Financial Raview-E-mony

 "Money", as we know it, has evolved over time. It has undergone a lot of changes over the course of human evolution. It changed many faces as per the prevailing circumstances, conditions, rules and laws thereof.

First form of money, as we all might know, was the barter system initiated hundreds of years ago. Barter System went for quite a long time before actual money in form of silver and gold coins was introduced as part of the global currency, throughout the world.

The graduation to cash as a form of currency happened as early as in the 11th century in China! Even though a few other civilisations adopted the idea of the cash, it gained popular support sometime in 1600s in Spain and slowly spread across the world. The worldwide acceptance of notes and coins as a form of currency happened in the 18th century and has remained a major part of our life till today.

However, the advancement in technology and changing needs of the global population required a change in the way money was used. People wanted transactions to be made easier and faster so that they didn't have to carry lots of cash with them. Since the world is becoming a smaller place when it comes to conducting business, there was a need to ensure that transactions be made easier without depending on the physical currency.

Also, the world acknowledged that the benefits of development should reach each and every person on the planet, but it wasn't possible given the way business was conducted. Physical cash has a lot of limitations and challenges including its usage for corruption, sponsoring of terrorism and generation of black money that has negatively impacted every country in the world. This has also been one of the reasons why a lot of benefits don't reach the deserving population and money stays in the hands of a selected few. To address these and many such problems, the western countries embraced the idea of electronic money and India is also fast catching up with the trend that will reduce dependence on cash.

The recent event of demonetisation in India resulting in the Rs. 500 and Rs. 1000 currency notes declared as outdated by the Indian Government, is a part of this thinking only. The government wants the citizens to lower their dependence on physical cash and adopt e-money in their life. This would help in the long term to bring down black money in the economy, counter the presence of fake currency and thereby reduce terrorist activity along with increasing the more honest means of doing business. Another impact of this exercise would be an increase in the collection of taxes and going forward, increased income for the government from taxes would mean more resources for the country's development.

Now that we are talking so much about e-money, let's understand what it is all about

WHAT IS E-MONEY?

Just like the term e-commerce, e-money is also related to the biggest revolution of the last century, internet! The way shopping has been made easier while sitting in the comforts of your home, in a similar manner the complete give and take of money for all your transactions is being made simpler with the help of e-money. All you need is a bank account and a phone!

In simple words, all monetary transactions that do not involve physical cash and are conducted electronically come under e-money. This includes transferring of cash from one account to another, paying of bills like electricity, water, internet etc., doing shopping, buying movie or train tickets and all such transactions. The entire dealing happens in

a virtual world, which is connected with the real world and all information about the transactions are stored in the computer files of the concerned banks and other financial institutions.

With the government pushing for e-money in every sphere of life, the day is not far when we will not require physical money at all and the society will truly become a cashless society

HOW DOES E-MONEY WORK?

There are various instruments for transactions and channels made available to an individual to make use of e-money Every instrument comes with different features and benefits customised according to specific needs of a person. For example, a credit card works differently than a debit card. Both these cards help you to make payments for your purchases or to pay bills, but the way they function is absolutely different. The only common thing between the two is that you don't need physical cash with you. Both these cards ensure that you get access to funds for your monetary needs and just by a simple swipe of the card, you can complete your transaction, anywhere, anytime.

When you swipe the card on a card machine and enter your password, the information contained in the magnetic strip of the card is passed on to your bank. The bank then, based on the availability of funds in your account or credit limit, authorises the transaction and approves it. All this happens in a matter of few seconds, thanks to advanced technology After that, the vendor (the shopkeeper) presents the receipt of the transaction to the bank, which reimburses the vendor by transferring money in his account.

Now, e-money is made available to a customer under two major categories

CHANNELS OF E-MONEY

Banking Channel. This is the traditional channel of getting access to your money and with time has come up with different tools and instruments that help e-money. An individual can open a bank account with any bank of his choice by submitting the required documents. Once the account is open and active, he can deposit money in it and start the electronic transactions through various options available. To ensure everyone is part of the banking process, the government along with banks and financial institutions has simplified the entire process of opening a bank account so that even an illiterate person can have a bank account.

Payment Banks: These are formed to help the customers have simple banking transactions. Unlike banks, these cannot accept deposits and don't offer any loans as well. This works on the principal of preloaded banking where you put the money in such accounts and then use it for shopping and paying bills while being on the move. You can use these services with either smartphones or feature phones, anywhere, anytime

We shall try to understand both the above channels in detail now.

BANKING CHANNEL

As described above, it is a regular channel of making financial transactions. Initially the country only had government-run banks, but in the past almost three decades, a lot of private banks have been given the license to conduct business and provide efficient services to the customers. These private players took the lead in using technology to their advantage and soon everyone followed them. Now every bank offers more or less the same kind of features and benefits in terms of technological advancements that go a long way in reducing the dependence on cash and ensuring that more and more people we e-money

Let's have a look at the way you can do electronic transactions with the help of regular banking process

1. Chequebook:  This is the simplest and oldest way of electronic transaction. After you open a savings or a current account in a bank, it will issue you a chequebook. You can write a cheque in favour of an individual or a company

for a particular amount and deposit in their account, Based on the available funds in your account, the money will be transferred in their account without involving any cash. This ensures that all financial transactions are recorded leading to transparency and accountability on both the receiver as well as the issuer's end.

