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e-wallets , Digital Payments, Definition, Types

e-wallets , Digital Payments, Definition, Types
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Digital wallet / e-Wallet

Confused about what a mobile wallet is all about? Here’s all that you need to know…

A digital wallet refers to an electronic device that allows an individual to make electronic transactions. This can include purchasing items on-line with a computer or using a smartphone to purchase something at a store. An individual’s bank account can also be linked to the digital wallet.

What isa mobile wallet?

Simply put, it’s a mobile-based virtual wallet, where you preload a certain amount in your account created with the mobile wallet service provider, and spend it at online and offline merchants listed with the mobile wallet service provider. For example, if you go to a coffee shop A, which is listed with XYZ mobile wallet, you can pay for your coffee through the phone. Depending on the service provider, you can also pay through app, text message, social media account or website.

Transactions you can make

Anything and everything! Right from utility payments to e-tailing and offline payments, you can perform most of your daily transactions.
Types of wallets
There are four types of mobile wallets in India – open, semi-open, semi-closed and closed. Open wallets are the ones that allow you to buy good and services, withdraw cash at ATMs or banks and transfer funds. These services can only be jointly launched with a bank. M-Pesa by Vodafone and ICICI is one such example. Apart from the usual merchant payments, it also allows you to send money to any mobile numberbank account. Airtel Money is a semi-open wallet, which allows you to transact with merchants that have a contract with Airtel. You can’t withdraw cash or get it back. You’ll have to spend what you load. Then, there are closed accounts, which are quite popular with e-commerce companies, where a certain amount of money is locked with the merchant in case of a cancellation or return of the order, or gift cards. Lastly, there are semi-closed wallets like PayTM, which do not permit cash withdrawal or redemption, but allow you to buy goods and services at listed merchants and perform financial services at listed locations.

Digital Payment system in India

Aadhaar Enabled Payment System

Aadhaar Enabled Payment System is a way to get money from the bank account. This system of getting money neither requires your signature nor Debit card. You don’t even need to visit a bank branch for getting money through the Aadhaar Enabled Payment System. Rather, it uses Aadhaar data for the authentication. Like UPI and USSD, this is another initiative by the NPCI.

Benefits of Aadhaar Enabled Payment System

  • You can perform financial and non-financial transaction through the banking correspondent.
  • A banking correspondent of any bank can do the specified transaction of any bank.
  • There is no need of signature or debit card.
  • It is fast and secure. No one can forge your fingerprint.
  • Banking correspondent can reach to the distant rural place with the micro POS.

Transactions Through the AEPS

The Aadhaar Enabled Payment System gives you banking facility on the go. However, It gives you only basic services. These 4 services can be done through the AEPS.

  1. Balance Check
  2. Cash Deposit
  3. Cash Withdrawal
  4. Aadhaar to Aadhaar Fund Transfer

Except Fund transfer, you can perform all the transactions through the banking correspondent of any bank. For fund transfer, you need the BC of your own bank.

Requirements for AEPS

Through the Aadhaar Enabled Payment System, you can get money without producing any paper or card. However, your Aadhaar number should be registered with your bank account. If you did not linked your Aadhaar with a bank account the Aadhaar Enabled Payment System would not be useful to you. For AEPS transaction, you need following information.

  1. Aadhaar Number
  2. Bank IIN or Name
  3. Fingerprint

It means, you have to only remember your Aadhaar number to do the bank transaction. It is just like remembering own mobile number.

Why Aadhaar for Authentication

Remember, at the time of Aadhaar enrolment, your fingerprints and iris image were taken. These biometric data gets linked to the given Aadhaar number. These biometric data is unique to a person. No two person have the same iris image or fingerprints.  Thus, your Aadhaar number can be verified by your finger prints. This biometric authentication makes Aadhaar the perfect proof for the banking transactions. Indeed, It has replaced the signature.

