In the era of digitalization, the most affected area is the economic sector. Digital payments marked their beginning in 2016 with the demonetization and it has only been growing exponentially since then. You do not need to visit the bank each time you make a transaction, digital payment allows you to transfer money from one account to another using a digital device. Platforms like Google Pay, Paytm, PhonePe, etc. are all over the place, especially amidst the pandemic. The pandemic caused a decline in the Cash On Delivery method, consequently, people started relying more upon online transactions. Initially, cashless transactions were confined to metropolitan cities of the country, but social distancing and government schemes spread awareness among the people belonging to small towns. Nowadays, even tier 4 and 5 cities have adopted the contactless payment method using video KYC and Adhaar-enabled methods. Currently, over 300 million users in India prefer online payments through mobile banking as they offer ‘tokenization’ wherein the card details are encrypted and provide a secured experience.
Following are a few features of digitalization:
Convenient: Along with providing financial accessibility, going cashless is relatively convenient, hassle-free, and easy to transact. It eliminates the struggle of standing in long queues in scorching weather and lets you conduct transactions with a click. Also, it eliminates the need to carry lots of cash and withdrawal from ATMs.
Offers and Cashback: Cashless transactions from various online shopping applications come with tons of offers for special banks that is not available for Cash On Delivery transactions. Online payment applications like Gpay and Paytm provide cashback as per the number of transactions along with numerous offers for special brands.
Secure: Most of the digital payment transactions are end to end encrypted and require an OTP ( One Time Password) before the amount gets debited from your account. All transaction data is stored in your smartphone which avoids the risk of fraudulent activities. Services like E- Wallet does not even require a bank account which eliminates the problems faced by small business owners who cannot afford to buy card machines.