When the government stopped circulating notes of 500 and 1000 rupees on November 8, many financial challenges were bombed one by one. People were looking for an easy way to take care of their daily expenses without any difficulty so that they could not face any challenge due to demonetization. Now people have a note of Rs 2000, but the lack of changes is also a major problem. In this, how we can see our cashless economy.
Now the question is how we can make transaction/payment or buy anything without cash. Is it possible to maximize flexibility of cashless flow in our daily lifestyles?
My answer is big yes!
I will go step by step from the very beginning so that everyone can understand everything and when you leave this page you will have enough information to guide others.
I will try not to use the technical term here and will keep it in a very simple and easy way.
So friends, let start and push one step towards digital India!
What we will discuss today:
1. What is the cashless economy and how it is important to us?
Cashless economy means all the transactions done by card, online or mobile. Any purchase or payment made without cash, consider being a cashless economy. When we are using a debit/credit card, net banking, mobile banking, and e-wallet for our daily expenses then cashless economy comes into the picture. In India, very less percentage of people believe in a Cashless economy that’s the reason India failed to form a cashless society. Circulation of physical currency is maximum in India. Sweden is the best example of cashless economy.
Cashless economy, not only keeping transparency in financial structures, but it also helps to stop corruption, terrorism, Naxalism. It is also a big obstacle to politicians for hoarding black money. Money laundry (the process of changing black money to white money) can minimize. Benefits in a cashless economy could be a bona fide if we understand the importance cashless economy.
2. Why is Indian government encouraging people to form a cashless society?
After demonetization for 500 and 1000 rupees note, Indian government encouraging people to form a cashless society where everyone can buy and pay without cash. A country like Sweden, Somaliland, Kenya, Canada, South Korea are few countries who totally believe in the cashless transaction.
Now how it really helps to government and citizen both, let see how?
There will be a reduction of robberies in the bank. At the same time, with less cash, the bank will be able to keep good security. Cashless mode of the transaction also helps you to keep your payment record and any dispute occur in the future will have proof of payment made by you. A country like Kenya has widely used mobile money, millions of subscribers to M-Pesa giving shape toward the cashless economy. All in all choosing cashless transactions means encouraging India to form the cashless society.
3. A process of opening a bank account and their benefits
Now in India almost everyone has their bank account. If you don’t have then I will suggest you open one. As the government already took an initiative to open bank account last year as a Pradhan Mantri Jan-Dhan Yojana (PMJDY). The account can be opened in any bank branch or Business Correspondent (Bank Miter) outlet. PMJDY accounts are being opened with Zero balance. When you go to the bank following documents required in order to open a bank account. They generally need residential and photo identity proof, a document can be considered like Aadhar Card, Voter ID, Driving License, PAN Card, NAREGA Card, Gas bills, Ration Card, Passport, Phone bills and an academic certificate in some cases.
Zero balance and checkbook account
Now if you want a checkbook, then you need to maintain minimum balance according to your bank. If you have a checkbook account it means you are maintaining a minimum balance. For these kind customers bank provides more benefits and facilities compare to zero balance account holders. If you have a salary account then you need not worry about because you are privileged to get all. For more details, kindly visit your nearest branch.
When you are opening bank account few things you need to keep in your mind get the form, fill it up, ask for mobile alert facilities which are free. You can also activate net banking and mobile banking free of cost no charges apply.
If PAN Card not available you may have to fill form 60 or 61 but now every bank is asking for PAN Card.
If you don’t have, you can easily apply for PAN Card online or you can go to any nearest cyber cafe. They can do it for you but they have some charges. If you already have a bank account kindly fill a form called KYC (know your customer) go to your branch and fill that form, KYC is nothing but it ensure your identity should be verified to avoid financial institutes and relevant companies from being used by terrorists and money launderers in a criminal act.
KYC is mandatory for all the banks, the order was passed in the year 2004.
4. What are debit and credit card and how it benefits us?
Debit and credit card often refer to a plastic card or plastic money. What is debit and credit card? In simple debit and credit is virtual money that you use to pay or buy anything. Now debit and the credit card are two different cards.
What is a debit card?
Debit card allows you to pay or buy any product if you have a money in your bank account, let say you have 10000 rupees in your SBI bank account and you want to buy a mobile which will cost you Rs.9600 but you don’t have cash you can simply use your debit in the absence of cash. You give your debit card to a mobile store, provided mobile store should have the facility of swipe machine or you can also buy online but what if you want to buy a mobile which is more than 10000 Rupees what will you do? The answer is no. You can only buy or pay within your limit; it means the debit card will only allow you to shop if you have money in your bank account.
The debit card also allows you to withdraw cash from a cash machine (ATM). The best part of the debit card is that you don’t have to rush to your bank and to stand in a queue and to get your money out through withdrawal form or check.