2. Debit Card:  This is a free of cost card issued to an account holder to be used for shopping and paying bills. This card involves a magnetic strip that stores an account holder's complete data along with the details of funds available in the account

The amount of money you can spend on this card is equal to money available in your account. Let's understand this with an example

Manish has Rs. 55,000/- in his account and he goes for shopping to a shopping mall. There he buys groceries, a new smartphone, few clothes and a pair of shoes. His total bill comes to Rs. 31,000/-. The cashier will swipe his card in the machine at the payment counter and Manish will have to enter his password. Within seconds the bank approves the transaction as Manish's bank balance has enough balanor to pay for his shopping. He signs the transaction receipt, keeps a copy for his future reference and walks out of the mall without using cash at all.

You can also use the debit card for online shopping and payments of utility bills. The concerned websites will require your card details before confirming the transactions. To give you a perspective, as of March, 16, India has 661.8 million debit card holders.

3. Credit Card: An individual can get this card through any bank if he fulfils the basic criteria. Physically, it works on the same principle as a debit card. The only difference is that the issuing bank offers a credit limit to you instead of using your own funds for transactions. Based on your financial status, the bank offers you a particular amount that you can spend for purchases and other payments within a specific period of time.

For example, you have a credit card with a maximum usable limit of Rs. 2 lakh. You can spend all or a part of this in a given month whether online or at various establishments like restaurants, shops, petrol pumps and the likes After the month is over, the bank will send you a statement and give you 15 days of time to make the payment against the bill. If you don't make the payment on time, you will be charged late fees and interest on the pending amount. This might sound costly, but a credit card does come handy in times of emergency when you don't have sufficient funds at your disposal and some urgent expense comes up

When you use the credit card for online transactions, the concerned websites will ask for your complete credit card number and other details for verification before authorising the transactions. On the other hand, when you use the card physically at any of the outlets, you just need to swipe the card in the machine and enter your password to seek approval from your bank

As of March, 16, India has 24.5 million credit card holders.

4. Internet Banking: This is a feature offered by your bank account where in you will be given a user code and password to make a financial transaction straight from your account. You can log in to your account on the bank's website and make fund transfers, pay bills, recharge phones and even avail services like opening a fixed deposit account, buying insurance and mutual funds too! It is secured by multiple layers of security to keep all transactions safe and only for your eyes

5. Mobile Baking: It is the same as internet banking, the only difference being you can do all your financial transactions from your smartphone or a feature phone while being on the move. You only need internet and for certain transactions not even that to complete a transaction. You can download the mobile banking app on your phone and after due authorisation and security updates, you can conduct complete banking operations from your phone.

Imagine you're going to college and a sudden plan is made to watch the latest movie. You might not have time to go and stand in a queue to buy the tickets. In such a case, you can simply log on to the ticket booking website, book the tickets and make payment through your account or using a debit/credit card, right from your cellphone. Or you can order a bouquet of flowers and caler for that last-minute birthday celebration of your beloved, right from your phone in a matter of seconds without having to go anywhere. It is not important whether you have cash with you or not, as long as you have money in your account or sufficient credit limit on your credit card.

6. Telebanking: This is another option provided by the banks to conduct basic business over the phone without even having to speak with a human being. The banks offer a customer care number that is also toll free that you can dial and resolve a lot of queries. For example, you can call the customer service number to order a new cheque book, change your bank passwords, know about your bank balance, and get resolution to any of your other queries. Mostly, the IVR (Interactive Voice Response) can help to resolve your queries or you can also speak with a customer service representative for further help, who can help you with obtaining loans, changing your contact details, and other such activities. In short, you can avoid going to bank and yet avail all the banking facilities at your fingertips

7. ATM Banking: ATMs (Automated Teller Machines) have made the life of an individual really easy. Their primary purpose was to withdraw cash, but now they also serve the purpose of applying for loan, finding the account balance, transferring funds to other accounts, depositing cheques and various other such activities.

Let's understand the process of transferring funds through an ATM: Firstly, you have to insert the card in the ATM machine and verify your identity with the ATM PIN (password) After verification, you will get the options for various transactions that you can conduct. Select the option to do funds transfer. After that enter amount you want to transfer and the account number/16digit debit card number of the recipient of funds and press OK. This way you can transfer funds from your bank account to any other bank account in the country!

