, easy and most importantly safer than the cash exchange. Ultimately, it is not just convenient for the user but also facilitates to keeping nation and national economy accountable.
For a citizen of India, there are many ways to go cashless. From meeting daily supplies to runniung big businesses, these options will surely make your life a lot easier!
AEPS or Aadhar Enabled Payment System
Aadhar Card has indeed turned out to be a big ‘Aadhar’. Especially people with no access to costly digital sources like internet or smart phones can also perform cashless transactions.
An Aadhar Card holder must make sure that the card is linked to self bank account. That’s it!
1. Visit a Micro ATM or Banking correspondent.
2. Identify or give your bank name along with Aadhar Card number
3. Choose your transaction type
4. Record thumb impression on fingerprint scanner
5. When the transaction is complete don’t forget to print the slip
Using this basic mode people in far-flung areas and deep interiors can successfully complete cashless transactions like
1. Funds transfer from one Aadhar linked account to another
2. Check balance
3. Deposit or withdraw cash
4. Make purchases at a fair price shop
Cards issued by banks
These cards are the most common form of cashless money handling in India. All you need is bank account with some money in it. Bank cards are available in two types-
1. Prepaid Cards– These cards can be loaded with cash from your bank accounts. That’s it! Recharge them like prepaid mobile phones and start shopping, paying and receiving money.
There is the added benefit of security. Apart from cashless use, there is no direct link to your bank account. So at the most only the card balance is vulnerable (that too almost never!). Your bank account details and transactions are safe.
2. Debit Cards– The only difference between prepaid and debit cards is that these are operated right from your bank account. These have slightly more ease-of-use. Once there is money in your accounts you are good to go!
Mobile Banking using Unstructured Supplementary Service Data (USSD)
Do not let the complicated name of this feature confuse you. Effectively, this cashless transaction requires a mobile phone with GSM network (which is almost every phone these days) and an account with a bank!
Once the mobile phone is connected to the bank account get access to numerous services. A unique Mobile Money identifier (MMID) and Mobile Pin (MPIN) is given to each registered user. Cash transfers, especially, become very easy with this facility.
Point of Sale (POS)
This facility of cashless transfer is primarily useful for shop owners or businesses to receive payments. Customers are turned down for lack of change or because of uselessness of 500 or 1000 denomination notes. But this affects businesses adversely as much as it affects customers.
Therefore, shop owners must avail POS services. This is the most common type and available for legal, recognized and tax-paying shop owners easily. Broadly, there are three types-
1. Physical POS – The customer simply swipes the credit or debit card at merchant establishment and/or enters pin to pay.
2. M-POS – Mobile POS are used to transfer money from the card holder to the seller by means of the seller’s phone. The mobile swiping device attached to the seller’s phone is a classic example of this type. Once attached, the customer can swipe the card on this device and the cashless transfer is initiated.
The customer email and phone number along with signature on the recipient’s phone completes the transaction.
3. V-POS – In Virtual POS or V-POS, cashless transfer is done by simply scanning the unique bar code on the recipient machine. The required money is transferred securely transferred from the scanning to the scanned machine holder’s account.
E-Wallets are the most popular technology sweeping world and India alike. Online shopping or physical shopping all you need is a bank account, internet access and a computer or a smart phone.
Just as in pre-paid cards, load your wallet with money using debit card, credit card, mobile banking or net banking system. Similarly, a merchant establishment can use these wallets to collect payments.
An added benefit of e-wallet is the loads of discounts; cash back offers and range of goods and services to choose from. This creates a win-win situation on either end of the deal! Paytm, Freecharge, MobiKwik are some of the most popular e-wallets in India. Going cashless is easy, fun and of course relatively very safe.
This system is similar to using an e-wallet except banks themselves act as the gateway for cashless transactions and services. After registering mobile number with your bank, download the bank app on your mobile.
Key in your unique user login and password and voila! The world is out for you to purchase or sell. Moreover, you can also check account balance or perform money transfer using the same interface.