As you sip your morning tea, it’s time to taste something very interesting. “Cash is King”. Well…you already know this. What’s so special about this? In our country, citizens have taken this saying, to the next level. Our citizens love stuffing cash into their mattress. Less than 5% of payments in the country, are made electronically. Cash is used for everything. In fact a very popular US taxi service in our country, actually broke away from the practice of only accepting card payments. This taxi service now accepts payments in cash.
Time to dwell on another interesting fact. According to RBI data, the total number of debit cards in our country, was a whopping 63.6 crores, at the end of December 2015. We also have are very own, RuPay debit cards. Why do our citizens need debit cards? Our citizens call debit cards, ATM cards. Well…you can guess what they are used for….Withdraw cash and buy groceries. Buy gifts for friends…Pay the room rent…..well actually the owners love to receive the room rent in CASH. So can something be done to convert our country into a cashless economy? IndianMoney.com believes that the dream of developed India is possible, only when we achieve 100% financial literacy. To avail free financial advice/education from IndianMoney.com, all you need to do is, just leave a missed call on IndianMoney.com financial education helpline 02261816111 or just post a request on IndianMoney.com website.
I don’t need to tell you, how risky it is to carry cash in our country. Pickpockets snatch your wallet….Your pocket is cut and the thief runs away in seconds. Carrying a lot of cash at night, is a strict No… Robbers could put a knife at your throat…I’m sure you will give them all your money. Then there’s carelessness….wallet left behind in an auto ….wallet fell down when you ran to catch the bus….the list is long. Now how about this…Simply swipe your debit card when you go out shopping. Those new clothes….the new smart phone….that nice leather bag…just swipe your debit card. Your money is protected by a PIN Number. Your money is safe, as long as you are the only person who knows the PIN.
Then there’s the mobile wallet. This is nothing but a mobile based virtual wallet. You preload a certain amount of money into your account, created by the mobile wallet service provider. You can pay for anything, right from utility bills like electricity and water bills, online purchases, the purchases you make at the grocery stores and even paying the taxi or the auto. All you need is an internet enabled smart phone. You can pay through an app, text message, social media or even a website. Your wallet can be snatched, stolen or misplaced. Your mobile wallet….No chance.
You get reward points on using the credit card, to make an online or an offline purchase. Banks give you reward points (say 1-5 points), for every INR 100-150 you spend using the card. Banks give you details of the reward points you have earned each month, in your credit card statement. Credit card companies have a tie-up with a number of stores. You shop exclusively in these stores and earn reward points. You want to shop for an expensive smartphone…..simply redeem your reward points. You will find the smartphone costs much less.
Check out loyalty programs: Banks in India offer loyalty programs. You get reward points, when you make a purchase using a debit card. You also get reward points, on internet banking transactions and on using the apps of the bank, to pay your bills. You earn reward points even when you repay the home loan, car loan, personal loan or an education loan, within the monthly due date.
Now to the big question….How to save using your credit card or a mobile wallet? Credit cards are feared by citizens in our country. Citizens view them as a path to a MONEY TRAP. As long as you repay the outstanding balance (amount you have borrowed on the card), within the billing cycle….you don’t even have to pay interest on the borrowed amount. This is an interest free loan.
You have employed a maid, who is real good at her work. You pay your maid a salary of INR 10,000 a month. Now for something interesting …. How can you make money on your maid’s salary…. That’s a mad question. Is this a plot to drive your maid away?
No…just a simple trick called deferred payments. You pay the maid at the end of the month. This money is still yours, till it is paid. Why not invest this money in a liquid fund, till the end of the month? You get some returns on your investment. Find paying credit card dues on time difficult….use this money. You still have 30 days to collect money from somewhere and pay your maid. You can also lend this money and earn some interest on it, till your maid’s salary is due.
Time for a great saying by Abraham Lincoln. “I am a slow walker, but I never walk back.” Yes, our country is slowly moving towards becoming cashless. You need to move too…else you get left behind.
Mr C.S.Sudheer is a management graduate. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.
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