8. Real-time Gross Settlement (RTGS): This facility has been approved and supported by the Reserve Bank of India to facilitate real time transfer of large amount of funds from one account to another. It is the fastest

possible system in the country where in huge amounts need to be transferred. The requirements are that both the receiver and donor accounts should have Core Banking in place. If both the dealing entities fulfil the core banking requirements, they would be assigned an Indian Financial System Code (IFSC). It is an eleven-digit code comprising of alphabets and digits. The first four alphabets identify the bank and the seven digits indicate a single branch. This code is unique to every branch of a bank and makes it easier for a quick, efficient and secure transfer The minimum amount that needs to be transferred via RTGS should be Rs. 2lakhs and there are guidelines about the working hours during a day when these transfers can take place. However, every bank follows a timing as per the respective working hours of their branches. One important point to be considered is that there are no charges if you are the recipient of the funds, but if you're transferring money, there are some nominal service charges that vary depending on the amount and time of transfer, RTGS helps in reducing cash involvement and thereby makes the process absolutely secure since cash need not be carried across different cities to make payments.

9. National Electronic Funds Transfer (NEFT): This feature is enabled to help the individual, firms and corporates to transfer funds from any bank and any branch to any other branch of any other bank across the country. Since there is no requirement of any minimum amount to be transferred, it makes it extremely easier for individuals to transfer funds. When you log in to your account on the bank's website and try to do fund transfer. the bank will ask you to add the recipient based on his/her account details. Once you add the individual, you can transfer the funds easily. However, certain banks have limitations of timings and therefore not all transactions happen in the real time like RTGS. Still, the time taken isn't long and most of the times transfers happen within the 24hour window. This reduces the dependence on cash if you have to make a payment to someone in a different city.

10. Electronic Clearing Service (ECS Credit); Famously known as "Credit Push" or one-to-many facility, this is provided for bulk transactions that happens at a foved period of time like yearly, half-yearly etc. This is used by large corporations or government institutions to transfer funds in the form of salaries, commissions etc. This helps the large organisations to avoid the cash route and directly tratafer payments in the receivers accounts. Not only it eases up the entire payment process, but also makes it time efficient, secure and transparent to enhance accountability.

11. Electronic Clearing Services (ECS Debit): This facility is also known as "debt-pull" or one-to-many facility where a lot of small consumers/individuals can make payments to one single organisation or entity towards payments of bills and such other services. The services include water bills, electricity bills, insurance payments and the likes. However, since a lot of people are not aware of such a facility, it's acceptance levels in the society are also low

12. Immediate Payment Service (IMPS):Under this feature, an individual is given the benefit to transfer money to anyone within the same bank or any other bank in the country and that too 24X7. This is an initiative taken by National Payment Commission of India (NPCI) and the whole purpose is to make transactions extremely easy and empower the individual to conduct business on the move. This feature is exclusive for mobile banking.

Let's explain how it functions:

First of all, both the receiver and the sender have to be registered for this service and download the mobile banking application on their respective phones. Once registered, both the parties will receive a 7digit numeric MMID (Mobile Money Identifier) code from their respective banka. The nest step is when the sender enters the mobile number of the receiver, MMID of the receiver and the amount to be transferred in the mobile app. Once the transaction is complete, the receiver will be credited the funds immediately and is mostly available free of cost. This eliminates any delay or fraudulent activities that may happen when dealing in cash.

The entre process of reducing the dependency on cash is to increase transparency while conducting business and to make it easier and less time consuming. As a thought, cashless economy sounds like a brilliant idea, but it is not possible to achieve that ever. This has a lot to do with human behaviour, ease of business and various other factors affecting the economy and the financial world. Even some of the most advanced countries like Germany and the USA, with infrastructure to support cashless economy, have not been able to achieve the desired objectives. However, what is achievable is the reduction of cash and increased usage of digital currency or e-money for most of the necessary transactions. Since India is still a developing economy and one of the fastest in the world to embrace technology, we as a nation have skipped a few steps of financial evolution.

Western nations the the USA or Europe graduated from cash to plastic money (credit cards etc.) few decades earlier than we did and now they are transforming their economies into digital kinds India, on the other hand, is still not completely comfortable with the plastic money, yet is taking glant strides in embracing and adopting e-money in various forms, thanks to superlative growth in IT sector and initiatives by the government and other entities to make digital India a reality,

With the penetration of ulecom, smartphones and internet increasing in the country, the time is right for everyone to adapt and start using e-money. However, as mentioned above in the banking channels, there might be still some challenges to seamlessly perform the banking operations. This has largely to do with the literacy level of the country rather than the ease of operations

Since most of the people are just joining the mainstream of financial engine and trying their hand for the first time when It comes to banking and internet, it is not easy for them to be well-verse with the entire process, no matter how easy it Is. Keeping this factor in mind, the non-banking or indirect banking channels have mushroomed and are helping the consumers. Not only are these easy to deal with, but go a step further in reducing the time taken for transactions.

