Introduction to Plastic Money
Money- One of the most important factors for living life. How did it all start? In history, you might have learnt a batter system where goods were traded for goods, then came an era where gold and silver coins came into being; then we modernized we stared using paper notes and coins for the trading of goods and services. We got more modern, and for several reasons, we started using technology to transfer money for our goods and services. Now you can say that technology here means the use of plastic money; plastic money can be your debit or credit card; technology can also mean wire transfer of funds from one account to another and the use of the internet for your various banking transactions.
Yes, plastic money uses technology for transferring money into another bank account for your goods and services. Have we realized why the government is getting so specific about using technology to transfer money from one account to another? These transfers need not be just within the same bank or the same persons’ bank account; it can be a third party transfer into either the same bank or any other bank, in the same city or to another city, even transfer of money to another county is possible using technology.
Technology has taken over the globe, and it dominates as it is used in almost all types of businesses, companies and industries. No industry on this planet now can survive without technology these days. The reason is extremely clear: with growing modernization and businesses; it is important to simplify everything by maintaining records, using various methods to track business, comparing yourself with your competitors, etc. Everything can be made possible with the use of technology.
Why technology for financial transactions, isn’t its risky?
Every aspect of life has its own pros and corns. Unlike the regular banking going to the branch you hold your account with and waiting in a long queue to withdraw or credit the money or cheque you have received, technology has helped us use ATM (Automated Teller Machines) and debit cards to withdraw or wire transfer to transfer money into someone else’s bank account; similarly, the person who owes you money or who need to give you money can transfer the same into your bank account. Of course, money transfer is mostly for exchanging goods and services; however, there need not be a reason for a transfer.
Because these transactions are mostly transfer of money online, they can be risky as maybe your computer or your internet knocks off. The transaction is not processed successfully, and the money leaves your account. What if the account is hacked and money is all taken out of your account? What if the ATM does not return your debit card? What if there is a fraudulent transaction? And many such questions bother you and do not allow you to use technology when it comes to monetary transactions. To some extent, yes, using technology for a financial transaction is risky, like every coin has two sides, so do these transactions; however, keeping all the negative aspects in mind, the banks and the RBI (The Reserve Bank of India the regulator for all the banks in India. Every bank in India needs to function under the regulations and guidelines set by the regulator.) have set few processes. A few guidelines they need to work under for technical transaction to make sure that the consumer does not suffer.
Fraudulent transaction and transaction due to technology’s failure can be traced and returned to the consumer’s account; all you need to do is call the bank up or email them the issue you have been facing of the transaction that has failed money that has left your account. The recovery of money might take a few weeks to come back into your account; however, it does come back; you do not lose your money to technology.
Latest banking technologies
Technology for banking has simplified banking and reduced the time it consumed to process a transaction by introducing the following and there are various types of plastic money:
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Core banking
Core banking is anywhere banking with the same bank, be it any location. For example, if you have an account with ABCD Bank LTD in the X location or X branch, you can also process your transaction in the Y location or Y branch. All this can be done without sending the cheque outstation for clearing the transaction. This saves on time and money for sending the cheque for clearing to another city.
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Debit cards
A debit card is real, real plastic money; similarly, a credit card is a plastic credit that you receive from a financial institution for various reasons in exchange for the interest that you own the institution for utilizing their money. Debit cards can be used for shopping, paying for fuel, grocery, withdrawing money from the automated teller machine. You do not need to carry hard cash to buy goods and services these days; your debit card will do it for you. There are many advantages of plastic money attached to it.
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Wire transfer
This technology saves you the hassle of going down to your nearest branch, writing down a cheque to a third party, waiting in a long queue to get a simple transaction processed. All you need for this transaction is a computer or a laptop and an internet connection. Within a few minutes, you can transfer money into the beneficiary’s account. All you need to do is set up a beneficiary account for this transfer.
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Pay bills online
This technology is set up just to pay bills online; the reason behind setting up this technology is minimizing the use of paper and going green by simply transferring money online to the beneficiary, be it your electricity bill, gas bill, phone bill, DTH recharges, etc., most of your bill payments can be made online through internet and wire transfers. Why do you even need to see the face of the bank?
