STUDENTS' ECONOMIC FORUM - South Indian Bank
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
STUDENTS’
ECONOMIC FORUM
A monthly publication from South Indian Bank
To kindle interest in economic affairs… www.southindianbank.com
To empower the student community… Student’s Corner
ho2099@sib.co.in
CASHLESS INDIA – DIGITAL PAYMENTS
AUGUST 2021 THEME 356
30th Year of Publication
Open your
Account
Digitally
Anywhere
SIB introduces
Video KYC Account Opening.
T&C apply
Banking Simplified
Aadhaar + PAN Card + Video Call
to open your SIB Video KYC Account
Toll Free (India): 1800-102-9408, 1800-425-1809 (BSNL), Email: customercare@sib.co.in, CIN: L65191KL1929PLC001017
www.southindianbank.com /thesouthindianbank
Cashless India – Digital Payments “Money is a terrible master
August 2021| Theme 356 but an excellent servant.”
P. T. Barnum
The “SIB Students’ Economic forum” is designed to kindle interest in the minds of
younger generation. We highlight one theme in every monthly publication. Topic of
discussion for this month is “Cashless India – Digital Payments”.
Introduction Digital Payment Methods
The Digital India Programme is a flagship As part of promoting cashless transactions
programme of the Government of India and converting India into less-cash
with a vision to transform India into a society, various modes of digital payments
digitally empowered society and are available.
knowledge economy. “Faceless, Paperless,
Cashless” is one of professed role of Banking Cards
Digital India. A cashless economy is one in Banking cards offer
which the liquid transactions through the consumers more
system happens with the exchange of security, convenience,
plastic currency or through digital and control than any
currency. Debit and credit cards are plastic other payment method.
currency and online payments come under The wide variety of cards available –
digital currency. including credit, debit and prepaid – offers
enormous flexibility, as well. Issued by a
The last ten years for the payments financial institution or credit card
industry in India have been vibrant, company. RuPay, Visa, MasterCard are
disruptive and innovative. We have some of the example of card payment
witnessed a phase where the government, systems.
regulator, banks, service providers and
even consumers encouraged and adopted Unstructured Supplementary Service
digital payments at a pace never seen Data (USSD)
before. The transformative journey of The innovative payment service *99#
banks and other players offering works on Unstructured Supplementary
traditional services in brick and mortar Service Data (USSD) channel. This service
model to embracing a mobile-first allows mobile banking
approach has been spectacular. The usage transactions using basic
of cards, UPI and digital wallets, as well as feature mobile phone,
other payment channels, has skyrocketed there is no need to have
and the overall acceptance infrastructure mobile internet data
is on the rise. A shift to digital payments facility for using USSD
has also been fuelled by the based mobile banking. It is
unprecedented growth in the number of envisioned to provide financial deepening
Fintechs in the country. and inclusion of underbanked society in
the mainstream banking services.
Specifically, it’s worth acknowledging the
efforts of the National Payments Internet Banking
Corporation of India in building the Internet banking, also
payments infrastructure and launching known as online
initiatives like Unified Payments Interface banking, e-banking or
(UPI), IMPS, Bharat BillPay, National virtual banking, is an
Common Mobility Cards, Electronic Toll electronic payment
Collection through FASTags and BQR system that enables
based payments among others. customers of a bank or other financial
institution to conduct a range of financial
transactions through the financial sales are made. On a
institution's website. macro level, a PoS may
Different types of online financial be a mall, a market or a
transactions are: city. On a micro level,
retailers consider a PoS
i) NEFT & RTGS to be the area where a
National Electronic Funds Transfer (NEFT) customer completes a transaction, such as
and Real Time Gross Settlement(RTGS) a checkout counter. It is also known as a
were introduced by RBI to enable users to point of purchase.
transfer money from one bank account to
another. NEFT settles fund transfers in Micro ATMs
23 half hourly batches (net-settlement). Micro ATM enable Business
RTGS is defined as the continuous Correspondents (who
(real-time) settlement of funds transfers could be a local kirana
individually on an order by order basis shop owner and will act
(without netting). The RTGS system is as ‘micro ATM’) to
primarily meant for large value deliver basic banking
transactions. The minimum amount to be services or to conduct
remitted through RTGS is 2 lakh. There is instant transactions. The
no upper ceiling for RTGS transactions. basic transaction types, to be supported
by micro ATM, are Deposit, Withdrawal,
ii) Electronic Clearing System (ECS) Fund transfer and Balance enquiry. This
ECS is an alternative method for would enable a person to instantly
effecting payment transactions in deposit or withdraw funds regardless of
respect of the utility-bill-payments such the bank associated with a particular BC.
as telephone bills, electricity bills,
insurance premia, card payments and Mobile Banking
loan repayments, etc., which would Mobile banking is a
obviate the need for issuing and handling service provided by a
paper instruments and thereby facilitate bank or other financial
improved customer service by banks / institution that allows
companies / corporations / government its customers to
departments, etc., collecting / receiving conduct different types
the payments. of financial transactions remotely using a
mobile device such as a mobile phone or
iii) Immediate Mobile Payment tablet.