Let's study these in detall now:

PAYMENT BANKS

As we know, India is a cash dependent country and the value of currency in circulation is almost 11-12% of the GDP. Even though banking industry has supported financial services for a long time, it has still not been able to cover the entire country reaching out the deep interiors and bringing the benefits of banking to every individual. Hence, the government decided to seek help from private players to ensure the benefits of banking reach each and every person. no matter which town or village ane belonged to. At the same time, the world is undergoing a change with internet becoming a huge part of the way the world functiom. The private players have been fast and efficient enough to embrace the technological advancements and come out with solutions to make financial inclusion easier for everyone. The administration and other negulatory bodies have done their bit to make policies that help the expansion of banking sector and educate the consumers about the benefits of e-money. At the same time, private companies are simplifying the entire process of using digital money

The most important result of all these efforts is an e-wallet! When you hear the word wallet, the first thought that comes to mind is a thick and bulky leather holder that contains not only your entire cash and cummcy, but many other essentials as well. While going for shopping or on a long trip, it becomes a hassle to keep so much of cash handy. If not that, finding an ATM to withdraw cash in a secluded desert safari or high up in the mountains is a nightmare in times of emergency. This is where an e-wallet comes handy where you can story your money in digital form that can be used anywhere, anytime, within a few seconds! In simple words, it is a preloaded feature available to you to make purchases and pay bill without using your debit or credit card

HOW CAN YOU GET AN E-WALLET?

There are a lot of specialised companies with the license to offer only the e-wallets and then there are banks that are also trying to operate in this field to ensure their customers remain loyal and increase their revenues. You can choose your options after doing a thorough research about the maximum benefits being offered by each one of them. Once you decide on a company, you can download their application on your phone. In the beginning, you will have to submit the complete details about your bank accounts, card details etc. that will be stored in your e-wallet and will be used later for transactions. Downloading any e-wallet and storing information is extremely easy and user-friendly and If you follow the basic guidelines, it is safe as well.

HOW TO USE AN E-WALLET?

It is the easiest of the options among all payment options available on the digital platform. Yes, even easier than using a credit/debit card! Let's take you through the step by step process of using an e-wallet:

First step is to download an e-wallet on your phone

Once the app is installed, open it and you'll need to create an account. For that, use your phone number to complete the registration process. During the registration, you will receive a one-time password (OTP) through SMS. With this, you can set up a password to log in to your account.

After logging in, you have to load the account with money, the upper limit for which is fixed at Rs. 20,000- You can transfer this money using your debit or credit card.

After filling your e-wallet account with money, you can make payments. You can use the funds to pay for movie tickets, buy a coffee at a coffee shop, recharge your phone or pay for the cab. The e-wallet provides you three options to make the payments: Firstly, you can scan a QR code that a seller will have at his shop. This code contains necessary information about the shop. Now consider you're paying for a coffee. At the time of payment, open the e-wallet, select "Pay" option, scan the code, tap the name of the shop as it appears after scanning the code and tap to pay! The money will be transferred immediately to the seller's e-wallet account. Second method is to use the phone number of the seller and thirdly you can give the QR code in your app using which the seller will scan your code and then you can transfer money. As simple as that!

Once the e-wallet is out of cash, follow the above-mentioned procedure to refill it with money and make payments without any hassle or the trouble of entering your 16-digit card numbers or account numbers for every transaction.

The process explained above is the basic one, but every e-wallet provider may have different names, colours or terms to follow while following the same procedun

The trend of providing financial solutions in the form of e-wallet were initiated by private companies, but large private and state-owned banks have also jumped in the fray realising the potential of the market. Most banks have now their own versions of such wallets and offering different features and benefits to their customers.

TYPES OF E-WALLETS

As per the RBI guidelines, there are three kinds of e-wallets allowed to operate

Closed E-wallet: These are the wallets that a company issues to its customers for in-house purchases and transactions only. With these wallets, one cannot withdraw, redeem or deposit cash. For example, you made a purchase from an e-commerce site like Flipkart and made an online payment. However, later you cancelled the order and instead of retuming the cash, the company credits that money in your account on the website. Now if you make another purchase from the website on a later date, you can use that money for the payment. For the company, though, the money in this walet is a liability and there is no interest earned on it. When you make another purchase, the money moves to their revenue!

Semi-closed E-wallet: This type of an e-wallet can be used for payment of goods and services at establishments and sellers that have a contract with the issuing company to accept the payments. You can pay for groceries if the seller has the similar e-wallet installed or transfer funds from your e-wallet to another e-wallet. Also, you can pay for train bookings, payment of utility bills and such services this e-wallet. However, like closed e-wallets, these also do not allow withdrawal or redemption of cash

Open E-wallet: These e-wallets offer you to pay for goods and services, do a fund transfer and also withdraw cash at ATM's or business correspondents. These e-wallets are issued by banks either individually or in collaboration with other private companies

Benefits:

Now that you understand what are e-wallets, how to use thern and their various types, let's have a look at their benefits and who does actually benefit from these financial tools.

