Present Scenario and Future of Cashless Transactions
The journey of India to create a digital financial foundation was described by a coordinated effort between the government, the regulator, banks, and fintech. It has assisted with propelling the country's objective of empowering financial incorporation and furthermore gave fast payments digitization to citizens. The pandemic has additionally sped up the reception of digital payments, with many first-time users, taking on digital payments and being critically inspired by dealers. India, right now, is in the best position with 25.5 billion real-time payment transactions, trailed by China with 15.7 bn transactions.
● The estimation of NITI Aayog that the hassles of ATMs and cash etc. will end in the coming few years is not exaggerated.
● While debit and credit cards continue to be the major sources of retail digital payments today, transactions through UPI, 'Prepaid Payment Instruments (PPI),' and different payment network portals are also gaining momentum.
● The data confirms that in the year 2014-15, the transactions through PPI through cards were 18% which increased to 36% in the year 2016-17. Before proceeding further, let us know the difference between PPI and UPE:
● Keeping money in a mobile wallet through credit or debit cards and then spending them as per your requirement and other types of prepaid payments come under PPI (prepaid payment instrument).
● On the other hand, UPI, i.e., Unified Payment Interface, is a real-time payment system based on which the BHIM app works.
● In simple words, if a person has made a payment from Paytm Wallet, it is called PPI, while the payment made from BHIM App is an example of UPI payment.
● Transactions through UPI have increased from 4.2 million in January to 30 million in September 2017, while transactions through PPIs are at 87 million. The gist is that the pace of digitization of the economy can be said to be satisfactory.
● Need for a holistic approach
● The road to the digitization of the economy is not as easy as it is being understood. In fact, the economy cannot be cashless only with the provision of UPI, PPI, and mobile wallets.
● For this, we have to bring a large section of the population under the banking net, ensuring that more and more people work in the organized sector, taking care of basic needs like connectivity and electricity.
Important are the recommendations of the Ratan P. Watal Committee
A committee was formed under the chairmanship of Ratan P. Watal to consider various issues related to constraints in a cashless economy. Following are some of its suggestions:
● Establishment of a separate, independent payments regulator.
● Reconsideration of Payment and Settlement Act to include provisions on consumer protection, data protection, and privacy.
● RTGS and NEFT should work on a 24X7 basis.
● A fund should be created to promote digital transactions.
● All government payments and transactions should be done in digital form.
● Fees should be waived, such as waiver of service charges on railway ticket booking.
● The suggestions should be implemented properly, although some of these suggestions are being implemented by the government.
The path of a cashless economy is difficult, but the government is also taking various measures like BHIM App, Lucky Grahak Yojana, Digi Bank Scheme, Jan Dhan Yojana, etc. Cashless India is one such idea that the time has come for its practical adoption. However, for this, effective measures will have to be taken so that the Indian economy can be made even more dynamic and growing. If you are looking for a platform for online transactions, start using Zambo, an online payment network that gives you facilities for mobile recharge, bill payments, and money transfer.