By the word cashless transaction, its meaning can be understood. It means monetary transaction without the use of cash. This type of transaction is made between buyer and seller without the exchange of money. It is possible by transfer of money directly into the bank accounts. It is a part of e-commerce which started in India a decade ago.
Following are the mediums of cashless transactions :
(i) Payment through cheque or draft: The simplest way for making cashless payment is payment through cheque or bank draft. In this system, buyer keeps the cheque book with himself and can make payment to anyone and anywhere through valid cheques. Similarly, for larger transactions, drafts may be used. This can be drawn in the favour of seller by any bank of choice.
(ii) Payment through internet banking : It is the second main method of making cashless payments. Customer may purchase services from many companies online, through internet banking. In this way, without making cash payment, we may purchase goods and services. Payment of rail tickets, air tickets, film tickets, etc. can be done with the help of internet banking. Purchase order on any goods and services can be made through online shopping.
(iii) Payment by swipe machine : Many commercial banks provide swipe machines to the reputed firms on their current account. Through this machine, shopkeeper receives payments from his customers against sale of goods and services. Payment made through swipe machine is directly deposited into the firm’s account. To avail this service, a customer can use credit card or debit card.
(iv) Payment through ATM machine: Through ATM card, a buyer may transfer money in the account of seller without the use of cash. For this facility, it is essential that account of buyer and seller must be in the same bank. It is also essential to know the IFSC code of bank.
(v) Payment by mobile app: Use of mobile has increased largely these days. In a smart phone through different apps, cashless transactions can be made conveniently. For cashless transactions, many banks have issued E-wallet app. Similarly, many domestic and foreign companies have come up with this type of app in android phones. We can make payments while sitting back at home through E-wallet. Recently, the government of India has issued this type of app by the name of BHIM (Bharat Interface for Money). Honourable Prime Minister has issued this type of app for increasing the confidence of public in digital transactions.
(vi) Payments by USSD technique (Unstructured Supplementary Service Data): Through this technique, we may use an ordinary mobile to take advantage of digital payments. To take benefit of this service, one has to dial *9# from the mobile. He has to enter the first digits letters of his bank or first four letters of IFSC code.
(vii) Payment by Micro ATM : Similarly, by AADHAR enabled payment system (AEPs) through use of Aadhar card, we make payment through Aadhar card on POS (Micro ATM) machines by scanning our finger prints. For this, it is essential that our bank account is linked with our Aadhar number.
