The online business market has rapidly gained prominence during COVID and post-COVID times. Though your primary product can be bought in person, conducting online business, in today’s date, is pretty much a given for every firm. Accepting online payments for your products enables you to reach a larger audience and maintain a positive experience with the clients. This article goes through the details of digital payments, features of online payment solutions, and the benefits of using mobile money payment solutions.
What do you mean by digital payments?
Digital payments include those made using digital or electronic devices and the internet, as well as those received similarly. Digital payment options are frequently simple, more practical, and give clients the freedom to make payments whenever and wherever they choose.
These facilitate quicker transaction cycles and offer a good substitute for conventional payment systems.
What is the process of Digital Payments?
Consumer, bank, merchant, and payment networks are the components of a digital payment system. The person who purchases with a debit card or credit card is the consumer.
A merchant is a person who offers a service or is a vendor from whom a customer purchases goods. It might also be a retail shop. Consumers receive cards from banks, which also frequently function as an issuer during digital transactions. The merchants also get their money from it.
The final member in the system is a global payment infrastructure like VISA or MasterCard, which is well-known and in charge. You may be familiar with RuPay. It is India’s payment system.
Internet banking access is compulsory to conduct digital payments via online money transfer software. Online banking has largely superseded the use of cheques in commerce.
Businesses use RTGS, NEFT, or IMPS as bank payment solutions to complete deals, pay employees, and assist any dear ones. Similar to this, the recipient on the other end needs internet banking access to accept the payment.
Different types of Digital Payments
Banking cards
One of the most popular ways to pay is with a card, which has several features and advantages, including simplicity and payment security. Debit/credit and prepaid banking cards’ key benefit is that other digital payment methods can be made with them.
Customers can keep card information in mobile wallets or online payment apps, for instance, to complete a cashless transaction.
Internet Banking
Online banking is the practice of doing financial transactions. Many different services, such as money transfers, new fixed or periodic deposits, canceling accounts, etc., may fall under this category.
E-banking or online banking are other names for internet banking. Internet banking is typically employed for NEFT, RTGS, or IMPS online fund transfers.
Banks provide customers with various financial services through their websites, and those customers can access their accounts by entering a username and password.
Internet banking services can be used at any time and any day of the year, unlike attending a physical bank, which has time constraints. The potential for online banking services is enormous.
UPI
A payment system called UPI combines many banking information into a single program to make it simple to transfer money between two or more parties. UPI is significantly more defined and standardized across banks than NEFT, RTGS, and IMPS.
You may start a bank transfer via UPI from any location with only a few clicks. The advantage of someone utilizing UPI is that you can make bank transfer payments without entering your card or bank information.
AEPS
AEPS is a digital payment methodology led by banks that was developed to take advantage of Aadhar’s presence and reach. Customers can transfer money between two Aadhaar-linked bank accounts using their Aadhaar-linked accounts under this scheme.
AEPS does not call for physical actions, such as going to a bank, using a debit or credit card, or signing anything. By integrating Aadhaar verification, this bank-led concept enables online payments at PoS (Point of Sale / Micro ATM) through a Business Correspondent (also known as Bank Mitra). For cash withdrawals at BC Points, the AEPS costs average roughly Rs. 15.
USSD
You can conduct mobile payments without downloading apps by dialing the USSD code *99#, another form of digital payment mechanism. You can also make these kinds of payments without access to a mobile data network.
The USSD and the National Payments Corporation of India support this facility (NPCI). This kind of digital payment service’s primary goal is to foster inclusion among the underprivileged segments of society and incorporate them into traditional banking.
This feature could request balance information, see bank statements, and start financial transfers.
Mobile Wallets
Mobile wallets are a type of wallet where you can carry cash or an amount of money in a digital format. Customers frequently connect their bank accounts or credit cards to the wallet to enable safe online transactions.
Adding funds to a mobile wallet and then transferring funds using that amount is another way to use wallets. These are one of the best for digital payments among the peer-to-peer payment app.
Benefits of using Digital Payments
Quicker, simpler, and more practical
One of the significant benefits of cashless transactions is that there is no need to fill out extensive information, which accelerates the payment process. You do not have to carry cards in your wallet or wait in line to use an ATM to get cash.
Additionally, with the transition to digital, consumers will have access to banking services around-the-clock, 365 days a year, including holidays. Numerous systems, like UPI and digital wallets, operate in this way.
Affordable and with lower transaction fees
Numerous mobile wallets and payment applications don’t impose processing or service fees in exchange for the goods and services they offer.
The UPI interface is one such instance where customers can use services without paying. Costs are falling thanks to a variety of digital payment options.
Discounts, waivers, and cashback
Customers who use mobile wallets and digital payment apps are eligible for various perks and discounts. Many online payment solutions offer alluring cash return incentives. Customers benefit from this, and it encourages them to stop using cash.
Digital transaction records
Going digital has additional advantages, including the ability to preserve all transaction records. No matter how tiny the transaction value, customers can keep track of everyone.
One-stop-shop for bill payment
Utility bill payment is a popular convenience offered by numerous online money transfer software. These utility bills, including those for energy, internet, and mobile phones, may be quickly paid using a single app.
Control over black money
Digital transactions will make it easier for the government to keep track of things and, in the long term, will help stop the trafficking of black money and fake currency. Aside from that, since the cost of issuing new money decreases, this could also help the economy.
