Card payments conquering the digital market is the result of advancement in people behaviours towards technology. Everyone looks for a faster and less time consuming processes to accommodate and do a little more than what they do on a daily basis. With the multitasking approach, people wish to do the maximum in a day. Instead of taking out cash from ATM and paying to the vendors the people nowadays prefer to swipe cards directly and move around cashless carrying less weight in their wallet.
Reasons for the Rising Trend in Plastic Money
One of the major reason is the cash crunch caused due to demonetisation. At the time of demonetisation people ran out of cash not because they did not have it but it lost the value overnight. They had to look for other ways to make purchases and fulfil their basic needs, therefore, the rise in the use of debit/credit cards.
Easy and simple
Card payments is an easy and a fast process that only needs a PIN for authentication and you are done!
No hassle of managing cash
Handling cash has become quite a challenging task. The professionals are not in a habit to manage cash, what they get in their accounts is what they bother to manage their expenses with. Minimal cash requirements means minimum visit to ATMs and therefore, keeping a record.
Spending cash cannot be kept a record until and unless you bother to write or make an entry for. You can manage your account and have look at the bank statement to know the amount spent but you cannot do the same for cash. Even a difference of mere Rs. 10 can make you unstable on where did you spend it.
Rise in the mobile wallet usage
With the passage of time and advancement in financial technology, people have adopted the ‘cashless, paperless and faceless’ motto and inculcated it in their lifestyles. Mobile wallets have driven the masses to use more card as the important information gets stored and can be used wherever required.
Posed risk or limitations on Card payments
Even though card payments have conquered the majority of the market, there are places where you cannot do away with cash. Paying a rickshaw puller or pay at a roadside eatery cannot be by a card. It has to be cash, the aim of Digital India was to reach such section, and however, it is still impossible due to various other factors supporting it. There is a long way to go to make our nation completely digital.
Debit/credit cards ensure safety as far as payments are concerned but you don’t know when it’s a bad time for you to bear a loss. In case your card details are registered with someone and they find out your pin, it can be misused. In case, you did not have a PIN and your card is stolen anyone can swipe it. Nowadays, the ATMs withdrawal has become risky as people can withdraw money on your behalf. There are a lot of posed risks that have to be taken into account while getting too much dependent on the card.
With excessive card usage, one loses control over his/her expenses. Especially with credit cards, one goes beyond the limit thinking it to clear it all later but it doesn’t happen because of other unavoidable expenses. It is important to have self-control in order to not be under debt.
Glance at Payments and Settlement System in India
Payments and settlement system in India, referred to as PSS, is a system to manage financial transactions. They are regulated by Reserve Bank of India and the Board of Regulation and Supervision payment and Settlement System under the PSS act 2007.
There are multiple payments and settlement systems in India. You must have heard the common ones like Real Time Gross Settlement RTGS, National Electronic Fund Transfer NEFT.
The payments system are of two types, one is gross like the RTGS and other is the net settlement. The net settlement systems include Electronic Clearing Services (ECS Credit), ECS debit, credit cards, debit cards, NEFT and Immediate Payment Service commonly known as IMPS.
Promotion by the government on card payments or e-payments
One of the major steps for the development of our nation has to be to draw the majority of the population towards digitization. Despite of the government initiatives we still see the population comfortable with cash. Mentioned below are some of the initiatives by the government to encourage people to be digitally sound.
- PSS Act contributed to a rise in the trend of e-payments as it forced the banks to accept e-payments and promote the same.
- NBFCs were permitted to come out with their credit cards and promote its usage.
- Kisan credit card was launched to meet the credit needs of Indian farmers and promote digitisation.
- The promotion of RuPay card that will be encouraged more in rural and countryside areas to make the people updated to the latest technologies or make them familiar to the present.
Card payments are still appreciated instead of cash as it regulates and minimises the black money floating in the market and make the log books of people clear. It is an initiative to make the majority of people digitally updated and understand that it’s easier and friendlier. Therefore, one must adapt to the new lifestyle to move at pace with the world that is advancing each passing day.