1. E-wallets make any financial transaction extremely easy, fast and transparent without having the need to remember multiple passwords or carrying all your credit/debit cards all the time, everywhere,

2. Those who don't have access to organised banking channels or are not comfortable using other tools like debit card, credit cards, internet banking etc, can use e-wallets for most of their financial transactions on a routine basis

3. Unlike credit card or debit card (in some cases where transactions can be dedined due to non-availability of credit limit or sufficient funds in the account, e-wallets guarantee a financial transaction as these are pre-loaded with your funds.

4 E-wallets offer you the option of filling the account with as little as Rs. 10 and offers various cashback and discount schemes to attract your patronage

5. You can use e-wallets to transfer funds in your friends or family members accounts thereby helping them in case of an emergency. For example, if one of your friend is trying to book a railway ticket and is short of funds and time to withdraw cash, you can immediately transfer funds in his e-wallet from yours.

6. Using e-wallet means you can track your complete expenditure and that can come handy at the time of filing tax returns since every expense will be recorded

7. Since you'll have a better track record of your expenses, you can have a tight control over your monthly budgets. The chances of mindless spending will be substantially reduced

8. Another benefit, however small, is that you pay the exact amount for your purchase without worrying about having the necessary change or not getting adequate change back. Every napee saved is nipee earned, isn't it?

Risks Involved:

Every technology comes with its advantages and disadvantages or risks. E-wallets are very new for the world and for countries like India, these are revolutionary products. The chances of them positively impacting our economy and common man are higher, but still we can't overlook the risks that they possess. The risks are simply because it is a new channel of financial transactions and how they will impact a country as big as ours is still unknown. Understanding of this medium is extremely important before you start using them just as a herd mentality. Presenting herewith are some of the risks associated that need to be considered before initiating e-wallets in your life.

1. Most of the Indian population is still illiterate and even if they are literate, most are not tech savvy and find it difficult to work on internet. Also, the internet penetration is as low as only 34.8% as of 2016 and only 26.3% of all the phones owners have smartphones. Hence, it is not only difficult to access these services, but for those unaware about the technology it will be a herculean task to get used to it fint and gain trust. Without proper knowledge and training, the chances of financial transactions by mistake are high!

2. Since technological knowledge is lens, chances of online fraud also increase in the form of identity theft. As such in the world of internet, frauds and phishing incidents are increasing and even educated people are getting affected. Hacking may make individuals prone to losing their hard-earned money if extra care is not taken for secure transactions

3. The e-wallet charinel is an evolving one and the legal aspects are still under development. Therefore, in case of a dispute, the redressal mechanism may not come to any help. The response to complaints is still not effective and it's a long and tedious process to file grievances and seek solutions.

4. Even as there are a lot of discounts on offer, there are charges for loading your e wallet account and also for money transfers. These vary for every service provider and are normally higher than those charged by your bank for similar transactions

5. The maximum risk comes from losing your phone. All e-wallets need a phone for all such transactions and many people have a habit of either forgetting their phone or their phones getting stolen. In such a scenario, all the information stored in the phone is at risk and the thief can use all the money stored in your e-wallet account to make transactions and you can't stop it. Also, if you don't have any cash with you and your phone gets stolen, you will be left helpless, especially if you're travelling in a foreign country or in a secluded place.

6. Your phone need to be always charged for a successful transaction. If the battery gets over and phone switches off, e-wallet will be of no use.

7. There is no facility of a refund in case of a transaction you have done by mistake. At the most, you can use the same funds for any future purchase to redeem them

Don't let these risks scare you away from e-wallets as the evolution of such services is happening on a large scale at a faster than expected speed. These are the financial tools of today and will only improve with time as every company involved in providing these services is working to enhance the experience of end consumers. Technology is being improved with every passing day and newer and better features are being added to improve the overall experience as well as make the entire process extremely safe and secure. Rising number of companies in the sector only results in a satisfied customer and that's what's driving this innovation not only in India, but the entire world.

Top E-Wallets Available in the Market

Even though e-wallets are comparatively new in the market, there are already a handful of companies looking for your attention and offering better services. Let's have a look at some of the top players in the market:

PayTM: This is one of the largest companies in the country providing e-wallets. It was launched in 2010 and in a short span has become a leader in the market. It is a semi-closed e-wallet company that allows you to make bill payments, make money transfer and avail services in different sectors like retail, entertainment, food as well as travel. Recently they have also tied up with small grocers as well as educational institutions to help ordinary customers make payments, especially after demonetisation.

Mobikwik: This is yet another major private player in the industry that not only allows you to add fund using your debit card, credit card, net banking, but also offers you doontep cash collection service, just so that you find it easy to pay bills and make purchases without any need for cash.

Citrus Pay: This e-wallet not only offers services to individual customers, but also provides payment solutions to big businesses. In a short span of time it has got more than 800 million customers and is still growing.

Freecharge: Targeted at youth, the e-wallet not only provides regular services, but also offers attractive discount coupons to attract consumers, who can use their services, get cashbacks and enjoy freebies!

