Paperless transactions through the internet, ATM, cards and mobile devices have surpassed paper-based ones in the year lead to March 15, reiterating the fact that Indians are moving towards virtual payment.
With the younger generation taking a liking to online or hi-tech methods of fund transfer, rather than filling up reams of paper, the bank cheque may also soon go out of fashion.
While paper-based transactions cleared through cheques amounted to Rs 85 lakh crore in FY15, paperless transactions, including retail electronic transactions such as ECS (electronic clearing system) debits and credits, electronic fund transfer, card transactions, mobile transactions and prepaid instruments were to the tune of Rs 92 lakh crore in the same period, according to RBI data.
These are essentially retail customer transactions. Other interbank and financial market transactions are electronically settled through channels such as RTGS (real time gross settlement), among others. While bill recipients and merchandise vendors are incentivising online transactions by offering cash discounts, banks are discouraging paper-based transactions by restricting supplies of free cheque leaves.
At an estimated cost of Rs 35,000 crore, the National Optical Fibre Network (NOFN) project plans to connect about 2.5 lakh village panchayats with the internet, which will help online bank transactions as rural India begins to gain access to the net.
Now, the mobile wallet user base is small with only about 10 million customers transacting on wallets, which is expected to grow to 100 million in the next five years.
Source – ETRetail.com