Digital Payment Is A Way Of Payment

1457 WordsMar 11, 20176 Pages
Digital Payments Digital payment is a way of payment where the, payer and payee both use electronic modes to send and receive money. The transactions in digital payments can be completed using cards, mobile or internet based setups. It is an instant and convenient way to make payments. Several macroeconomic factors indicate that the basic ingredients for successful creation of a digital ecosystem are rapidly falling in place, far exceeding the supply side capabilities that support the Indian government’s agenda of financial inclusion. For instance, digital banking offers numerous advantages that work towards improving the same, largely riding on the fact that Indian consumers have shown tremendous preference for digital technologies, with…show more content…
However, as noted by a recent inquiry done by Ministry of Finance, there remains a case for catalysing the process of attaining greater financial inclusion, with the overarching goal of including over 90% of underserved sections of society in the ambit of formal finance by the year 2021. When one considers the array of financial services that are available as a part of the formal financial system, there is an observable hierarchy of demand within financial products (Source: Payment Council of India). The focus of the Committee was not merely on enabling payments, but to strengthen the ecosystem for “digital” payments. The question therefore why “digital”. As per Committee there are four key factors that make paperless payment instruments and systems more desirable. 1) Cash is expensive, while there are several perceived benefits of transacting in cash (such as instantaneous settlement, relative anonymity, and the notion of security associated with holding physical value), there are several latent and implicit costs associated with cash. 2) Technology has been advancing at a rapid pace to deliver robust, secure and convenient payments solutions. This enables rapid delivery of payment services to large sections of the population. 3) Digital payments allow for services to be delivered at lower costs, afford greater scalability and greater ease of access. This
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