Digital Payments and Cost Aspect in India

Abstract

Payment system is the lifeline of any economy as it promotes trade and transactions in an economy. Now a day, the global payment system experienced various remarkable changes. Technology has been playing very crucial role in the payment system of any economy whether developed or developing. As there are long listed benefits of using digital modes of payments, in India efforts are being made to make our economy a less-cash economy. But this cash-digital divide cannot be eliminated in a short span of time. Promotion of digital payment system has given motivation to various banking and non-banking institutions to design the products and services for customers. But all these convenient and quick products and services are not free of cost. So, it is very important for the services providers to design their products and services in such a manner to be economical and affordable for the customers and viable for them to remain in the competitive market. Customers should analyse various options of digital payments available to them before choosing any of them along with the benefits and costs associated with them. In order to maintain transparency in the system, the service providers (banks and other financial institutions) should inform their customers about the fee and charges. In this paper an effort has been made to analyse the various modes of digital payment and cost associated with banking and other digital financial services.