Digital money is currency in the digital form. Digital money can be transferred using electronic payment systems like NEFT, ECS and credit/debit card payments. Digital money enables faster, secure payments across bank accounts.
Digital money reduces cash payments and the associated risks. The transactions are completely online and can be carried out really fast. Digital currencies have changed the way money is transacted and payments settled.
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Debit Card: A debit card is a payment card used to make cashless payments and withdraw cash from ATMs. Debit cards are easy to use and convenient to make payments. A debit card is linked to your bank savings account. The balance in the savings bank account is the limit of debit card usage. The card can be swiped at retail outlets or can be used in online transactions. There are daily limits on debit card usage.
Credit Card: A credit card is a thin plastic card issued by a bank, which allows the cardholder to pay for the goods and services availed and make repayments at a later time. A credit card is a useful tool, as it helps the user pay for things he really needs as well as build a credit score. You can withdraw cash from ATMs using credit cards. You would be charged high interest and fees for the facility.
The money must be repaid within the billing cycle and grace period, else interest is charged on the outstanding balance. Credit cards are also used to make online payments as well as retail payments. Many credit cards offer attractive rewards, gift coupons and cashbacks. However, a credit card must be used responsibly and the bills must be paid on time to avoid excessive debt.
NEFT (National Electronic Funds Transfer): NEFT is an electronic mode of payment which can be used to settle one-to-one money transfers. NEFT helps users settle payments of higher denomination and minimizes the use of cash or cheque payments. NEFT is a fast and affordable way of transferring funds. The transactions taking place through NEFT are cleared on a half-hourly basis known as ‘netting’.
However, NEFT can only be availed during the bank working hours i.e. 8 AM to 7 PM and can be accessed online through net banking or mobile banking apps.
ECS (Electronic Clearing Service): ECS is an online payment facility used to carry out credit/debit card transactions, linked to your bank account. ECS is generally used by customers to facilitate repetitive payments. It is a quick way to settle or transfer money electronically at regular intervals.
You can use the electronic clearing service or ECS to make EMI payments, insurance premium payments, and pay rent and credit card bills. It significantly reduces cash transactions and lowers the chances of theft or loss of money and is a safe method of making payments. However, some banks charge a nominal fee for providing the ECS facility.
Online Payment Wallets: These are also known as digital wallets or e-wallets and allow users make electronic payments. This form of payment is very convenient and easy to use, as digital wallets can be downloaded on smartphones. The main benefit of these e-wallets is they can be used to settle small payments and make money transfers. The wallets are pre-loaded and are linked with your bank savings account.
Internet Banking and Mobile Banking: Banks have facilitated the use of banking services online. Now, customers can easily avail banking services through online net banking websites and mobile banking apps. Each bank has a separate and dedicated website for net banking.
Online banking services can be used by bank customers for making transactions, applying for a loan, for account related enquiries and availing a lot of other services. Online banking reduces the need to physically visit the bank. It helps customers save time and carry out banking activities conveniently, anywhere, anytime.
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