The Fascinating World of Digital Banking

The Fascinating World of Digital Banking

Sufficient knowledge about technology can create magic in our lives! The same applies to Banking. Now, people don’t have to visit and spend hours in banks for direct money pay, cheque transactions etc. The wide use of smartphones, 4G, etc has increased the popularity of transactions through mobile phones and applications. In the past 4 years, mobile app users have increased about 25 times! Statistics shows, only 10.9m mobile banking transactions took place in 2014, but 4years later it increased to 250m. As per the Neethi Ayog report, it is said that in the coming years the value of mobile transactions will bounce up.

After money demonetization procedures, there has been an increase in the use of digital banking methods than using direct transactions. While credit and debit card transactions were used widely for digital payments before, the inception of e-wallet, mobile banking, UPI (Unified Payment Interface), etc. made a lot of changes to the features of digital payment. Today, different types of mobile applications are available for financial transactions. Most of the mobile apps consist of almost all features provided by online banking platforms. A mobile app can be used for account opening, investing, applying for loans, electricity and DTH bills payments, mobile recharge, etc. It also gives you the facility to transfer money any time to any place.

1. Mobile Bank Apps:

Mobile banking applications have now made all banking affairs a lot easier! One doesn’t even have to go to the bank at all.

They can be used for:

  • Money transfer
  • Cheque book application
  • Fixed deposit investments
  • Credit card bill payments
  • Checking the cheque transaction status
  • Receiving bank account statements
  • Knowing new attractive shopping offers and more

Almost all banks levy similar charges for money transfers through platforms like NEFT (National Electronic Fund Transfer), RTGS (Real Time Gross Settlement), etc… Charges levied for different transactions are Rs 2.5, 5, 15, 25 for up to Rs 10000, Rs 10,000-1 lakh, Rs 1-2 lakh, and Rs 2-5 lakh respectively. Some banks don’t impose charges for NEFT transactions, but for IMPS (Immediate payment Service) different banks charge different rates. Net banking charges have increased after the inception of GST (inclusive of Service and payment gateway charges).

2. Unified Payments Interface (UPI):

Through UPI, a person having a Smartphone can easily transfer any amount of money to any person who has a bank account- making transaction process very easy and quick by following the steps below!

  • Download the UPI application
  • Connect the bank account
  • Create an ID and pin number for the same
  • Link with Aadhaar number

A few UPI based apps that are widely used:

  • BHIM-the central government flagship UPI app is available in 13 Indian Languages
  • Google Pay (previously Google Tez)
  • PhonePe
  • Axis Pay

Advantage: If you do not know the receiver’s UPI number, you could complete the transfer using the mobile number. Money transfer can also be completed using bank account number and IFSC code. Plus, No charges will be levied for the money transactions through UPI.

Limitation: The transactions through UPI in a day have been limited up to Rs 1 lakh by the National Payment Corporation of India (NPCI). But, not all apps permit to transfer Rs 1 lakh in a single day. For example, BHIM permits just Rs 40,000 in a day.

3. Mobile Wallet:

They gained a large popularity after demonetization. Even though mobile-wallets are recently formed internet-based service, many companies have their presence in this field.

They have been created by:

  • Telecom providers
  • Handset manufacturers
  • Tech start-ups
  • Small-scale shops that have started accepting money via ‘Paytm’, an Indian e-commerce payment & digital wallet system.
  • Call taxi services like Uber and Ola have developed mobile wallet facilities.

Advantage: As the platforms get their income from companies who make use of the transactions, there are NO Transaction charges.

New mobile apps are being introduced to the market day by day and existing apps are continuously upgrading to extend their service limit to customers. In such situations, consumers will be quite confused in selecting the best app from thousand such apps to fulfill their financial needs.