View of NECESSITY AND USAGE OF E-PAYMENT SYSTEM IN TODAY’S AGE

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ACCENT JOURNAL OF ECONOMICS ECOLOGY & ENGINEERING Peer Reviewed and Refereed Journal (International Journal) ISSN-2456-1037

Vol.04,Special Issue 05, (ICIR-2019) September 2019, Available Online: www.ajeee.co.in/index.php/AJEEE

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NECESSITY AND USAGE OF E-PAYMENT SYSTEM IN TODAY’S AGE

1Meenal Agrawal

Research Scholar, D. A. V. V., Indore

2Dr. Pallavi Pattan

Assistant Professor, DAVV – Mateshwari Sugani Devi Girls College, Indore

Abstract - Nowadays, the cutting edge of any business or profession is E-commerce. E- commerce is the purchasing and selling of various types of goods and services, or transferring of funds or various kinds of data through an electronic medium mainly the Internet. The appearance of e-commerce has developed new financial needs that in many number of cases this financial needs cannot be effectively and efficiently fulfilled by the traditional payment systems. So, recognising this, all the interested parties are exploring various types of electronic payment systems. The present paper helps many users who want to use e-payment systems, researchers who want to do further research under this field.

Keywords – Electronic Payment System, Traditional Payment system.

1. EVOLUTION OF PAYMENT SYSTEM

The Payment System of a country provides the channels essential for conducting trade, commerce and other economic activities smoothly and efficiently. An efficient payment system not only functions as a lubricant to speed up the flow of liquidity in the economy, but also stimulates economic growth of the country. The process of payment is an important aspect of financial negotiation. The payment process entitles the creation and transfer of liquidity among different financial agents. A smooth, well-functioning payment system not only ensures efficient utilization of scarce resources but also eliminates systemic risk” (RBI, 1998).

In other words, the evolution of payment systems will never stop. The payment systems refers to the public facilities that support all the economic activities of the society and the monetary market will requires extra sophisticated payment systems with better security and effectiveness. The payment system started with the barter system centuries ago. In the barter system the various types of goods were interchanged directly and frankly between peoples. The main drawback of barter system was that the buyer and the seller had to mutually like the goods that they had in surplus. So, to overcome this drawback of payment system, another payment method was emerged to the next generation i.e. called Commodity Money System.

In this method, the buyer would buy goods from the seller in exchange of some commodity in the form of gold, silver, corn etc. The commodity money slowly evolved into standard of having paper notes at the exchange parameter. After this another method of payment system was generated i.e. called cash payment method. The seller does not like the commodity that the individuals are existing to collect in interchange in place of goods in the cash payment method. About 80 percent of all the transactions in the world are done through cash payment. The process is simple and there is no bank involvement. There is however an overhead of printing notes. The cash payment method is very insecure. There is no record of the transaction maintained. There is a possibility for generating counterfeit notes.

Cash Payment is mostly used for low-value payments. Check Payment is employed for making medium to high value payment. A record of the transaction is maintained at the bank at the cost of the transaction fee. On the other hand, cash payment method is not a assured form of payments as the cheques don’t signified the immediate cash. As there is a probability that the cheques could be turned down through the bank of the buyers due to different reasons. If the degree of processing of cheques started increasing, then the banks thinked about methods of improving the turnaround time for the processing of payment.

E-commerce is a recent methodology of business that addresses the necessities of various organisations, the persons involved on wholesale trade and the consumers to cut the different types of costs whereas improving the quality of different kinds of goods and services and rising the pace of service delivery. The term E-commerce also applies to the use of computer networks to search and retrieve information in support of human and corporate decision making. In other words, E-commerce technology is changing in a big way. So, the technological advancement of E-commerce has provided efficient and effective

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payment system devoid of ‘cash and carry syndrome’ i.e. Electronic Payment system.

Specifically, electronic payment system provides a channel through which economic exchanges take place without visiting anywhere and with no physical presence of the transacting parties.

2. THE NEED OF NEW PAYMENT SYSTEM DESIGNED FOR E-COMMERCE USERS The traditional payment system is not the ideal method of payment, specifically for the transactions which are of higher value as the uses of currency involves the management, storage and safety costs that may not happened with other types of methods to the similar level. Obviously, a few replacement will occurred, but the temperament and level of this replacement will be depend upon no. of determinants. Individuals will be apt to choose to use that payment methods which are cheaper, convenient to them, saves their time and less risky than existing possibilities.

Many persons will choose that methods which can be used by them for numerous purposes, relatively have to use a variety of methods to meet the various necessities. The extent of getting specific payments by retailers, persons who are involved in foreign trade and other suppliers will have a significant influence on the approaches which are taken by them. So, the new payment system known as electronic payment system are designed for e- commerce users in Indore Division as the traditional payment system are clumsy and expensive way to handle coins and notes which is effectively being replaced by electronic payments which can be started by various types of plastic cards.

This is a tempting prospect of the 21^stcentury as both the expenses and prices of traditional payment methods are superior than their electronic analogues. The system of money is abstract, impersonal and symbolic. But the concept of electronic money is fundamental as compare to cheques and cash and the channel of payment is not physical now. There are so many extra benefits are there in electronic money that cannot delivered through cash. Generally retailers are paying attention to electronic payments because it offers various types enhancement of services and it reduces the costs of cash handling and holding.

