India’s economic progress is largely dependent on villages and towns due to the agriculture sector. It is important not only to consider them but also empower them with digital payments and cashless banking. Rural areas in India with the convenience of mobile money can help bring better business and transparency.
Advantages of digital payment in rural areas of India
Rural economy heavily relies on cash transactions. One of the biggest reasons for that is the absence of banks in their villages. They have either travel to the next town or nearest cities for bank transactions. Digital payments with the help of Fintech companies or mobile banking eliminates the need to go to a bank and banking can be done anytime anywhere.
Banking at door step
With the help of banking services provided by Fintech companies, it is possible to set up bank accounts without having to actually visit a bank branch which may be located in remote rural areas. It is also possible to withdraw cash, transfer money and pay utility bills. Digital payment has never been so easy.
Rural Business Boom
Being hassle free, it is easy to use and once the rural population begins to get comfortable with this cashless transactions and digital banking, more merchants or shop owners can become associates. Better reach and more convenience would automatically give a boost to all kinds of rural businesses. Once that happens, there would be a more secure flow of funds.
Better access to Economical Facilities
Many people in rural areas have to struggle to get their pension and wages paid or to avail benefits of schemes they are eligible for. With digital banking, it is easy to approach things and get paid sooner.
It is not feasible for people in rural areas to make long trips to make investments or pay utility bills or withdraw money from ATMs to pay wages to their staff. However, having a mini or micro ATM in rural areas would be a boon and the entire sector could witness exponential growth. Whether it is to make online bill payments or to lend and borrow money, if it is all possible with digital banking.
Being a trusted solution that is known for its strict quality standards, the identity proof is aadhar card enabled or through fingerprint which make using this system extremely convenient.
Fintechs are Playing an Important Role in Digital Payment Space
Fintech firms such as Fastpay Payments in association with the Government are trying their level best to empower rural businesses digitally and financially post demonetization. Novel solutions that specially cater to the needs of the rural business community are being implemented. Aadhaar Enabled Payment System (AePS) and mATM at retail points to help users carry out transactions, thereby eliminating the requirement to visit the physical branches of a bank.
There is also the provision to make offline-to-online transactions, which is particularly useful for rural businesses that lack direct digital access.
Understanding Micro ATM and how it works in rural India
Ever since demonetization happened, Micro ATMs have been the buzz word. Micro ATM looks like a card swiping machine but is able to offer banking without the bank to the last mile. Banks can remotely connect to their core banking system through this machine. Micro ATMs work like handheld point of sale (PoS) terminals which can be specifically used to disburse cash in remote locations or rural areas of the country. This is a doorstep mobile banking arrangement cum-mobile ATM device.
The micro ATM machine comes with a fingerprint scanner attached to it and has the ability to scan Aadhaar details. This helps banks and payment solution companies to connect with the large unbanked sector effectively.
These machines are typically used by business correspondents (agents who represent banks in rural areas) of banks to connect customers who are far away from branches. The agent (a businessman or a shopkeeper) acts as the cash disperser for the ATM. He collects deposits and feeds in data and also pays out from his pocket and debits the account. There are no service charges for using Micro ATMs.
Micro ATMs are expected to be viable where ATMs are not. ATMs need at least 80-100 transactions a day to be viable as they cost several lakh and have monthly operating expenses such as account rental, telecom charges, AMC costs, electricity expenses and security guard. A micro ATM costs less than Rs 20,000. Since connectivity is through GSM, the agent can carry it and travel village to village at set times.
How does a Micro ATM work?
Bank will assign a correspondent who will sign up customers in remote areas after verifying their identity (fingerprint can be used as an authentication tool for rural people ). The fingerprint and personal details may also be linked to the Aadhaar Card, which will then serve as the ID proof required to withdraw money.
Advantages of Micro ATM
According to bankers, the cost of deployment of a micro ATM is lesser than that of an ordinary ATM. ATMs need at least 80-100 transactions a day to be viable as they costs several lakhs. A micro ATM costs less than Rs 20,000. ( cite copy, and link)
It is portable
Micro ATM has connectivity through GSM, hence it can travel from village to village, said Das during a press interaction on Monday.
Biometric enabled secured transactions
Interoperable device and can work for any bank
Micro ATM can be used for the following banking utilities
ATM card transaction
Aadhaar enabled payments (AEPS)
Funds transfer, mini statement, balance enquiry, etc.
Some of the non-banking utilities include:
Internet and DTH recharge
Prepaid and Postpaid SIM card recharge
Ticket booking (IRCTC Railways/Airlines/Bus)
Hotel booking & much more
Fastpay Payments’s Micro ATMs services are designed as a solution to narrow the banking gap especially for the rural Indians. We are empowering local retailers, shopkeepers and retired banking staff with these devices by enabling financial transactions.
Going cashless is the need of the hour. With India relying more and more on cashless payments, thanks to secured banking, we are contributing a bit to make the process easier. 50% of India’s population already has access to the internet with most users accessing the internet through their smartphone. Over the years, smartphones have gotten smarter and are equipped with high-end technologies like powerful processors, substantial memory, high-resolution cameras, barcode scanning, GPS geocoding, social media platforms, etc. With all these technologies in place, every smartphone has smart payment capacity.
Smartphones and its related technologies have revolutionized digital payments. Coupled with security technologies such as tokenization of card details for reducing fraud, biometric-enabled multi-factor authentication, EMV standards for user authentication, NFC-capable readers at merchant stores, hardware-based secure element approaches, etc., new users are turning towards digital payments.
Advantages of Cashless Payments
Ease of payment
You can carry lakhs of rupees in pin enabled Debit or Credit card. You will never have to fear getting robbed while making huge huge payments. The ease of financial transactions is probably the biggest motivator to go digital. Nowadays many transactions are possible without plastic cards which makes it even more safer and easier while travelling.
If you are in a remote location or a rural area, thanks to aadhar enabled Micro ATMs, even withdrawing cash is easy and hassle free. One can pay utility bills and conduct banking using Micro Atm services.
The recent waiver of service tax on card transactions up to Rs 2,000 is one of the incentives provided by the government to promote digital transactions. If used rightly, using these discounts at the right place. Similarly, saving on rail tickets, highway toll, or purchase of insurance through digital payment can help cut your costs.
Tracking spends and setting a budget discipline
Tracking your spending is easy digitally and can help while filing income tax returns and, in case of a scrutiny, people will find it easy to explain their spending. People know exactly when to stop spending and saving or can easily plan their budgets. Controlled spending could also result in higher investing.
If your debit or credit card is stolen or if your mobile wallet password is compromised, it can be blocked remotely through SMS or call. However getting your money back is not possible with digital payments.
With Fastpay Payments, you can now go digital whether you are in a city, remote area or villages. With a range of cashless options, banking is now hassle-free and convenient. We have made cashless payments easy for all.