Digital Transactions: A Boon or Bane?

WHAT IS DIGITAL TRANSACTION?

Online or automated transactions between persons and organizations that do not employ paper area units are referred to as digital transactions. It’s going to involve one party or varied participants, as well as different modes of payment. Digital transactions provide a good number of advantages. If we talk about companies, Digital transactions save time and cash, leading to a more robust bottom line. Customer experiences are also enhanced and they also improve tracking capabilities that successively reduce semi-synthetic errors.

TYPES OF DIGITAL TRANSACTION

There are many kinds of digital transactions available. It ranges from Debit cards that have found their way into our pockets and purses to mobile wallets that are present at one click in our handsets. We have contactless card payments, which are actually a secure methodology for patrons to buy merchandise or services employing a debit card, credit card, smartcard, or alternative payment device that employs RFID Technology that is Radio Frequency Identification Technology, and NFC, which refers to Near Field Communication. This kind of payment involves touching a payment card or any other type of device close to a point-of-sale end that is provided with chip-based or contactless payment technology. Some banks and merchants refer to contactless payment as tap and go or tap. DIGITAL TRANSACTIONS IN INDIA

In India we have many kinds of digital transactions, Let’s take a glance at them one by one:

BANKING CARDS

Banking cards offer more security, convenience, and control to consumers than any other payment option. The range of cards available includes credit, debit, and prepaid. These cards provide two-factor authentication for secure payments, a PIN and an OTP. Payment cards enable consumers to buy merchandise from anywhere around the world. They save both clients and merchants time and money, permitting them to conduct transactions more easily. These cards may be used at PoS machines, ATMs, micro ATMs, Shops, wallets, online transactions, and e-commerce websites. International cards can be used for different currencies all around the world.

UNSTRUCTURED SUPPLEMENTARY SERVICE DATA (USSD)

The novel payment service operates over the Unstructured Supplementary Service Data (USSD) channel. This service permits mobile banking transactions to be completed using a simple feature mobile phone and does not require a mobile internet data connection to use USSD-based mobile banking. It has been designed to offer financial depth and inclusion of the underbanked community in mainstream banking services. The *99# service was created to bring financial services to common folks in the country.

AADHAAR-ENABLED PAYMENT SYSTEM (AEPS)

AEPS is a bank-led resolution that permits to connect online and exchange information in financial transactions at PoS utilising Aadhaar authentication through any bank’s Business Correspondent (BC).

UNIFIED PAYMENTS INTERFACE (UPI)

Here comes our recent favourite, UPI. Unified Payments Interface (UPI) is a system that integrates numerous bank accounts into a single mobile application, combining multiple banking functions, swish fund routing, and merchant payments under one umbrella. It additionally handles “Peer to Peer” collection requests, which may be scheduled and paid according to need and convenience. Each bank has its own UPI app available.

MOBILE WALLETS

A mobile wallet is a device that allows you to carry cash in digital form. You may link your credit card or debit card information in your mobile device to the mobile wallet application, or you can transfer cash to the mobile wallet online. You can use your smartphone, tablet, or smartwatch to make purchases rather than your traditional plastic card. To load money into a digital wallet, an individual’s account must be linked to it.

BANK PRE-PAID CARDS

In appearance, prepaid cards are almost like debit and credit cards. Prepaid cards vary from credit cards because money must be pre-loaded into a prepaid card before it can be used, and only the available money can be spent. Prepaid cards, like debit cards and credit cards, provide the same ease of use.

POINT OF SALE

A point of sale (PoS) is a spot where purchases are made. A PoS might be a mall, a market, or a town on a bigger scale. On a small level, merchants outline a point of sale (PoS) as the location where a consumer completes a dealing, like a checkout counter.

INTERNET BANKING

It is an electronic payment system that enables clients of a bank or other financial institution to execute a range of monetary transactions via the website of the financial organisation. It is also referred to as online banking, e-banking, or virtual banking. It has different types of online financial transactions and they are:

National Electronic Funds Transfer

National Electronic Funds Transfer (NEFT) is a nationwide payment system that permits for one-to-one cash transfers. Individuals, companies, and corporations can use this Scheme to electronically transfer payments from any bank branch to any other bank branch within the nation that is a participant in the Scheme.

Real Time Gross Settlement

RTGS is described as the continuous settlement of individual cash transfers on an order-by-order basis. ‘Real Time’ refers to the processing of instructions as they are received instead of a later time, and ‘Gross Settlement’ refers to the settlement of funds transfer orders as they are received. The payments cannot be reversed in this case because the settlement takes place in the volume of the Reserve Bank of India. The RTGS system is intended significantly for high-value transactions. The minimum amount that may be sent using RTGS is 2 lakh.

