Updated April 13, 2023
Introduction to Plastic Money
Money- One of the most important factors for living life. How did it all start? In history, you might have learned 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 started using paper notes and coins for selling goods and services. We have become more modern and started using technology to transfer money for our goods and services for several reasons. 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 the wire transfer of funds from one account to another and the use of the internet for your various banking transactions.
Have we realized why the government is getting so specific about using technology to transfer money from one account to another? Plastic money uses technology to transfer money into another bank account for your goods and services. These transfers need not be just within the same bank or the same person’s 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 a transfer of money to another county is possible using technology.
Technology has ruled over the world and is present in practically all enterprises, organizations, and sectors.No industry can survive without technology. The reason is extremely clear: with growing modernization and businesses, it is essential to simplify everything by maintaining records, using various methods to track interaction, comparing yourself with your competitors, etc. Everything can be made possible with the use of technology.
Why is a technology for financial transactions, isn’t it’s risky?
Every aspect of life has its pros and cons. Unlike regular banking going to the branch, you hold your account and wait in a long queue to withdraw or credit the money or cheque you have received; technology has helped us use ATMs (Automated Teller Machines) and debit cards to draw or wire transfer to transfer money into someone else’s bank account; similarly, the person who owes you cash 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 primarily money transfers online, they can be risky as your computer or 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? If the ATM doesn’t 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 regarding 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. They need to work under a few guidelines for technical transactions to ensure that the consumer does not suffer.
Fraudulent transactions and transactions due to technology’s failure can be traced and returned to the consumer’s account; all you need to do is call the bank or email them the issue you have been facing of the transaction that has failed or 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 consumes to process a transaction by introducing the following, and there are various types of plastic money:
1. Core banking
Core banking is anywhere 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 of this is possible without sending the check outside the area to be cleared. It’s saves time and money for sending the cheque for clearing to another city.
2. Debit cards
There are many advantages of plastic money attached to it. A debit card is real, real plastic money; similarly, a credit card is a plastic credit you receive from a financial institution for various reasons in exchange for the interest you owe the institution for utilizing their money. Debit cards can be used to shop, pay for fuel and groceries, and withdraw 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.
3. Wire transfer
This technology saves you the hassle of going to your nearest branch, writing down a cheque to a third party, or waiting in a long queue to process a simple transaction. You only need a computer, laptop, and internet connection for this transaction. You can transfer money into the beneficiary’s account within a few minutes. All you need to do is set up a beneficiary account for this transfer.
4. Pay bills online
This technology mode to pay bills online; the reason behind setting up this technology is to minimize the use of paper and go 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 done online through internet and wire transfers. Why do you even need to see the face of the bank?
5. View and manage your money online.
You have a facility for 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. You can also manage your investment accounts with the same bank using the same passwords given to you by the banks.
6. Mobile banking
Services 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 smartphone and make the most out of it, you need to download your bank’s application as per its guideline and process transactions, pay your bills, etc., through your mobile phone.
There is much more than you can do using technology for your banking or financial transactions. For example, set up fixed deposits online, invest money in the investment you like online, order CHQ books online, order demand drafts, and transfer through NEFTs or RTGs using your account online. Most banks provide you with almost all the services these days. To obtain information about plastic money, you must visit your bank in person and meet with an advisor. Alternatively, you can skip the line at the branch and go directly to your bank’s website to view its services and learn how to use them.
Why are we emphasizing using technology for financial transactions?
Emphasis on using technology has several reasons. Let’s quickly have a look at these reasons.
1. 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 grows, the printing cost will increase. Printing one single Rs 1000 note costs the government nearly 3.50 per note. This is a lot of money. The government is spending a lot of money only printing currency for the people of India.
2. The cost of disposing of currency
The banknotes you use as currency are cotton, cotton rags, and paper. This material is fragile to be used, and besides, you never know how many people the currency travels to and how they handle the same. Someday the money will tear and lose its worth. These currencies need to be disposed of. RBI not only bares the cost of printing currencies but also bears the cost of disposing of them. The disposing price is approximately 210000 daily. This means the regulator prints the currency and disposes of currency daily, and spends money on both activities.
3. Go green
By using technology and plastic money, we can save a lot of trees. Printing 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 matter in protecting and saving us from further destruction.
4. Anytime, anywhere, banking at minimum cost and effort.
Online banking does not restrict you to banking hours and location. It gives you a leeway to bank from any site at any day hour without any fuss, 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 to get transactions processed, and 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 the bank or process your banking and investment-related transaction. It’s possible to do everything by oneself and at one’s own ease.
5. 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 at a time suitable to you. You no longer need to get into a long queue to update your passbook or wait for an entire month to receive a printed bank account statement; all you need to do is go online and update SMS alerts to keep track of the transactions and the balance of your bank account. Banks use technology that sends you signals on each transaction on your account. By 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 they incoming or outgoing.
Conclusion
Change is the only constant thing in life; accepting these changes and changing with time is smartness. Technology is the most innovative way of banking in today’s time. You save a lot of time, money, and effort you spent by going to the branch.
Banking online and Plastic money are both 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 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 trying online banking.
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