New Age Digital Payment Options in India

05 June, 2023

From struggling to find the precise change to making the smallest and biggest payments online in a matter of a few seconds, the Indian payment system has come a long way in the last few decades. There was a time when people fought over the acceptance of torn notes taped together. However, even the remotest areas today have hybrid payment options ranging from cash, Debit or Credit Card, UPI, NetBanking, Mobile Banking, and more. A lot has changed, and a lot is being done to further simplify the payments system in the country. Let’s find out more.

Efforts made by banks and governments to establish safe and secure payment options

Leading banks, along with the government, have been pushing digital payments and their wide acceptability for a while now. However, the country saw a true digital revolution post-COVID-19. The pandemic brought about a need for contactless payment systems. More and more people from all over the country shifted to digital payments, such as Aadhaar Enabled Payments System (AePS), BHIM Aadhaar Pay (BAP), Unified Payments Interface (UPI), and Bharat Bill Payments System (BBPS). Contactless cards and other card-based payments, such as RuPay, also became popular.

In fact, in the last five financial years, UPI transactions in the country grew at a CAGR of 119% in volume and 138% in value. There are approximately 300 million active UPI users in the country. With an estimated 750 million smartphone use in India, UPI sees over 57 billion monthly transactions on average.

Benefits of ever-evolving payment options

Here are some advantages of digital payment systems:

• Convenience: Digital modes of payment are designed to offer people convenience. These options can be accessed anytime and anywhere, removing the need to visit banks or ATMs often. Moreover, with multiple options, customers and merchants can choose a suitable system and enjoy speedy, hassle-free transactions at a low cost.

• Faster payments: Digital payment options like UPI, Debit Cards, etc., are quick to use. They take a few seconds, even for large sums of money, and can be accessed anytime during the day.

• Safer transactions: New-age payment systems are secure. There is a transparent trail of transactions that helps minimize fraud. Everything is done digitally, removing the chances of error or human mistakes.
  
  

Latest innovation in payment methods

Smartphone users are expected to cross 1 billion by 2026. However, there still exists the issue of connectivity, where these digital forms of payment more or less fail. Fortunately, banks like HDFC Bank have now come up with an offline wallet that helps to bridge this gap and offers offline modes of payment to users that are just as convenient as digital modes.

OfflinePay is an on-device wallet offered by HDFC Bank that you can use to transfer money using your mobile phone. The transaction can be carried out in the same manner as UPI. However, though OfflinePay you can make payments even when you or the receiver do not have internet.

The offline wallet can be helpful in the following situations:

• Rural areas where internet facilities may be weak

• Tier 3, 4, and 5 cities with poor network connectivity

• Basements, underground parking areas, malls, etc., with scarce networks

• In transit while on the train, flight, boat, etc.

• In the case of short-term failures due to natural disaster, infrastructural failures, etc.
  
  

The offline retail payment system is easy to use. All you need is to download the app. Once downloaded, you can add funds to your wallet. These funds can then be used to make payments whenever you wish to. Check for your closest merchant that offers this service now.

You would require the internet to add the funds. However, the wallet can then be used offline without the need for the internet. Moreover, the transactions will be secure, fast, and convenient, similar to any other digital payment system, click here to Know more about digital payment system

The evolution of payment systems in India has been applause-worthy, from traditional methods, such as cash and cheques, to more technologically advanced methods, such as digital wallets, UPI, and Mobile Banking. This transformation has not only made transactions faster, more secure and more convenient but has also expanded financial inclusion by bringing more people under the umbrella of the formal banking system. Despite the challenges faced in terms of adoption, the future of payment systems in India looks bright with government initiatives such as Digital India, new offline modes such as OfflinePay, and new-age technologies like block chain and AI. These developments and many more to come in the future are likely to lead to increased efficiency and financial empowerment for the country’s customers and merchants.

​​​​​​​*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.