The future of money- Electronic Payments

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Compiled by Vraj Dani

The digital transaction in India has shown robust growth after the 2016 demonetisation. It can be said that note ban laid the foundation for the inception of digital era. Moreover, the Digital India programme, a flagship programme of the Government of India, sets a vision to transition the nation into a digitally authorized society and knowledge Economy. ‘Faceless, Paperless, Cashless’ is one of the professed roles of Digital India.  

Not only that, but the Pandemic represented a new era of cashless transactions. It altered the way that we utilize cash in physical stores. Social distance was made possible by online transactions. People may now instantly transfer money from anywhere in the world, which was not possible while using paper notes. The future of money will see the disappearance of actual cash. 

If we look at this situation it seems like the cash is becoming obsolete. However, notes have been in use for many ages of humans. On our currency, there are historical pictures that evoke emotion and foster a sense of patriotism. Even though we are advancing quite quickly by utilizing the power of technology, some traditional practices will never be replaced. For instance, the obligatory Shagun(blessing) envelopes are necessary for the Indian festival celebration. People still prefer to provide loose cash from their wallets when tipping a labourer or someone who delivers food. Grandparents often give money to their grandchildren to show them they care. Cash is presented as a small donation to the Priest or at temples. These are a few examples of many such special moments where cash is a medium of expressing love. Apart from these emotions, cash is untraceable.  

Rise of Electronic Payments 

Thanks to a facial recognition service dubbed “Smile to Pay,” people in China can now even make payments while grinning. These days, having actual money is less crucial. 

In its simplest form, digital money is any sort of payment that can only be made electronically. This might be a straightforward internet payment or money transfer. These are typically facilitated by a credit card firm or conventional bank, or when complicated cryptocurrencies like Bitcoin are involved (which typically exist outside of established financial institutions). 

Many businesses, including shops, cafes, and restaurants, no longer accept cash. Cash on Delivery is becoming less popular with some online retailers. Banks are implementing reliable technologies to ensure smooth transactions and protect client data. The Bank’s physical and paper work are now available online. People can open accounts, send money to others, make payments online, book flights, pay bills, pay insurance premiums, and more. I recall that back then, if I had to swing by to pay the electricity bill, I would leave home for work an hour early. Nowadays, paying bills is easy. India is currently the second-largest Internet market in the world with over 560 million users. As per reports, India accounted for 48 billion worldwide real-time transactions in 2021. Interestingly, 80% of transactions originate in tier 2, tier 3, and tier 4 cities and beyond. 

Pradhan Mantri Dhan Yojana 

 As of September 6, 2018, 46.40 billion people had accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY), which was introduced in 2014. Thanks to this program, millions of low-income people now have access to banks. According to Prime Minister Modi, this initiative has changed the game and laid the groundwork for a number of measures aimed at reducing poverty, which will help millions of people. Let’s assume at this point that over the following few years, even the impoverished will begin to become accustomed to online payments. Because the present BJP government wants to encourage saving and promote digital literacy, etc 

electronic payments

There’s little doubt that the elimination of cash would enable banks, credit unions, and other financial institutions to reduce staff. After all, it takes more people to Handle the business of cash transactions. Electronic payment methods, by contrast, are completely digital.