Electronic Clearing System

Electronic Clearing System is simple to use and eliminates the requirement for issuing and handling paper instruments and therefore enables improved customer services.

Immediate Payment Service

It offers an instantaneous, round-the-clock interbank electronic fund transfer service through handsets. IMPS is an assertive instrument to transfer cash quickly within banks across the nation through the Internet and ATMs. It is safe and economical in terms of financial and non-financial perspectives.

MOBILE BANKING

Mobile banking is a service given by a bank or any financial organisation. It permits its customers to execute varied varieties of monetary transactions remotely just by employing a mobile device. It does so by utilising software offered by monetary institutions.

MICRO ATM

A micro ATM is a widget used by a million Business Correspondents to provide basic monetary services. The platform permits Business Correspondents to perform immediate transactions. The micro platform will work using low-cost devices connected to banks around the country. This would allow someone to deposit or withdraw cash quickly independent of the bank connected with a certain business correspondent. This widget, which will be dependent on a mobile phone connection, will be available at all Business Correspondents.

Wow! A hell lot of options to choose from and it has numerous benefits too but then why does the topic say “Digital Transactions: A Boon or Bane?” Wait a second! Everything that sparkles is not gold!

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Let me start with a brief story. I was sitting on my couch, binge-watching my favourite Netflix programme. The show was so captivating that I couldn’t bring myself to get up from my couch; cooking was out of the question. I am a slacker! I was hungry and wanted something delicious yet economical. That’s what the middle class does. I took out my debit card from my pocket, which had just 250 rupees left after paying all the bills and taking care of all my other requirements. “No problem”, I thought, “It’s 30th today and half the day is already over. Tomorrow morning, my salary will be credited to my account”. I instantly accessed an online food delivery platform, selected a great low-cost lunch for myself, and placed my order. Wait! What? My 220 rupees were deducted but the app said that the order had not been placed since the transaction had failed. This can’t be true. I checked my account balance and it said I have just 30 rupees left in my account. Where did my 220 rupees go if the merchant didn’t receive it? I immediately contacted the food delivery customer care and they said they hadn’t received the money and that if the money had been debited then that would be refunded to my account within 5-7 business days. 5-7 days! Are you serious? I had just 250 rupees in my account. Where did the money go? Has it become air within a span of 5 seconds or has the digital transaction failed miserably?

Another day, my friend asked me to send 5000 rupees urgently as his mother was in hospital suffering from a serious ailment and he didn’t have enough money. I quickly took out my phone and sent him money. Oops! Money had been deducted but the transaction was unsuccessful. I called him and asked if he had received money and his answer was a straight “NO”. It was a medical emergency so I did the transaction again. The money was deducted again but the transaction was unsuccessful. I called him again to ask if he had received the money. This time the answer was a vehement “No”. Poor, perplexed me! Where is my 10,000 rupees? Ok, let me call customer care and again it was, “Wait for 5-7 days.” Hocus, Pocus, I am Brokus! Whom do I ask about my money?

The next day, I was chatting to a buddy who had to waste his hours haggling with an online merchant’s customer care over a transaction of 1300 rupees which they hadn’t received but the amount was deducted. He was asked to wait 5-7 business days. Again 5-7 business days (must be their lullaby). He had to waste his time again and again. He is a salaried person and had just 1500 rupees left in his account after meeting his monthly needs.

Another day one of my friends complained about the money being deducted from his fast track account at the toll while driving. The gate didn’t open up because it went undetected so one of the kind persons there came with a machine in his hand and scanned the fast tag. Lolz! The money was deducted again. He called the customer care and the same reply, “Wait for 5-7 days!” Is 5-7 days a magical number? I am confused.

So, if the one-tap can take our money in a few seconds, why do we have to wait 5-7 days to get it back? And where does the money go once it has been withdrawn from the customer account but the merchant has not received it? (Probably Mars). Who is getting the benefit of the money that has already been deducted? (Hmm! Aliens, I think). We have been told about numerous benefits when we go to financial institutions asking about online payments. We are encouraged to a level where digital transactions look sparkly in our eyes. Why are we not explained about the risks? Why no proper guidelines had been shared and no awareness had been created among the common folks yet? Why is such a big loophole going unnoticed in a country where the majority of the population is poor or middle-class?