Money on Mobile: The best part about this e-wallet is that it is available in multiple languages so that it can cater to the entire country. It helps people from every nook and comer of the country to make payments in a language comfortable for them

Ezetap: It is a company founded in 2011 and offers the businesses a solution to accepts payments via electronic devices. For customers, the benefit is receiving an e-receipt through email or SMS.

PayUMoney: Another e-wallet, but has worked hard to differentiate itself from other players in the market. It offers the regular features of an e-wallet along with benefits like one-touch check out, discounts/cashback on every transaction as well as instant refund on order cancellations!

State Bank Buddy: It is a semi-closed e-wallet launched by State Bank of India for its customers, but is also available for non-SBI customers. It offers services in 13 languages and provides the option of setting a reminder for due payments, money transfers and mini-statements of the transactions done.

HDFC PayZapp: It is one of the top e-wallets being offered by a bank that offers all possible e-wallet features and benefits along with the option to compare flight and hotel tickets and even buy music with just one click!

ICICI Pockets: The best part about this digital wallet offered by ICICI Bank is that you can fund it from any bank account in the country. It uses a virtual VISA card for transactions that can be used on any website or mobile application in India and provide you exclusive deals with associated brands. You can even use this wallet to transfer funds to your WhatsApp contacts and email ids!

Citi MasterPass: This global e-wallet from Citibank offers you the convenience to shop at over 2,50,000 e-commerce merchants with a single click and keeps a record of all your credit cards, debit cards, transaction details, loyalty cards, loyalty points at a single place.

LIME: It is yet another wallet offered by a bank, AXIS Bank and is the only e-wallet to offer you a feature of rounding up all your change and invest in a deposit, apart from offering a shared wallet with your loved ones. It also offers a feature to analyse your spending and make better decisions.

Airtel Money: Not only can you use this e-wallet to recharge your phone or pay your bills, but also use it for online shopping. It's safe and secure as well since it requires a secret 4-digit mPin for every transaction.

Jio Money: Recently launched e-wallet, it offers you to bookmark your favourite retailers so you don't have to waste time in searching for them.

With so many options and new companies coming in, the market will only expand and that would mean better benefits for the customers. Going cashless need not be fashionable, but with so many benefits, ease of doing a financial ransaction and gains outdoing the risks, it is advisable to move on with the times and embrace the change. Your smartphone is like a minicomputer that's there to help your life make easier. Make the best use of it with going digital and ensuring your financial transactions become more organised, easy and time-efficient.

BARCODING

While we are going digital when it comes to making payments for anything and everything we purchase or use a service for, it is no surprise that even the process of keeping a track of a product, where it came from and other such details is also going digital. When you go for shopping in a mall and even at regular shops (increasingly in cities), you must have noticed the price tag also displays a set of black and white lines in a zebra strip. Ever got surprised to see what those lines are all about? What do they do? How are they helpful?

Well these are what we call as Barcodes! Thanks again to technology that's been developing for more than half a century, the barcode technology helps to keep a complete record of all the products that are being sold in a store so that even if one piece goes missing, you would instantly come to know if it was sold or stolen! There are more benefits as well, but first let's understand what is this technology all about and how does it work.

Barcodes are a series of exactly 95 black and white alternating lines (of different thickness) arranged together looking similar from a distance, but actually very different in reality. These lines store digital information about the product and its details. Only a barcode scanner can read this information and after scanning the barcode, connects it with the information stored in the computer about the product. This information is used to find out the price of the product stored in the computer that can be changed at frequent intervals as per the operational need.

What's The Use of A Barcode?

Running a superstore or a mall isn't very easy. With thousands of products on the product shelves, keeping a manual track record of each and every product is mind boggling. How can one possibly keep a record of which product is selling more, which is less, when to place a new order, how to find out if someone is stealing the products? This is where a barcode comes handy as it helps you maintain a centralised record of every product on a computer system that tracks the product, their price and stock levels. Stealing or missing of items absolutely vanish as everything is recorded. Also, if the price of a product changes or some discount is added, it is not physically possible to keep making changes physically on every such item. The easiest option is to change the price in the computer system so that while billing. the updated price will be automatically considered. From the customer point of view, the entire process of billing and payments becomes efficient, easier and way faster than manual billing. It's not a pleasant thought of standing on long queues in a shopping mall and the cashier entering the details of each and every product manually into the computer to generate your bill. With a blip of the barcode scanner, the information is scanned and bill ready! This whole technology consists of three steps: Finst where the products' entire information is stored on a central computer system. Second, barcodes are printed on all the products. Third, a barcode scanner that reads those codes at the time of checking out.

How Do Barcodes Work?

The way information is stored in a barcode can only be read by a machine. The combination of black and white stripes reflects different text characters that follow a pre-decided algorithm for that particular product. For every product or itern, there is a different set of algorithm. Primarily the entire algorithm based on digits 0-9 and that's what these black and white line represents. Simply using the numbers instead of barcode would have been easier, but confusing as there could be difficulties in printing numbers incorrectly or looking at a product upside down and digits changing their value. For example, digit 6 can be read as digit 9 if looked upside down or a badly printed digit 8 can look like digit 3 to the computer. Hence, barcode is designed and each of these digits is given a specific set of black and white lines.

