Understanding Digital Payments: Process and Security
Digital payments revolutionize the way transactions are conducted by enabling cashless transfers between payers and payees through various modes like banking cards, mobile wallets, and internet banking. This article delves into the concept of digital payments, different modes available, the pros and cons, and the process involved. Emphasizing the importance of safeguarding digital transactions, it highlights the significance of security measures to protect against potential risks and fraud.
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DIGITAL PAYMENTS - PROCESS AND SAFEGUARD
3 Table of contents Slide No. Title What is digital payment ________________________________________________________________ 05 Modes of digital payment ______________________________________________________________ 06 Pros & Cons of digital payment Safeguard digital transactions ________________________________________________________ 16 ______________________________________________________ 17 Digital Payments Process & Safeguard
4 Objective Safeguard digital transactions Concept of digital payment Modes of digital payment Pros & Cons of digital payment Digital Payments Process & Safeguard
5 What is digital payment? Way of making cashless payment Transaction between payer and payee takes place online, without physical exchange of money. Money exchanged digitally using banking cards, internet, smartphones. Digital Payments Process & Safeguard
6 Modes of digital payment Banking Cards Mobile wallets Internet Banking Point of Sale USSD Aadhar Enabled Payment System (AEPS) Mobile Banking Unified Payments Interface (UPI) Micro ATMs Digital Payments Process & Safeguard
7 Bank cards Debit Cards Credit Card Prepaid Cards Preloaded from your bank account Issued by banks based on credit history Linked to your bank account Used to pay at shops, online shopping Safe to use, limited amount of transaction Widely accepted Digital Payments Process & Safeguard
8 Internet banking NEFT RTGS IMPS Instant interbank electronic fund transfer through mobiles or online banking Transferring funds on real time on gross settlement basis Payment technique for transferring funds Money transferred within two hours of transaction done Beneficiary's mobile number & Mobile Money Identifier is required for doing transaction Fastest way of remitting funds via banking channel Digital Payments Process & Safeguard
9 Unified payments interface (UPI) Platform for accessing different bank accounts by one mobile application UPI ID and 4-digit PIN are required to send and receive money Apps like Google Pay, BHIM, Phone Pe supports UPI payments Digital Payments Process & Safeguard
10 Mobile banking System that allows customers to perform a number of financial transactions through a mobile device Every bank provides their own mobile banking App Scope increasing with introduction of mobile wallets, digital payment applications and other services like the UPI. Digital Payments Process & Safeguard
11 Mobile wallet Virtual wallet service that can be used by downloading an app for making payments Services offered includes paying utility bills, recharging mobile, sending and receiving money, online shopping Example are Paytm, Mobikwik, Airtel Money Digital Payments Process & Safeguard
12 USSD based mobile banking *99# How do u Register ? Dial *99# from your Registered Mobile Number (RMN). Enter your Bank s name or Bank IFSC. Select your Bank Account Enter Last 6 digits of your debit card. Enter your expiry. Create your UPI PIN Mobile banking facility for doing mobile banking without internet connection or using smartphones Dial *99# from your phone and follow the instructions on your screen Digital Payments Process & Safeguard
13 Point of sale (POS) Point-of-sale (POS) terminal captures the card data and secure transfer of funds from the customer s account to the merchant s account. Physical, Mobile & Virtual PoS Use in 3 easy steps Input amount Generate receipt Swipe/Scan Digital Payments Process & Safeguard
14 Micro ATMs Card swiping machines through which Business Correspondents (BC) deliver essential banking services Conduct transactions like withdrawing cash, balance enquiry, cash deposits, etc. Operate via fingerprint scanner Portable machines having connectivity through GSM, makes it possible to travel from village to village Digital Payments Process & Safeguard
15 Aadhar enabled payment system (AEPS) What can you do? Account balance Aadhar to Aadhar fund transfer Cash deposit Cash withdrawal Payment transactions AEPS allows Aadhaar-linked bank accounts to transfer money between two bank accounts Prevalent where there are no branches (rural areas) Can do transactions at any AEPS point without any pin or password (AEPS points Micro ATMs) Digital Payments Process & Safeguard
16 Pros and cons of using digital payments Disadvantages Advantages Ease and convenience Instant Payment Low risk of theft Availability of many options Password Threats Risk of Being Hacked Processing fees, set up fees adds to the cost Risk of theft or loss of Smart Cards Digital Payments Process & Safeguard
17 Safeguarding digital payments DO s Change password assigned by bank for the first time Download app from trusted source Use trusted Wi-Fi network and computer for digital transactions Install an antivirus on computer to remove viruses that steal important information Always clear your browser cache after each session Log off completely from banking website, close the browser and log off computer, when not in use Register for SMS alerts to keep track of transactions in your account Digital Payments Process & Safeguard
17 Safeguarding digital payments DONT s Don t disclose your personal or confidential information to anyone over email/SMS/phone call Don t enter login or other sensitive information in any pop up window Avoid accessing Internet banking accounts from cyber cafes or shared computer Do not share confidential information like PIN with anyone Never use the Remember Password feature provided by browsers to save your net banking password Don t use mobile devices to store User ID, password and other account related sensitive details Don t leave your internet banking session unattended. Always logout completely. Digital Payments Process & Safeguard
To reach out to your nearest Chartered Accountant (CA) visit caconnect.icai.org
