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The incumbent Indian government is actively taking steps to promote cashless payments in the country as part of its “Digital India” campaign. While there have already been a few digital payment options for a few years, such as credit and debit cards and net transfer options such as NEFT and IMPs, some new digital payment options have become more prevalent in recent years. The popularity of the latest digital payment options is because of the convenience and flexibility they offer consumers and businesses.
Hence, if you are looking to offer more convenience to customers in terms of payments, here are a few modern digital payment methods you should check out besides cash, credit, and debit cards. And if you are a consumer who is new to the digital payments space, this article will help you get acquainted with these new forms of payments.
Online Payment Methods You Should Know Of
E-wallet is one of the modern digital payment methods, which is growing in popularity in India. An e-wallet or digital wallet is a software-based service that securely stores a customer’s payment details and funds. When he/she makes an online purchase, they can use this wallet to make a payment. You can also use E-wallets to store digital coupons and loyalty card information. Digital wallets eliminate the need to use credit and debit cards. E-wallets can function in combination with mobile wallets using smart technology, such as near field communication (NFC). There are several e-wallets currently in India, including Amazon Pay, PayTM, and Mobikwik.
2. Mobile Payments
With the country increasingly going cashless, mobile payments emerged as a popular alternative for cash payments. There are various forms of mobile payments, such as ‘scan-and-pay’, Unified Payments Interface (UPI), and mobile wallets. You can use mobile payments for making payments to vendors and businesses when purchasing products or services. You can also use them to transfer money between two bank accounts belonging to the same person or from one person’s account to another’s. You can clear your utility bills such as electricity, water, and telephone bills via this mode, along with using mobile payments to purchase travel tickets, make payments at restaurants, or pay at a fuel station.
Several mobile applications are available today that support mobile payments. These applications include PhonePe, Google Pay, PayTM, BHIM, and WhatsApp Pay.
3. Point of Sale Financing
Point of sale (POS) financing is a type of payment option where businesses extend their customers a form of consumer credit at the point of payment. This type of financing option allows consumers to apply for a credit line while purchasing certain products, such as high-value electronic goods and furniture. It may also allow them to purchase items up to a particular credit limit. POS financing has been around for some time and is now becoming popular. With the advancement in technology and the rise of e-commerce, POS financing options have expanded.
We can broadly categorize POS financing products into open-end and closed-end credits. An example of open-ended credit is a traditional credit card, whereas closed-end credits are those that businesses offer to finance a particular product’s purchase.
3.1. Prepaid Cards
Prepaid cards are similar to gift cards. They also work akin to a debit card. These cards are pre-loaded with a certain amount of money, which you can use to purchase products and services. The amount is deducted from the balance in the card every time you make a purchase. Once you use the entire amount, you can reload it with money online or at physical branches. You get your prepaid cards issued by banks, which usually get branded by major credit card companies such as MasterCard, Visa, and American Express. Prepaid cards can be a good option for you if you cannot obtain credit cards due to a bad credit rating or no credit history.
3.2. Mobile Point of Sale (mPOS)
Point of sales (POS) terminals are now a common sight across most big and small shops. However, there is a growing number of mobile POS terminals. According to Global Market Insights research, the global shipments of mPOS terminals will reach 55 million units by 2026. Mobile POS systems are essentially smartphones, iPads, or other wireless devices that can download an app and read cards. Merchants can use mPOS terminals to accept card and mobile payments.
If you are a merchant, the mPOS technology will free you from the confines of physical stores and in-store payment systems and allow you to carry these terminals wherever your customers are.
With the country increasingly moving towards cashless and digital payments, several alternative payment methods have become popular due to their convenience. And these are some of the payment options that have made payments convenient and user friendly.