To give you a better perspective, let's take number 1. It is denoted by two white stripes, two black stripes, two white stripes and one black stripe. Now, number 2 is represented by two white stripes, one black stripe, two white stripes and two black stripes! The differentiating factors are the thickness of these stripes whin a similar product with variants is considered!

These barcodes contain three types of information:

First part talks about the country where it originated from

Second part is about the manufacturer of the product

The last part contains details about the product. The same product with types will have different barcodes. For example, a pack of juice with 4 pieces will have a different barcode than a pack of same juice with 6 pieces.

Types of Barcodes:

There are primarily two types of barcodes:

1. ID (Linear) Code: These are the regular codes mostly used in almost all the products that we come across. These codes organise information horizontally from left to right and can be read by any barcode scanner easily. These are the vertical lines with numbers printed beneath them so that in case the scanner can't read the lines, the cashier can manually feed the numbers in the system to generate the bill. This code can have 20-25 characters and if you want to increase the information, the barcode Incwases in size and that's a cause of concern.

2. 2D Code:  This is increasingly being used and becoming common due to the simple fact that it can store more information than a regular barcode. These are more complex as organize information both vertically and horizontally yet take less space than a ID code. Also, 2D code can have up to 2000 characters that would mean more information in less space! However, you require an image scanner to read these codes instead of a regular barcode scanne.

Depending on the type of product and need of information stored, either of the barcodes is used. However, that they are a necessity is a foregone conclusion. More and more establishments are adopting this technology for the various benefits that it brings in, both for running a store efficiently and for the customers trying to get the best product with complete information and a faster check out from the billing section

There was another e-money Initiative launched by Hon'ble PM of India Shri Narendra Modi on 30th of December, 2016 which is called BHIM. It was launched to ensure hassle free e-payments through mobile phones. Let us try to understand it in details

WHAT IS BHIM

BHIM stands for Bharat Interface for Money and is named after the architect of Indian Constitution Babasaheb Dr. Bhimrao Ambedkar. This is a mobile based application (app) developed by the National Payments Corporation of India (NPCI) based on Unified Payment Interface (UPI)

At the moment, this app is available only on the Android based phones, but very soon it will be available on other platforms including i-OS & Windows phones too

What Does It Do?

The basic necessity to use this app is to have a bank account with a bank that supports UPI-based payments and a mobile number linked to that account. If you have that, BHIM can help you to send and receive money to other UPI accounts and addresses and there is no compulsion to have a smart phone to do the transaction. Even a feature phone can handle these kinds of digital transactions. Apart from this, you can also send money using the IFSC (Indian Financial System Code) and MMID (Mobile Money Identifier) Code to users, who don't have UPI-based bank account. The application also offers you the option of creating your own QR (Quick Response) Code for a particular amount of money. The merchant (shopkeeper) can scan this code to collect their payment against products/services sold to you. Is It Similar To Mobile Wallets

An e-wallet or mobile wallet is something where you can transfer money to someone using the same wallet as you. Also, you can only transfer the money that's available in your e-wallet. BHIM, on the other hand, allows you to transfer

money directly from your bank account to any recipient, who is having a UPI-based bank account. If the receiver has UPI-based account, all you have to do is ask for their VPA (Virtual Payment Address) and make the payment to that account. Besides, as mentioned above, there is also the option of using IFSC or MMID to send or receive money without any delays. It totally eliminated the need to remember your account number or other details and you don't have to share such personal details with anyone. Currently, as per the guidelines, you can send Rs. 10,000/- per transaction and up to Rs. 20,000/- within 24 hours

How Does BHIM Work?

Since BHIM works on the principle of transferring money from bank accounts, having a bank account is mandatory and your mobile number should be linked to this particular bank account. Once these basics are in place, all you need to do to start the process is to download BHIM app on your mobile phone. Once it is downloaded, the following three things need to be considered:

3. Passcode: This is a preventive mechanism to avoid someone accessing your app by mistake or with bad intentions. Once you download the BHIM app, you will be asked to set a 4-digit passcode. Do remember it as even you will get access to the application only after entering this password/passcode.

4. VPA (Virtual Payment Address): At the moment, there are more than 30 banks offering you this service. The app will ask you to get linked to your bank. However, at the moment you can only link this app with only one bank account. So, if you have multiple bank accounts, link it to the most important one and if make it your default account. If you want to receive money or transfer money in/from any other account, then you need to deactivate the default account and make the other account as your default account. The basic payment address is your mobile number UPI. To receive money from others, you can simply give them this address. The other option is to create a VPA that will be something like yourname@UPI. Hence, funds can be sent or received either your mobile number or VPA from any of your accounts linked to the app.

