A lot has been written about the push towards ‘Cashless’ Society and how everyone needs to embrace the concept to weed out corruption and black money after the demonetisation decision by Prime Minister Narendra Modi. Public sphere is abuzz with the debate about the long-term implications of the move along with the feasibility of such a move on the existing technology infrastructure. It is generally assumed that you will need a costly smartphone to survive the increasingly ‘cash’-less world that we live in.
Today, we are here to dispel most of the assumptions about the cashless society and how Paytm is not the only solution out there. RBI and major banking institutions have done a great job in improving the tech infrastructure to somewhat reduce the impact of the lack of cash in the society.
Paytm and other wallet services may be the buzz word for everyone who makes a transition to lighter wallets along with the change of mindset where average household was afraid of ‘Online’ when it came to banking or money. We will focus on all the different sections of the society who can easily make the switch to cashless and digital economy without investing more (difficult to get) cash.
Unified Payments Interface
The top tier of the potential solution as outlined by the PM in a LinkedIn post yesterday is UPI. UPI stands for Unified Payments Interface which makes it easier for people to send money using a light-weight app from their respective banks and using the app to easily send and receive the money.
Major banks had been internally testing the technology even after NPCI announced the system back in April. I tried setting the UPI system and it was fairly easy to setup and operate. To start things off, you need to ensure that you have registered your mobile number with your bank. If you have not done that already, then you can register your Mobile number at any ATM or Bank.
The next step is to install the UPI-supporting app from your bank. After installing you need to enter your mobile number which will authenticate and pull in your account details. In the next step, you will be presented with a screen to set a unique ID in the bank’s app. This unique ID is in the format of ‘<username>@<nameofthebank>’. For instance, if I have an account with State Bank of India, I can have rehan@sbi as my unique ID. This ID can then can be used to send or receive money.
The next screen will give you options to set limit, the frequency of transactions and total limit along with an option to set UPI code or MPIN, these terms are interchangeable depending on the bank, to operate the app.
This bank app does not require any high-powered smartphones and can run without any hiccup on the most rudimentary and budget smartphones as well. The entire transfer relies on basic internet connection and a rear camera to scan the QR code generated on the app. The system allows basic actions like showing you your balance, adding and using multiple bank accounts from the same bank and even checking taxation status.
e-Wallets
Image Credit: Paytm
The second solution is the most well known with millennials and educated crowd, e-wallets. There e-wallets can range from Paytm, Freecharge, Ola Money, Airtel Money and Jio Money to Pockets by ICICI and SBI Buddy by State Bank of India. Most e-wallets are not as light-weight as UPI apps by banks and offer more, if not comparable features. You need to download the app, register and then add some money on the app using your credit or debit card or net banking.
Once you load the money, then you can use it for services and payments from food merchants to Kirana stores, movie halls, restaurants and cab services. The existing Debit or Credit cards are not rendered obsolete and can be used for banking wherever the payment by cards is accepted.
Aadhar-linked payments
The third solution which is not talked about much is the Aadhar enabled payment system where you can use your Aadhar number to make payments, once you link your bank account with Aadhar card number. This can be done to transfer funds, check balance, deposit cash or withdraw cash along with inter-bank transactions. This method does not even need a smartphone or a credit card or debit card for operation and gives you access to your money.
*99# or USSD payment system
The last solution is USSD payment system which means Unstructured Supplementary Service Data. This system purely works on the existing SMS system. You don’t need any smartphone and this can work on even the most dumb phones out there including the feature phones by smartphone companies.
You need to link your mobile number to your bank account and dial *99# to start the service. It gives you option to enter first three letters of your bank or first four letters of IFSC code, choose options to transfer fund or view balance which will ask you for payee’s mobile number and MMID. You enter your amount and MPIN along with last four digits of the account number.
All these solutions range from the most advanced with requirement of smartphones with internet connection to the most basic services that you can utilise using your dumb or feature phone with balance and SMS facility to the one where you don’t need a mobile phone at all. Even though the switch maybe scary or jarring for some people, it is not as difficult as it looks.
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