How Aadhaar Authentication Works

Suppose, you claim to be Vijay and produce the Aadhaar number of Vijay. To verify it, bank official would take your fingerprints in a machine. The machine gives the fingerprint details to Aadhaar Payment app. The app immediately tallies your fingerprints with the fingerprints of the given Aadhaar. If it matches, the system would permit for the transaction. In case of mismatch, the system would not do any transaction.

How Aadhaar Enabled Payment System Works

It surprising that only through the Aadhaar number you can access your bank account. But it is possible because the Aadhaar is linked to your bank account. This linking leads you to your bank account. The fingerprint is authenticated by the UIDAI. In response to a transaction, UIDAI tells to the bank about the authenticity of the user. Once, UIDAI authenticates, the bank gives green signal to the transaction.

Thus, in the Aadhaar Enabled Payment System 6 institutions are involved.

  1. You, the bank customer
  2. Banking correspondent – The facilitator of AEPS
  3. The bank of BC – The bank to which banking correspondent is attached
  4. Your Bank – the bank with which you held the bank account
  5. NPCI – It does switching, clearing and settlement of transactions
  6. UIDAI – For finger-print authentication

Charges of AEPS

Unlike UPI, the AEPS is a relatively costly transaction. It can go upto Rs 15 for one transaction. On the other hand UPI charge is free to nominal. For AEPS, three institution involved can charge fees.

Conclusion

AEPS may be  costly than UPI and USSD but it gives a lot of convenience to the rural people. It would bring bank to their doorstep and save much time and transport expense. It would be just like a visit of ATM at every doorstep. That is why government calls the POS as micro ATM.

What is UPI App: Unified Payment Interface of India

UPI is a payment system which facilitates the fund transfer between two bank accounts. This payment system works on the mobile platform. Sending money through the UPI app is as easy as sending a message. You are not required to give bank account details for the fund transfer through the UPI payment system. UPI is one of the most advanced method among all the digital payments.

Benefits of UPI

UPI is revolutionary. It will make the banking transaction a breeze. The RBI governor Rajan considers the launch of UPI as the Whatsapp moment.

  1. The UPI transfers the fund immediately. No restriction of holiday or working hours. The bank strike will also not affect the UPI payments.
  2. You do not require the bank account number and IFSC code of the recipient.
  3. You can transact from many bank account through a single UPI app.
  4. You are not required to wait up to 24 hours to send money to a new payee. Anyone would get money immediately.
  5. You can send bills and get money once the client approves it.
  6. You can use the Cash on Delivery without paying cash to the delivery boy. Just approve the bill and the delivery boy would get confirmation.

How UPI is Better Than IMPS

Till now I was using the IMPS method of fund transfer. It also transfers fund immediately, 24 x 7. But, UPI has some advanatges.

To send the money through the UPI, you don’t need to know about the bank of the recipient. It is necessary in the case of IMPS.

To use the IMPS, you need the bank account number and IFSC code of the recipient.

Only through the UPI, you can ask for the payments through the banking channel. In fact, one touch would complete the payment. You would agree that this method of getting payment would have more success rate.

You can’t pay for online shopping through the IMPS. But UPI gives the easiest way of online payment.

 

 

Virtual Payment Address (VPA)

The UPI payment system does not use the bank account details of the recipient. But, there should be an accurate identification of the money recipient. Ultimately, all this convenience is fruitful if the money goes in right hands.

So, every user of the UPI apps must have a unique ID. This unique ID is called as the Virtual Payment Address (VPA). Now you can frown on this new headache of remembering the VPA. But, don’t worry. It is going to be very easy. It would be as easy as a mail ID.

Rather, It would be similar to the mail ID. For example vivek@icici, Rajan@bob, Sohan@axis

In fact, the App provider bank would allot the VPA to each user. You can choose the VPA similar to the mail address.

You can give this VPA to anyone to receive the money. The app would itself keep storing the VPAs of the person to whom you have transferred the money. It is like saving contacts in Gmail. So, from the next time you don’t even require VPA of the recipient.

