Rise of Online Payment Modes and Cashless India

By BWA Envoy
March 26, 2022
2 Minutes Read

What is Pradhan Mantri Jan Dhan Yojana?

Pradhan Mantri Dhan Jan Yojna (PMJDY) was launched on August 28, 2018, redefining investment in India. Over the past few years, the focus of creating digital India has reduced cash flow by hand and expanded digital transactions in India. PMJDY was, started to provide a variety of financial services to individuals.

Pradhan Mantri Jan Dhan Yojana features the availability of savings bank accounts, demand- based loans, remittances, insurance, overdraft, and pensions among weaker sections and low- income groups. Basic savings accounts are, opened without minimum balance requirements. Account holders received a Rupay Debit Card and are eligible to receive bank interest on their deposit. Other benefits also include risk insurance, an overdraft facility up to Rs. 10,000 to eligible account holders, mudra schemes, etc. These benefits gave a sense of security; to the weaker section of society, which attracted them into opening a bank account.

With bank accounts, savings interests, and the availability of UPI apps, retailers of Kirana, supermarkets to street hawkers, are now aware of online trading methods directly adding payments for goods and services to their accounts. This led to retentions of QR card scanners and UPI scanners to increase customer base, reduce cash transactions and long queues. This seam lined their business. Then the historical moves to attack black money through demonetization and imposing GST and tax reforms occurred.

These led to a dramatic increase in online payment methods and individuals who prefer online transactions rather than direct cash payments. During the phase of Covid lockdown, digital payment systems grew exponentially with people forced to stay indoors, e-commerce like Amazon, Zomato, Bigbasket, and other aggregators blocked cash on delivery to maintain a contactless delivery system. E-commerce giants offered special coupons and bank discounts to encourage online payments.

There are nearly 750 million smartphone users in India. With easy-to-use payment apps and gateways, the volume of total digital transactions in India increased by about 33% in the Fiscal Year 2021-2022. These online payment apps and platforms have eased the hassle of bill payments, recharge and shopping. To make online transactions more secure RBI, implemented several methods.

How did Digital Payments open up opportunities for small businesses?

Small and medium enterprises and unorganized sectors face some challenges and difficulties in managing and growing their businesses, like receiving payment while buying or selling any goods or services becomes a hassle. To reduce issues there are a few of the best online payment systems for a small business like Khatabook, an Indian app helping SMEs to record their daily financial activities, billing, receipts for payments, and update accounting data. Paytech helps to address payment speed, efficiency, risk protection, and user information that brings significant opportunities for SMEs to improve the performance of their respective businesses.

The top online payment apps in India for easy transfer and receiving payments include

• PhonePe
• Google Pay
• PayTM
• BHIM UPI
• Amazon Pay

These are among the top mobile wallets leading the cashless revolution in India.