November 18, 2019

Digital & Cashless Payment

By Pankaj Jaiswal

The digital payment movement gained momentum around a decade back as more and more startups came into existence. Taking cue, even the government joined the campaign, turning it into a crusade and a political agenda. Not that it was a bad move. In fact, government’s whole hearted support quickly transformed the way people transacted online and offline. 

The urban and rural Indian citizenry realised the power of digital payment gateway such as cards and wallets instead of carrying currency notes. On one hand the ecommerce revolution made sure the impetus did not lose traction on the other hand various states encouraged banks and government departments to go cashless via BHIM, UPI and government sponsored payment mechanism called RuPay, especially targeted at rural folks. 

However, readers should understand that payment gateway and wallet payment are two distinct ways of settling purchases or services. While the former uses credit, debit, and third party cards with predetermined spending limits, wallets are virtual purses that hold virtual money. It is different from others because you can convert this money into physical form by transferring the same to your bank account. In short, payment gateways offer intangible way to pay for products and services via bouquet of settling mechanisms, wallet being one of them.

So, which is the best payment gateway system and what are its pros and cons? Frankly, the Indian digital payment ecosystem boasts more than a dozen brands, and some of the popular ones are CC Avenue, Paypal, Paytm, Razorpay and Rupay.

A recently conducted survey, specifically focused on RuPay and debit card usage showed a remarkable shift in consumer payment methods. The consolidated data pointed towards the rising popularity of cashless payment system.  It was heartening to see that consumers were finally catching up with the idea of going digital.  

On the flip side these numbers are still minuscule, and therefore there is an immediate need for awareness via public education programmes. Some of the reasons for non-acceptance of digital platforms are –

  1. Digital payments are easily traceable and therefore liable for future Income Tax intervention.
  2. Lack of confidence in the ecosystem as frequent online frauds and data leaks have turned consumers wary.
  3. Absence of high speed internet connection in many 2 and 3 tier cities which incidentally is one of the basic requirements of digital payment transaction.

On the other end of the digital spectrum there are people who have embraced it with open arms. I firmly believe it is a step towards rapid progress. Mentioned below are some of its compelling features.

  1. Transparency – Whether you are a merchant or a consumer, digital transactions are traceable and therefore easy to document. Discrepancies are reduced because of electronic foot prints.
  2. Security – Cashless simply means you do not carry tangible currency in your pocket, and therefore losing the same is avoided. 
  3. Efficiency and Expense Control – These are actually related to each other. Digital payment avenues offer consumers an efficient way to handle money. Redundant cash doesn’t fetch interest and therefore it makes little sense to kill your money and turn it into a dead asset. On the other hand with the absence of cash in your pocket the temptation to go overboard with your spending is automatically minimised.

So, what do you think? Is digital / cashless payment a boon or a bane? Personally, I feel it is a bold and progressive step, provided the government and merchants make sure that such an environment is not compromised in any way.

Author [ Pankaj Jaiswal ] is Managing Director of Dotcom Services India Pvt Ltd ( & Netlynx Technologies Pvt Ltd ( He also hold Management Roles in Netlynx Inc , USA  ( & Netlynx Tech, Canada (

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