5. UPI PIN: It is a simple process that helps in completing the transaction and ensures that no one else hacks into your account. To set it up, go on the home page, select Menu, then Bank Accounts and set UPI PIN. The app will require you to enter the last six digits of your Debit/ATM card along with expiry date. After this, you will receive a

One-Time Password (OTP), which you will enter in the app and set your UPI PIN. It's as simple as that!

After you have set the basics, let's explain what will the main Home age display:

Transactions: If you click on this tab, it will show you past transactions and any pending ones.

Profile: Clicking this tab will display your VPA or the mobile number@UPI for easy reference.

Bank Account: This will reflect your default account linked with the application. You can know your account balance with the same.

To Send Money:

Type the mobile number of the person you want to send the money to and BHIM will send that person a notification.

Type the amount in the app and click on pay. If the receiver doesn't have UPI, then you can click on the three dots above the Send Money option. That will show you the Account + IFSC option, where you can enter required details and transfer funds.

Risks Involved:

Even though the entire transaction is happening over secure networks, the chances of you losing your phone and debit card may pose substantial risks. This is because the UPI PIN can be created easily and funds can be transferred to unwanted people/entities. Hence, be careful with your phone and debit card to avoid any losses or complications.

Digital transactions are the way forward and the sooner everyone joins this process, the easier it would be for everyone to cut down on time and efforts for monetary transactions. Ensure that not only you, but your friends and family also have such apps to make it simple to have financial transactions.

Case Study

Now that we all know that with the advent of online shopping portals, it has become far more convenient to shop from the comfort of one's home. Also, all these shopping portals offer easy online payment options, where e-money comes in the picture.

Here we are going to study one of such portals and explain in easy steps, how to shop and make online payments using your E-money.

ECOMMERCE PORTAL - FLIPKART

As innovations enters our lives and makes things easier for us, it also brings a set of challenges for each retail market. The E-Retailing form of market where E-money was to be introduced and used extensively, was something unheard of to the Indian consumer in 2007. That was the time when Flipkart, an e-Commerce company, was founded in the year 2007, by Mr. Sachin Bansal and Binny Bansal, both alumni of the Indian Institute of Technology, Delhi. Both these IITians worked for Amazon.com, an international e-commerce shopping portal, before coming up with the idea of having a similar e-commerce portal to sell books online.

Flipkart today operates exclusively in India, and is headquartered in Bangalore, Karnataka. Flipkart in actuality is registered as a company in Singapore, and owned by Singapore based holiday company. When the company started, it had an annual capital of just 4 lakhs rupees. Today it aims for an annual turnover of Rs. 4500 Crores.

The company has certainly carved a niche for itself in terms of market share, reputation, popularity in the online retail market and smooth operations. The name and fame that Flipkart has earned in short span of time, it has already become a threat to its competitors in the market, for the range of products and alluring offers it has on display. With its own product range called "Digiflip" and a recently launched range of personal healthcare and home appliances called "Citron", Flipkart has a come a long way, from initial years when it was only selling books. Today it sells every product under the sun and showcases offers that none other portal does. In recent years, the company's acquisitions also saw an up-graph when it acquired the online shopping giants like Myntra and Jabong.

The success of Flipkart lies in the business strategies that it applied to capture the online market in India in just few years and the innovative strategies implemented by it to create online business, which brought out its ability to stand out among numerous E-Retail sites.

E-commerce portals like Flipkart have proved to be instrumental in promoting the use of E-money and making hassle free, safe and secure cashless transactions.

Now, let's take you to the Flipkart portal and help you make an online shopping through the portal using your E-money.

This is how Flipkart looks like when you go to the portal www.flipkart.com

You make a choice of the product from the wide range displayed under gender and product categories.

Let's say, you chose a pair of shoes for yourself and want to order the same. 

Once you made the choice, you continue to next step by clicking on BUY NOW. You are then directed to various payment modes that you can use to pay for your shoes, which are listed in the below screenshot

If you wish to use online payment method using your E-money which is in your bank account, you will use Net Banking or Debit Card and you are asked to fill in the required details from your debit card including the CVV number which is at the back of your Debit Card. This number is the unique identification number of your payment card, which you should never share with anyone, and key in only when you are making a transaction yourself.

Once you have keyed in the details, you are then asked to choose whether you wish to complete the transaction using your ATM Pin provided by your bank, or you wish to receive an OTP (One Time Password) on your phone to close the transaction.

Based on your choice, you are asked to key in the OTP or ATM Pin to authenticate your transaction. If you chose OTP on mobile, you will receive it on your cell phone within few minutes and then you can put it in the space provided for the same, on your screen.

This page will automatically timeout after 180 second.

As you key in the OTP, your e-money is deducted from your account balance and paid to Flipkart for the shoes that you bought and your product starts getting ready for the delivery, to reach you in next few days.

See, it is that easy to make an online transaction using E-money. Thus, you can buy any product that you wish to, from such online shopping portals, without using cash and making secure payments through online payment gateways using your E-money.

It is always a sensible choice to use E-money and make cashless transactions, and create a clean, digital money exchange environment for businesses and individuals alike.

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