CA Snigdha Nigam
Recent demonetization of high value notes has resulted in unprecedented rush at bank branches and ATMs, non-availability of cash and banks filled with crowd has resulted in most of the people turning to cashless economy.
Now when it’s hardly 7 days left, and there is still much crowd and cash isn’t available, most people have chosen either of the two options, either go moneyless… or go cashless!!!
In current scenario, if you want your business or profession to survive, you have to go cashless.While most of us have chosen to get cashless, it’s very important for all of us to learn the most secure way to get cashless!!!
Let’s first list out the available options to go cashless (Do let me know if I skipped any!!) :
1. Pay through cheques. (And get cheque-less soon!!!!)
2. Pay through debit or credit cards. (but your card can be cloned, take good care)
3. Use Net banking. ( Never share your details, and avoid viruses on Your device, keep it secure)
4. Use third party wallets like PayTm or freecharge. ( these apps are not regularized by any authority in india)
5. Use wallet apps by banks like SBI buddy( good option)
6. Use mobile banking application like SBI Freedom. (best of all)
7. Aadhar based payments. (not much developed yet)
8. MMID based payments through *99# (time consuming, many times networks don’t support)
9. UPI ( extension of mobile banking )
We’ll discuss all options one by one.
1. Cheque payments:
Cheque payments are good, these are simple but time consuming, because you don’t get payment instantly in your account, you have to deposit in in your account and it may take 1-2 working days to get the payment, and cheque dishonor chances are there too. You can’t make petty payments through cheque always. Many frauds in cheque payments also happen.
2. Pay through debit or credit cards:
Most of us, including me use debit or credit cards to make payments for shopping etc.
There are few rules we all should ensure that we follow when we use cards for payments.
Let me discuss these:
a) First golden rule is never share or card and pin details with anyone.
b) Don’t write down your pin anywhere except your mind!!
c) Never share the mobile number that you have updated in your bank account. Keep it a secret. This rule applies to all options.
d) Don’t keep too much money in the account you do shopping from.
e) If you use card payment for online shopping, make sure u use a secure browser.
f) Always remember and save your bank’s customer care helpline no, so that you can call then instantly in the time of need
g) Keep changing your pin regularly.
h) Block your card instantly if you feel your credentials are compromised.
3. Use Net banking:
Online banking facilities typically have many features and capabilities in common, but also have some that are application specific. The common features fall broadly into several categories:
a) A bank customer can perform non-transactional tasks through online banking, including –
- Viewing account balances
- Viewing recent transactions
- Downloading bank statements, for example in PDF format
- Viewing images of paid cheques
- Ordering cheque books
- Download periodic account statements
- Downloading applications for M-banking, E-banking etc.
b) Bank customers can transact banking tasks through online banking, including –
- Funds transfers between the customer’s linked accounts
- Paying third parties, including bill payments and third party fund transfers
- Investment purchase or sale
- Loan applications and transactions, such as repayments of enrollments
- Credit card applications
- Register utility billers and make bill payments
c) Financial institution administration
d) Management of multiple users having varying levels of authority
e) Transaction approval process
Though net banking gives you real banking experience online, it comes with many risks too hence it’s always suggested to take some security measures when you use it.
Some of these are listed below:
1) Never share or write down anywhere your user ID and password details.
2) Always use a secure web browser, don’t surf unsafe websites on same device you use your net banking from.
3) As I said earlier, don’t share the mobile no. which is updated in your bank account.
4) Always remember, You can never be a victim until You choose to be one, be very careful while making financial transaction.
4. Use third party wallets like PayTm or freecharge:
A mobile wallet, in simple terms, is a virtual mobile-based wallet where one can store cash for making mobile, online or offline payments. There are various types of mobile wallets in India, such as open, semi-open, semi-closed and closed – depending on the type of usage and payments that can be made. Wallets are growing rapidly as they help in Increasing The Speed Of Transaction, Especially For Ecommerce Companies and all Ecommerce Marketplaces have integrated with such mobile wallets too.
To be true, I do never suggest anyone to use such apps, infect I would urge all to uninstall these apps, because these are most unsecure and costly option. These apps are not governed by any authority and if you suffer any loss due to them, there are very low chances that you will be paid back, considering the ineffective cyber laws in India.
Though these are convenient and you just pay in few clicks, still the one who receives pays commission on that amount and they receive it usually after 3-4 working days resulting in interest loss too. Why let other companies to have fun with your funds??
I would say uninstall them all!!!
5. Use wallet apps by banks:
Mobile wallets by banks are very good options, these are secure and well governed too.
Some of these popular apps are SBI Buddy, ICICI pockets and HDFC chillr. Out of these SBI buddy is my favourite.
This mobile wallet application was launched by State Bank of India to let users transfer money to other users and bank accounts, pay bills, recharge, book for movies, hotels, shopping as well as travel.
This semi-closed prepaid wallet offers its services in 13 languages and is available for non-SBI customers as well so in place of using PayTm, why not use SBI Buddy??. This app also allows its customers to set reminders for dues, money transfers and view the mini-statement for the transactions carried out.