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View and manage your money online
You have a facility of e-statements and viewing your bank account online. Using this facility, you can keep track of your account, estimate the money you consume monthly, analyze your budget, and plan your savings online by seeing various investment options available for you online. You can also manage your investment accounts with the same bank using the same passwords given to you by the banks.
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Mobile banking
Services at your fingertips or banking at your fingertips is the best explanation for mobile banking. You can activate SMS alerts for any activity processed on your bank account. Now to process transactions through your mobile phone or your smartphone and make the most out of it, all you need to do is download your bank’s application as per its guideline and process transactions, pay your bills, etc., through your mobile phone.
There is a lot more than you can do using technology for your banking or your financial transactions, for example; set up fixed deposits online, invest money in the investment you like online, order chq books online, order demand drafts online, transfer through NEFT’s or RTGS’s using your account online. A much more, most of the banks provide you with almost all the services these days. All you need to do is either go down to your bank personally and meet up with an advisor to get the plastic money information, or you need not waste time walking into the branch and directly go to the website of your respective bank and see the services they provide and how to activate these services.
Why are we emphasizing on using technology for financial transactions?
Emphasis on using technology has several reasons. Lets quickly have a look at these reasons.
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The cost of printing currencies
The studies say that RBI spends close to 2500 cores on simply printing approximately 17.00 billion currencies of various denominations; this number is only set to rise, which means if the printing of currencies rises, the printing cost will definitely rise. Printing one single Rs 1000 note cost the government nearly 3.50 per note. This is a lot of money. The government is spending a lot of money in only printing currency for the people of India.
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The cost of disposing currency
The banknotes you use as your currency are composed of cotton, cotton rags, and paper. This material is fragile to be used, and besides, you never know how many people the currency travel to and how they handle the same. Someday the currency will tear and lose its worth. These currencies need to be disposed of. RBI not only bares the cost of printing currencies but it also bears the cost of disposing them. The disposing cost is approximately 210000 daily. This means the regulator prints the currency and disposes of currency daily, and spends money on both activities.
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Go green
By using technology and plastic money, we can save a lot of trees. Printing of currencies, account statements, and other transaction reports will reduce the cutting of trees, saving trees and saving us from the weather disasters the globe has been facing due to commercialization and destroying nature. A little effort put in by you can really matter in protecting and saving us from further destruction.
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Anytime anywhere banking at minimum cost and effort.
Online banking does not restrict you to banking hours and location. It gives you a leeway of banking from any location at any hour of the day without any fuss or extra cost or charges. You do not need to spend time and money to travel to the branch and back; you do not need to wait in long queues do get transactions processed, you do not need to get hold of an advisor to book your investments and your fixed deposits, in all you do not depend on a branch or a bank employee to bank or process your banking and investment-related transaction. You can do it all by yourself and at your ease.
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Keep track of your account and pay your bills on time.
It would help if you did not go to the bank or your service provider to pay your bills; you can make sure you pay them at home at your convenience on the time suitable to you. You no longer need to get into a long queue to get your passbook updated or wait for the entire month to receive a printed bank account statement; all you need to do is go online and update SMS alerts to keep track on the transactions and the balance of your bank account. Banks use technology that sends you alerts on each transaction that takes place on your account. Receiving updates and having access to your bank account, you can keep track of your account; this will make you feel secure about your money and help you keep track of the transactions, be it incoming transactions or outgoing transactions.
Conclusion
Change is the only constant thing in life; accepting these changes and changing with time is smartness. Technology is the smartest way of banking in today’s time. You save on a lot of time, money and efforts that you spent on by going to the branch.
Banking online and plastic money both are safe these days; yes, there are a few unforeseen events in line with online transactions like hacking of bank accounts, fraudulent transactions, miss placing of debit cards and many more; however, this has been taken care of by the regulators to make sure that such events minimize and cause no harm to the consumer so that you continue to use technology for your banking and other financial transactions.
Technology gives you almost all your banking options at your fingertips; these banking options differ from bank to bank and the facilities available on their websites. Besides making money and the bank available at your fingertips, it cuts down on the regulator’s cost in printing and disposing of currency. You can help yourself, the government and the surrounding by accepting this change and giving online banking a try.
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