For instance, any debit cardholder shows the card at the point of sale (PoS) to pay for the different kinds of goods and services, for various types of goods and services consumed and for the receivable of cash, through which the payment made through the debit card, which instantly deducted from the account of card holder. The method through which a person convincing the customers that the usage of plastic card payments are more flexible, convenient, simple and are more secure than the usage of carrying cash or cheques.

3. DEMONETISATION – IMPACT ON E-PAYMENT SYSTEM

Demonetization is the step of clearing the unit of currency which was considered as black money. Demonetization is the necessity when the nation wants a change in currency. The old unit of currency must be retired and replaced with a new currency unit. The government of India moved and determined on November 8, 2016 to demonetize the two notes of currency with largest denomination i.e. 500 rupee note and 1000 rupee note which were in mix information that that notes were contributed 86% in the total cash of chain of supply of the country.

As announced by Honourable Prime Minister Shri Narendra Modi on November 8, 2016 in a non-scheduled live televised address that the notes with denomination of Rupees 500 and 1000 having Mahatma Gandhi series would be treated as ceased after the midnight of November 8, 2016 and stated as well that the new currency notes of Rupees 500 and 2000 denomination with the new Mahatma Gandhi series will be issued as an exchange of old banknotes as legal tender. However, the government also clarified that the notes with denomination of Rupees 100, 50, 20, 10 and 5 having Mahatma Gandhi series as well as notes of Rupees 2 and that will remain legal and not influenced by the policy announced.

If there is one thing that has been growing at a good pace after demonetization, it is online payments, i.e. there is a great impact of demonetization on e-payment system rather than being tied up in the cash crunch and standing in the never ending ATM queues, more people switched to online payments. There has been a rise in the number of debit and credit card transactions. Even smaller vendors have introduced cashless payment methods. In

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other words, the demonetisation drive by Prime Minister Narendra Modi on November 8 last year has crowned digital cash as the king of all payment instruments in India.

The government of India wishes for India that India have to go for cashless, but it is not an easy task as large no. of peoples are illiterate. Cashless transactions have their downsides for consumers. But the users who are accessing to cashless payments but sometimes they are rejecting the cashless alternatives or not in a position to hold the technology is not the answer to the question, especially when there is a get up of crunch of cash through the move of the demonetization which was taken by Indian government. The lots of questions relating to access of e-payments are kept aside; a cashless world has its benefits. Embracing cashless options and being an informed consumer who is aware of the available systems and their designs increases the chances of a convenient and consumer- friendly experience.

4. BENEFITS OF E-PAYMENT SYSTEM OF E-COMMERCE USERS

An e-payment system entitled various types of business to receive and deliver many bills consent for bills receivable and for bills payable departments. Even though most account payables departments have the capability to process various e-payments, the reports of industry suggested two-thirds of statements arrived on paper from the various sellers and vendors.

Electronic payments is the transformation of traditional payments where customers or users done their various monetary transactions electronically. E-payments has helped the consumers or users to save their time and other resources. Users can operate various electronic payment services with the help of internet at any place and at any time.

In other words, in the era of technology cash attempts to continue the competition with electronic payment as many peoples prefer to do payments through electronic mode.

So, researcher can describe the benefits of electronic payment system with reference to e- commerce users–

 E-payment system saves the time of e-commerce users.

 E-commerce users operates the e-payment system on 24 hours × 07 days basis

 E-payment system helps e-commerce users to avoid hassle of standing in a long queue for payments.

 E-payment system can help the e-commerce users to access this e-payment system from many locations.

 E-payment system is user friendly for e-commerce users.

 E-payment system becomes cost effective for the e-commerce users.

 E-payment system reduces manual work for the e-commerce users.

 E-payment system increases chances to get cash back offers, extra discounts, etc for the e-commerce users.

 E-payment system provides traceable and retrievable records of transactions.

 E-commerce users knows the additional costs of transactions (if any) in using the e- payment system.

 E-payment system can help the e-commerce users in dealing with paperless or cashless transactions.

5. CONCLUSION

It was found that those customers are highly satisfied with e-payment system due to several reasons. The useful values of e-payment system linked with mobility and control over the monetary transactions thus found to have a great effect on its uses. Practically, e-payment system is found to be useful to the users as it can be accessible from many locations, removes the burden of carrying cash and preventing from standing in a long queue for payments. It is well integrated into the routine activities of the consumers thus providing benefits of getting all the cash back offers, extra discounts and reduces manual work.

It is widely accepted for various purposes like online shopping, bill/tax payments, etc., in comparison to any other existing technologies. In other words, e-payment system found to be useful as it operates on 24×07 hours basis; saves time of the users and provides traceable and retrievable records of transactions. The security in e-payment is quite enhanced and the banks have taken a number of security measures to provide secure these services to their customers.

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The One-time Password or OTP has been developed by the banks and it is quite effective to provide secure e-payment transactions. OTP is generated by the banks while the user is initiating any e-payment transaction and it is developed for one time use only. It expires after one use. On the other hand, the traditional payment system is more time consuming and in this competitive era there is no room for the traditional type of payment system.

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