Skip to main content

Use new payment modes to beat the cash crunch

By
Opt for mobile wallets, micro-ATMs, virtual and prepaid cards to deal with the ongoing cash crunch caused by demonetisation
The shortage of cash caused by demonetisation has probably forced you to stand in long queues at banks and ATMs. As far as possible, minimise your use of cash and shift to digital modes of payments. Also, make use of other fintech innovation to deal with your cash-starved situation. 
 
Use a mobile wallet: Download a mobile wallet app on your phone, transfer money from your bank account into it and start using it. All you need to do at a shop is to point your phone at the QR code, scan it, enter the amount to be paid and pay. One problem you could face with wallets is that different merchants accept payments from different wallets. An integrator app like Woohoo can help in this respect, as it allows you to make payments at retailers that accept any of these three wallets: Oxigen, Citrus Cash and PayuMoney. You will also be able to pay at all the retail establishments that Woohoo has partnered. 
 
Accept payments via mobile wallets: Businessmen, too, need to climb on the mobile wallet bandwagon for accepting payment. To receive large sums, the merchant’s wallet needs to be KYC (Know Your Customer)-compliant. “Once the wallet is KYC-compliant, a merchant can accept payments up to Rs 1 lakh,” says Pramod Saxena, chairman and managing director, Oxigen Services India. To transfer money from the wallet to a bank account without limits, merchants should use the Unified Payment Interface (UPI). 
 
Wallet provider FreeCharge has waived both the set-up fee and transaction commission for a limited period for new merchants (credit card companies deduct two-four per cent on each transaction).     
 
Use micro-ATMs: If you have old Rs 500 and Rs 1,000 notes and wish to deposit these while avoiding long queues, one alternative is to use a micro-ATM, offered by IDFC Bank and Oxigen. You probably know someone, say, a household help who has recently moved to the city, and whose bank branch is in her village. Such people can use these micro-ATMs, as the latter accept old currency notes from customers belonging to any bank or branch, provided they have an Aadhaar card. 
 
Customers of all banks can also withdraw money from a micro-ATM. New accounts can also be opened. “Provided you have an Aadhaar card, we can open a bank account within four minutes, in a totally paperless manner,” says an IDFC Bank official. This facility can again be useful for recent migrants who have an Aadhaar card but not a bank account. One drawback is that the number of micro-ATMs is limited.
 
Find a functional ATM near you: Many people have begun ATM-hopping after midnight in the hope of finding one that has cash and is not crowded. Walnut, a personal finance app, has added a feature that provides these bits of information. When a customer who has downloaded the Walnut app receives an SMS alert from his bank after he withdraws cash at an ATM, the information is shared with Walnut. The app then asks the customer: Which bank did you use, and was the queue long or short? The information provided is then shared with all users of the app. “The ATM’s location is shown on a map. If the colour is green, it indicates that it was used within the past one hour,” says Anurag Sinha, co-founder and chief business officer, Walnut.   
Use alternatives to cash-on-delivery: Around 70 per cent of payment to e-commerce companies happens through cash-on-delivery. With customers starved for cash, this mode of payment has ground to a halt. FeeCharge and Snapdeal are now offering “wallet on delivery”. You can now pay from your FeeCharge wallet after receiving a product you ordered from Snapdeal. 
 
eBay has tied up with Oxigen to offer retail-assisted e-commerce service. A customer who does not have access to net banking, debit or credit card can walk into an Oxigen-enabled store equipped with micro-ATMs. He can deposit his old currency notes, and with the retailer’s help place an order for a product on eBay.         
 
Use virtual and prepaid cards: Another option is a virtual card. Oxigen, for instance, allows customers to create a Visa card. Normally, you can get a Visa card only if you are a bank customer. Here, you can bypass the bank route and still get a Visa card, which increases your payment options online. 
 
Due to shortage of cash, many payments have to be done via plastic money. You may feel hesitant to hand over your credit or debit card to your household help to conduct a transaction where you will not be present in person. But you can hand over a prepaid card which has a limited amount of money in it. “If you don’t have the cash to gift at a wedding, you can use a prepaid gift card,” suggests Pratap TP, co-founder, chief marketing officer, Qwikcilver.   
 
24TH NOVEMBER, 2016, THE BUSINESS STANDARD, NEW DELHI

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

By
  New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...
Post a Comment
Read more