Different Payment Modes of Cashless Transactions

NITI Aayog recently said that 'the hassle of debit, credit cards and ATMs, etc. will end in the coming 3-4 years and there will be a significant increase in online payments and receipts'. It should be noted that since demonetization, the government seems to be committed to promoting a cashless economy.

When cash transactions in an economy are negligible and all transactions are done through Debit and Credit Cards, Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), and Real-Time Gross Settlement (Real Time Gross Settlement-RTGS) through electronic channels and payment channels, this situation is defined as a cashless transaction.

Types of Cashless Transactions
Mobile Wallet:
A mobile wallet is a virtual wallet present in a Smartphone, in which money is kept in the form of digital money. In other words, it is a digital wallet from which transactions and payments can be made by withdrawing money.

Plastic money:
Plastic money refers to those cards made of plastic such as debit cards, credit cards, ATM cards, etc., which can be used for payment, etc. The use of plastic money not only strengthens the cashless economy but also gets rid of the hassles of carrying cash.

Net Banking:
Using the services provided by any bank through the internet through a computer, mobile, or any other device is called net banking. For this, banks make websites and mobile apps available to their customers through the Internet.

Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), and Real-Time Gross Settlement (RTGS) are the payment systems under net banking.

Unified Payment Interface:
Unified Payment Interface (UPI) is a new system of transactions introduced by the National Payment Corporation of India to transfer money using Virtual Payment Address (VPA). Ensures quick transfer. It is such a means of payment that works round the clock, seven days a day. This service can be availed even without any internet connectivity. This will reduce the movement of cash in money transactions and make business payments simple, secure and transparent.

Payment Bank:
Two types of licenses are issued by the Reserve Bank of India: universal bank license and differentiated bank license. A payments bank falls under the category of differentiated bank licensed banks. Payment banks are a special type of bank, which is allowed some limited banking activities. The objective of these banks is to promote digitization and financial inclusion of the economy by serving the migrant working class, low-income households, small businesses, and other unorganized sector entities.

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