Services (IMPS)
IMPS is a real time, instant, inter-bank Unified Payments Interface (UPI)
fund transfer system managed by Unified Payments Interface
National Payment Corporation of India (UPI) is a system that
(NPCI). It is available 24/7 throughout powers multiple bank
the year including bank holidays. accounts into a single
mobile application (of
Aadhaar Enabled Payment System any participating bank),
(AEPS) merging several banking
AEPS is a bank led features, seamless fund routing & merchant
model which allows payments into one hood. It also caters to the
online interoperable “Peer to Peer” collect request which can be
financial transaction at scheduled and paid as per requirement and
PoS (Point of Sale / convenience.
Micro ATM) through the
Business Correspondent (BC) of any bank Mobile Wallets
using the Aadhaar authentication. A mobile wallet is a type of virtual wallet
that stores payment card information (credit
Point of Sale (PoS) card, debit card and loyalty card) accessible
A point of sale (PoS) is the place where through an app installed on a mobile device.
Mobile wallets allow some pleasant surprises in the efforts
users to make in-store or to promote India’s digital journey.
online payments
a) As per a ACI Worldwide report, India
without having to carry
retained the top spot with 25.5 billion
cash or physical cards. real-time payments transactions,
Some of the popular followed by China with 15.7 bn
mobile wallets are Paytm, Freecharge, transactions. The report speculated that
Mobikwik, Airtel Money, Jio Money, SBI by 2025 the share of real time payments
Buddy etc. volume in overall electronic transactions
will touch 71.7%.
India’s Journey of Digital Payments
– 2010 to 2020 b) As per the RBI data, Digital payments
have recorded a growth of 30.19% during
India’s Payment Systems the year ended March 2021.
c) A report by research firms Worldpay
2010 2020 and FIS says 39.7% of India’s
PPIs
RTGS
NEFT
e-commerce payments were done
RTGS
Cards NACH
through digital wallets in 2020 and
wallets have now become the leading
Cards ECS Payment
Payment
Systems
Systems
RuPay IMPS
MICR
Clearing NEFT
BBPS UPI
online payment method in the country.
RBI NPCI Other PBOs/
banks
NETC
d) As per data by EY, UPI-based digital
transactions have increased by 110% in
volume and 109% in value, from June,
2020 till June, 2021.
Share of Payment Systems
Retail Payment System Volume FY 2010-11
e) On August 2, Prime Minister
Narendra Modi launched e-RUPI, a
Retail Payment System Volume FY 2019-20
0% 3%
22% 15% futuristic person and purpose-specific
18%
60%
21%
61%
digital payment solution. e-RUPI is a
cashless and contactless instrument for
Paper Retail Electronic Card Payments PPIs Paper Retail Electronic Card Payments PPIs
digital payment. It is a QR code or SMS
Retail Payment System Volume FY 2010-11 Retail Payment System Volume FY 2019-20 string-based e-Voucher, which is
1% 0% 1%
delivered to the mobile of the
4%
10% 20%
beneficiaries.
89% 75%
Paper Retail Electronic Card Payments PPIs Paper Retail Electronic Card Payments PPIs Final Word
The digital payment boom is indicative of
a larger paradigm shift in the ease of
Digital Payments in India
access to financial services. Much of this
is a result of the nudges and diligent
4000
Digital Payments Volume (Crore) and Value (Lakh Crore)
2000
policy and technology frameworks
1,623
3000 1,371
1,638
1500
created by the central government in the
last few years. By giving unique digital
1,122 3,435
785 823 920
2000 711 1000
1000
498 561
595
978
1,472
2,340
500
identity Aadhaar to 124 crore people and
by building the Jan-Dhan-Aadhar-Mobile
245 352
96 125 169
0
2010-11 2011-12 2012-13 2013-14 2014-15
Volume
2015-16 2016-17
Value (RHS)
2017-18 2018-19 2019-20
(JAM) and Universal Payment Interface
(UPI) platform, the government has been
Source: RBI Data
creating the ground for greater financial
inclusion, when even a bank account was
an unknown element for millions of
Where are we now? What is in the people till a few years ago.It is estimated
News? that India’s digital economy has the
Amid the gloom of the Covid-19 potential to become a 1 Trillion USD
pandemic, the past year has shown ecosystem by 2025. This will havemultiple positive consequences, from an this direction was the Digital India that
increase in jobs to foreign investment, amplified pre-existing approaches along
growth of domestic digital infrastructure, with newer targeted schemes.
the rise of small and medium businesses
and an overall enhancement in the Source:
country’s economic growth. However, www.rbi.org.in
there are many hurdles in India’s path to www.financialexpress.com
becoming a 1 trillion-dollar economy www.indianexpress.com
such as a rampant digital divide, varied www.hindubusinessline.com
demographic profile and underdeveloped www.republicworld.com
technology infrastructure. A first step in www.vedantu.com
Toll Free (India): 1800-102-9408, 1800-425-1809 (BSNL),
Email: customercare@sib.co.in, CIN: L65191KL1929PLC001017
www.southindianbank.com /thesouthindianbankExtraordinary times
Extra fast loan
SIB Mirror+
Avail Gold
overdraft
T&C apply
digitally
You don’t have to sell your favourite gold jewellery,
when you can pledge it. With South Indian Bank’s
Superfast Gold Loan, you get the money to meet
your different needs, really fast. It is a gold loan
tailor-made for the uncertain times we are living in.
Go ahead, encash your dreams with
SIB Superfast Gold Loan.
Easy Tenure up to Attractive
processing 12 months interest rate
Wear masks in public spaces. Follow social distancing.You can also read
