Digital Payments in India

 

History

Industrial Credit and Investment Corporation of India (ICICI), employing electronic banking at its branches, launched online banking services in India in 1996. Online banking services were introduced by banks including HDFC, IndusInd, and Citi later in 1999. With more banks offering online banking services in India, the trend kept gaining momentum. As a result, various new banks began providing services to customers, bringing in an age of digital transactions in India.

Current Scenario

In order to transform India into a digitally empowered society and knowledge economy, the Government of India launched Digital India programme in 2015. The programme focuses on three main vision areas: digital infrastructure as a core utility to every citizen, governance and services on demand, and digital empowerment of citizens. Through the programme, the government wants to ensure the availability of high-speed Internet, provide mobile phones and bank accounts to every citizen, ensure availability of services in real-time from online and mobile platforms, make financial transactions electronic and cashless, and ensure digital literacy and availability of digital resources across the country.

Types

• Banking Card - The Central Bank of India introduced this in 1980 as the country's first credit card. Prior to 1993, various PSU banks began selling credit cards. 
• Aadhaar Enabled Payment Systems (AEPS) is a concept driven by banks that enables online interoperable financial inclusion transactions at the point of sale through the business correspondent of any bank utilising the Aadhaar identification.
• The Unified Payments Interface (UPI) makes peer-to-peer and person-to-merchant transactions easier, which was created by NPCI in 2016.
• Mobile wallet: A mobile device's virtual wallet used to store credit card data.
• Bank Pre-Paid Card - Pre-paid cards, which operate under the slogan "Pay Now, Use Later," enable customers to make purchases using the funds stored on their cards.
• Point of Sale (PoS): A Point of Sale is a technology tool made available by a Merchant Establishment to conduct the sale of products or services to clients in a cashless setting.
• Internet banking is a type of internet banking that allows users to conduct transactions through a portal on behalf of a bank or other financial institution.
• Mobile banking is a service offered by banks and other financial institutions that allows customers to conduct financial transactions using a mobile device.