What is the Charge of UPI Transfer

This is the next question in your mind. What is the extra cost of this extra facility?

Actually, You would be surprised, this extra convenience doesn’t come with the extra cost. Rather, It is too cheap to believe.

A transaction through the UPI would cost about 50 paisa. Whereas the fund transfer through the NEFT costs at least Rs 2.5. On the other hand, the IMPS fund transfer charges minimum Rs 5. The payment through the credit cards is much costly however the seller bears it. Now seller can pass the benefit of low cost of the transaction to you.

 

How To Get UPI APP

As I have told you in the beginning, the UPI payment system works only through the mobile application. Thus, you need a smartphone and internet data pack.

There are several UPI Apps. You can choose any of them. Each bank can launch its UPI-based APP. Banks can also incorporate UPI features into their existing mobile application. Such as, the ICICI Bank has incorporated UPI into the iMobile and Pockets. In fact, most of the banks have incorporated UPI in their existing mobile application.

Hence, if you already have an app of a bank, the update would be sufficient. Otherwise, you can download the UPI enabled app from the google play store. As of now, the UPI enabled apps are made only for android. Soon, the windows and iOs customer would also enjoy this.

Which UPI App should I Download

There are several UPI apps in the Google Play store. You may be confused. Which App should you download?

Should I download the UPI enabled app of your existing bank?

Actually, you are free to download any UPI enabled app. It can be from your bank or from any other bank. Choose an App which has the better interface.

However, I understand, that the obvious choice would be the app from your bank. But, don’t fret to try the other apps. It is a free market!

 How To Connect With Bank Account

The UPI has made the fund transfer very easy. But It is not a mobile wallet. Unlike the mobile wallet, you are not required to credit money into the UPI app.

Rather, the every fund transfers take place through your bank account. UPI app just acts as the link between you and your account. In other words, It has made the bank account transaction much easy and cheap.

So, to establish the link between you and your account, you have to connect UPI app to your bank account. This is a one-time process. It is done when you download a new UPI app.

While connecting to the bank account, you have to authenticate it through the card details and OTP. Once, your UPI app gets connected to a bank account, you can easily transfer fund to any person.

Send Money Through the UPI App

To send money through the UPI app, you have to go through these steps.

  • Open the UPI app using the passcode. The Passcode is mandatory to open the app.
  • Click on Send money. Choose the bank account from which you want to send money. If you have linked one account, you are not required to choose.
  • Select the receiver. You can choose a receiver using the VPA as well as the bank account number and IFSC code. So, it is better to get the VPA of money recipient.
  • Add the VPA, if it is not already added.
  • Enter the amount and send the money. Before the final confirmation, you have to enter the MPin.
  • The money immediately gets credited to the account of the recipient.

Security of UPI Payment

The united payment interface is as much secure as internet banking or mobile banking. To transfer the money through the UPI app, one has to go through the two-factor authentication.

  1. To open UPI app, you have to give a PIN.
  2. To transfer the money, again you have to enter the MPIN.

All other transactions also go through the two two-factor authentication.

Conclusion

The UPI payment system is revolutionary. It makes the non-cash payment a very easy affair. Moreover, the NPCI is coming with new features of UPI. Soon the UPI 2.0 would be launched which has more flexibility, easy and wide reach. You should adopt this method of payment because it also reduces the black economy.

USSD *99# Banking: Payment and Balance Check W/O Internet

Mobile banking has brought the bank account in your hand. Today, you can check bank-balance, get a mini statement and do a payment through the mobile banking. But, what if you don’t have a smartphone or you don’t have the internet? The answer to this problem is the USSD based mobile banking. Just dial the *99# and see the magic. You can do all those things which are available to a person with smartphone and 3G data. Almost every bank including SBI, ICICI, HDFC, PNB, Axis and BOB support *99# USSD Payment.

What is USSD

Did you ever try to get the mobile balance by dialling a certain code? Did you see the recharge vendor using certain codes to access mobile services?  These are the USSD codes.