The only problem that I find in mobile wallets is the amount you spend from your wallet don’t show as an entry in your bank account. I like to find every entry in my account statement, so that I can calculate where I spent my money.
6. Use mobile banking application like SBI Freedom:
Mobile banking is a service provided by a bank or other financial institution that allows its customers to conduct financial transactions remotely using a mobile device such as a mobile phone or tablet. It uses software, usually called an app, provided by the financial institution for the purpose. Mobile banking is usually available on a 24-hour basis. Some financial institutions have restrictions on which accounts may be accessed through mobile banking, as well as a limit on the amount that can be transacted.
Transactions through mobile banking may include obtaining account balances and lists of latest transactions, electronic bill payments, and funds transfers between a customer’s or another’s accounts. Some apps also enable copies of statements to be downloaded and sometimes printed at the customer’s premises; and some banks charge a fee for mailing hardcopies of bank statements.
Mobile banking is different from mobile wallets in the sense that mobile wallets only provide you mobile payment facilities whereas mobile banking apps gives you all banking facilities on your mobile phone.
You can do everything from mobile banking application within seconds, you can make transfer through NEFT or IMPS instantly. SBI Freedom is one of the apps, it gives you many facilities like fund transfer, account balance enquiry, bill payments, and you can make FDs or RDs too. You can make FD instantly and close it instantly too, you can schedule your payment for a later time even. You can link all your accounts in single application and access them all. What else do we want? And the best part is, one User ID is synced to one mobile phone only, your user ID can’t be operated on any other phone.
This way your phone become your personal bank. Believe me, I haven’t visited my banker since I moved to mobile banking app!!
All you need to care about is to keep your mobile safe, never share your credentials, and don’t install too many apps on the same device.
7. Aadhar based payments:
Now aadhar based payment system is also offered by national payments corporation of india(NPCI). Many facilities like fund transfer balance enquiry, cash deposit and withdrawal are offered in aadhar enabled payment system.
This system is not much popular yet though it has great opportunities in coming years.
8. MMID based payments through *99#:
*99# is a USSD (Unstructured Supplementary Service Data) based mobile banking service from NPCI (National Payments Corporation of India) that brings together Banks &TSPs(Telecom Service Providers). Using *99# service, you as a bank customer can access mobile banking services by dialing *99# from your mobile that is registered with the bank.
The main features or benefits of this service are;
- You can access your bank account without enabling internet service. This service uses voice connectivity.
- *99# is the common service code across all telecom service providers.
- No additional charges if you use this service while roaming. But Rs 1.50 (per session) will be deducted from your mobile account balance for using this service.
- This service works on all GSM providers and mobile handsets.
- You can use this service any-time and any-where (round-the-clock).
- There is no need to install any APP on your mobile handset to use this mobile banking service.
- Fund transfer request can be initiated 24/7 (round the clock) using the *99# service including on holidays. The Funds remitted using the *99# service can be received by the beneficiary 24/7.
The best part about this service is that you can use it even if you don’t have internet facility and a smart phone.
It’s a bit time consuming and sometimes networks also don’t support, so make sure you have good network coverage.
The pre-requisite to use *99# service is that your mobile number should have been registered with your bank(s) for the mobile banking services. If you are already using mobile banking, you will be able to use this service without any additional registration by dialing *99# from your GSM mobile handset.
If you have not registered for mobile banking service, you will have to contact your respective bank(s) for mobile banking registration.
Unified Payments Interface (UPI) is a system that powers multiple bank accounts (of participating banks), several banking services features like fund transfer (P2P), and merchant payments in a single mobile application. UPI was launched by National Payments Corporation of India with Reserve Bank of India’s (RBI) vision of migrating towards a ‘less-cash’ and more digital society. UPI has built on the Immediate Payment Service(IMPS) platform.
UPI platform can be used for:
- Immediate money transfer through mobile device round the clock 24*7 and 365 days.
- Single mobile application for accessing different bank accounts
- Single Click 2 Factor Authentication.
- Virtual address of the customer for Pull & Push provides for incremental security with the customer not required to enter the details such as Card no, Account number; IFSC etc.
- Bill Sharing with friends.
- Merchant Payment with Single Application or In-App Payments.
- Scheduling PUSH and PULL Payments for various purposes.
- Utility Bill Payments, Over the Counter Payments, Barcode (Scan and Pay) based payments.
- Donations, Collections, Disbursements Scalable.
- Raising Complaint from Mobile App directly.
Any Android smartphone user who has an account with a UPI-partnered bank can download a UPI app, register himself and make fund transfers using MMID.
Hope this article was useful to all readers, please contact me for any doubts or clarification on the same. Get cashless but carefully.
(This article is written by CA Snigdha Nigam (ACA,DISA, MBA -Finance, She is a practising Chartered Accountant, with major exposure in bank audits. She can be reached at firstname.lastname@example.org)