(11)List down different methods of digital payments?

Answer: Following are some of the methods of digital payments:



(1)Banking cards:
  • Cards are among the most widely used payment methods and come with various features and benefits such as security of payments, convenience, etc.
  • Some of the most reputed and well-known card payment systems are Visa, Rupay and MasterCard, among others. 
  • Banking cards can be used for online purchases, in digital payment apps, PoS machines, online transactions, etc.

(2)Bank pre-paid cards:
  • A prepaid card is a type of payment instrument on to which customer load money to make purchases.
  • This type of card may not be linked to the bank account of the customer.


(3)Unified Payment Interface (UPI):
  • UPI is a type of interoperable payment system through which any customer holding any bank account can send and receive money through a UPI-based app.
  • The service allows a user to link more than one bank account on a UPI app on their smartphone to seamlessly initiate fund transfers and make collect requests on a 24/7 basis and on all 365 days a year. 
  • The main advantage of UPI is that it enables users to transfer money without a bank account or IFSC code. All customer need is a Virtual Payment Address (VPA).

(4)Unstructured Supplementary Service Data (USSD): 
  • This facility is backed by the USSD along with the National Payments Corporation of India (NPCI).
  • The main aim of this type of digital payment service is to create an environment of inclusion among the underserved sections of society and integrate them into mainstream banking. 
  • These types of payments can also be made with no mobile data facility.


(5)Aadhaar Enabled Payment Services (AEPS):
  • This service can only be availed if customer Aadhaar number is registered with the bank where customer hold an account.
  • This is another initiative taken by the NPCI to promote digital payments in the country. 
  • In this type of digital payment, all transactions are carried out through a banking correspondent based on Aadhaar verification.

(6)Bharat Interface for Money (BHIM) app:
  • The BHIM app allows users to make payments or sending money to different bank accounts, virtual addresses or to an Aadhaar number by using the UPI application.
  • One can link his/her bank account/s with the BHIM interface easily. 
  • There are also many banks that have collaborated with the NPCI and BHIM to allow customers to use this interface.

(7)Internet Banking:
  • Internet banking refers to the process of carrying out banking transactions online.
  • Banks offer customers all types of banking services through their website and a customer can log into his/her account by using a username and password. 
  • There are to time restrictions for internet banking services and they can be availed at any time and on all 365 days in a year.

(8)Mobile Banking:
  • Mobile banking is referred to the process of carrying out financial transactions/banking transactions through a smartphone.
  • Many banks have their own apps and customers can download the same to carry out banking transactions at the click of a button.


(9)Mobile Wallets:
  • The digital or mobile wallet or virtual wallet stores bank account or debit/credit card information or bank account information in an encoded format to allow secure payments.
  • One can also add money to a mobile wallet and use the same to make payments and purchase goods and services. 
  • Some of the mobile wallet apps in the market are Paytm, Mobikwik, Freecharge, etc. .