The codes which directly communicate with the server of telecom company is called as the USSD. You must have noticed that this code starts with ‘*’ (asterisk) and ends with # (hash). The meaning or full form of the USSD is unstructured supplementary service data.

USSD for Banking

As USSD code connects to the telecom operator’s server, it also connects to bank’s server. Hence, it gives you access to your bank account and performs some transaction. The entry to your bank account is given on the basis of registered mobile number. Thus, you must use registered mobile number to dial the USSD code.

The connection to the server of your bank goes through the servers of telecom companies. The NPCI handles all the technicality of this USSD service.

A special number *99# is fixed to access the banking services. This number works across the banks. This system of banking transaction is termed as the NUUP

More About NUUP

NUUP stands for National Unified USSD Platform. It is an innovative service developed by NPCI and launched by the Indian government in 2014. The service allows the banks and telecom service providers to work together seamlessly. The services of NUUP are based on the USSD method.

USSD (Unstructured Supplementary Service Data) is a technology normally used in the field of telecommunication. It is available on all GSM enabled handsets. You do not need an internet connection to use the services of this method. It uses voice connectivity only.

Services Through NUUP

NUUP uses USSD to perform various financial, non-financial and value added services. You can not only check your balance and see mini statement but also send money. There are some more options such as show MMID, generate OTP and change M-PIN.

USSD code For Different Languages

You can also use it in your own language. Currently, this service is available in 10 regional languages along with Hindi and English. Therefore, it is the best banking solution for every common man. The supported languages are-

  1. English *99#
  2. Hindi *99*22#
  3. Tamil *99*23#
  4. Telugu *99*24#
  5. Malayalam *99*25#
  6. Kannada *99*26#
  7. Gujarati *99*27#
  8. Marathi *99*28#
  9. Bengali *99*29#
  10. Punjabi *99*30#
  11. Assamese *99*31#
  12. Oriya *99*32#

Note: Due to some technical limitation currently only three services can be accessed in these languages except English.

  • Balance enquiry
  • Mini statement
  • Funds transfer using IFSC and Account number

 

How To Use USSD code for Banking

First of all, you need to register your mobile number to your bank account. Visit your branch to get your mobile number registered. If your mobile number is already registered then you can directly dial the *99#. Follow these steps for USSD banking

Step 1: Dial *99# with your registered number and wait for 3-5 seconds.

Step 2: Enter the three letter abbreviation of your bank name or first four-letter of bank IFSC or first two digits of bank’s numeric code and hit send or call button.

Step 3: You will see some options for the services. It can be different for different banks. These options are-

  1. Account Balance
  2. Mini statement
  3. Send money using MMID
  4. Send Money using IFSC
  5. Send money using Adhar Number
  6. Show MMID
  7. Change M-PIN
  8. Generate OTP

Account Balance

Use this service to know your account balance. Enter 1 and hit send or call button. You will see the available account balance on screen.

Mini Statement

This service will display the mini statement of your account. Enter 2 in the input box and submit. You would see the  mini statement on the confirmation screen.

USSD Payment using MMID

This service is used for funds transfer using MMID and mobile number. MMID (Mobile Money Identifier) is a code given to you by the bank when you register for mobile banking.

Enter 3 in the input box of NUUP menu and submit.

In the next menu, Enter beneficiary mobile number, MMID, amount and remarks (optional).

Now, you will see another menu. Enter your mobile banking M-PIN and last four digits of your account number (optional) and submit. You will see a confirmation message.

Send Money using Account Number

You can send money using the beneficiary account number and IFSC. If the beneficiary is not registered for mobile banking, this option becomes useful. Enter 4 in the input box of NUUP menu and submit. In the next menu, enter the beneficiary account number, IFSC, amount and remarks (optional). Enter your mobile banking M-PIN and last four digits of your account number (optional) and submit. A confirmation screen showing success response will be displayed.

 

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