Note: If you are an SBI Bank user, you also opt for Green Remit Card. It is the paperless initiative of SBI for those who frequently deposit. This is specially designed to avoid a queue.
What is a credit card?
A credit card is same as a debit card, but the only difference is that the money which is on your credit card is credited from your card issuer (generally a bank). A credit card allows you to pay in advance for your merchant without any interest or charges but you have to pay back within the grace period (time limit set by the card issuer). If you cross that grace period card company will apply interest rest and send you a bill that you have to pay.
5. Benefits of credit cards:
Credit cards allow shopping if you don’t have money in your bank account.
It also offers cash back (not in every transaction) option.
Allow you to pay in EMI
Offer small loan (needs to check from Credit Card Companies)
It also helps you not to embarrass in front of friends and family.
6. Beware of fraud and scammer!
If you are a debit/credit holder beware of fraud and scams.
How will you lose your money if you are not alert?
If you received a call and some ask you to share your card details don’t do that because the bank never asks anyone to share card detail over the phone. According to RBI (Reserve Bank of India) rules, no bank can ask their customer detail over the phone.
If you received a mailing or messages state that you won 1 lakh or Crore rupees don’t trust them and delete immediately.
Someone asking you to pay over the phone, bill or any payment and asking your card details don’t share.
Fraudster usually looks for the card number, pin number, the expiration date, cv2 number which is back on your card next to the signature panel. Sometimes they ask your date of birth as well.
Sometimes scammers ask you to share internet banking Id and password never share these details and don’t even send through email as well.
If you fully convinced to anyone and you want to share your financial detail best to call your bank before sharing your details. Bank representatives will let you know about their legitimacy.
Small awareness can help to save your hard work money.
7. What is mobile and internet banking?
Mobile and internet banking are two different kind of payment processor, let me explain one by one.
What is Mobile Banking?
Mobile banking allows you to handle your finance. Generally, there are two types of transaction push and pull I don’t want to go in deep basically when you are using mobile banking, 2 things you should know IVR and SMS.
let’s discuss how it works.
IVR (interactive voice response)
IVR basically works on any phone either mobile or landline phone. It is very simple you just need to call your bank number and you have to choose mobile banking option and follow the instruction and you have done. Sharing you detail in IVR over the phone is 100% safe.
SMS (short message service)
SMS allow you to make the transaction from any mobile device. You need to text for the specific transaction request.
What is internet banking?
Internet banking is the facility provided by the bank for a customer to access their account.
Now let see how it work
Internet banking can be accessed from your computer or mobile phone. When you registered for internet banking you will get your user Id and password. User Id and password can change anytime after you enter in your account. When you access your account, you will see fund transfer, imps, rtgs, Neft, instant transfer and several more options. You can add your family account with whom you want to deposit money and you can also make a payment to a merchant from your internet banking.
As I said you can access internet banking from a computer or mobile. A mobile app is more famous and convenient these days. You can download your bank app from Google play store enter your user id and password and you can start enjoying this service.
8. Is online banking is safe?
Online banking is safe and authorized to the only legitimate merchant and it’s 100% safe if dealing with trusted sources. I have been using internet banking since 2007 and I am very happy with this service, I don’t have to rush to my bank for anything. I know there are a number of hackers working to get people financial detail. They generally target big giant not people like us and anyway bank always ahead to keep their security tight in order to avoid unusual activities.
9. What is e-wallet?
E-wallet allows the user to stock money to their e-wallet account and you can also store multiple credit/debit card and bank account securely to e-wallet account. It is an online prepaid service where you can stock money and use it when you need it. The purpose of this e-wallet application is to eliminate account detail at the time of payment, if you have an e-wallet account, you don’t need to punch your credit/debit card detail nor your internet banking ID and password, you can simply use e-wallet account that’s it.
10. How can we use e-wallet?
There is a number of e-wallet app is available in Google play store. You can choose one but before that, you should have smartphone and internet facility in Mobile. You can also access e-wallet from your computer. E-wallet especially designed for a mobile user to avoid cash transaction.
How does it work?
Go to Google play store and get e-wallet app I will recommend considering paytm and freecharge is good. Both are good in service, once you install these apps then you have to create an ID and password.
Once you enter in the app you will have an option like new payment where can pay to mobile, dth, electricity, broadband, shopping and several more options available in the app.
11. Top E-Wallet App in India
State Bank Buddy
Indian Government Introduce new app “digital locker” called Digilocker. It is same as an e-wallet, but the difference is that you can only store your personal documents like Aadhar card, PAN Card, Academic certificate, etc. Service was launched by the Government of India in February 2015 to provide a digital wallet for a personal document to the citizen of India.
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