A Digital Transaction Solution
Introduction
Technology makes our lives and conducting business much easier and faster every day. Have you ever considered the evolution of financial transactions in a world influenced by digital innovation? Where convenience reigns supreme, you can see a future where cash transactions will no longer dominate. All financial transactions will be done digitally. However, some such transaction systems are already in place and are increasingly becoming multi-dimensional.
Concept of cashless transactions.
A cashless transaction is a digital system of financial transactions
in which funds are transacted, transferred, or conducted over the Internet
without the physical transfer of money in the form of banknotes or coins. Here,
the transaction process is being organized by using modern information technology-based
payment systems, special devices, systems, software, and apps, and various types
of financial transactions are being made easier and safer. Technology is
rapidly changing how we spend and manage our money, so all aspects of money
management are changing rapidly.
A Digitally cashless transaction system is a commercial innovation that has brought about a huge change in financial management and breakthrough smart solution, reducing distance, time, and cost, with adequate security provision in money transfer, payment, or transaction. There has been extensive discipline in the Business, Management, Skill, and Finance Councils. Momentum has been transmitted to micro and macroeconomics, which has benefited the global financial system and the global economy.
Cashless transaction process
Initiation: The cashless transaction process begins when a payer initiates a transaction, places an order, or uses the system to electronically transfer money for a product or service. Here the importance of the internet and information technology is greater than the efficiency of the transaction worker or the capacity of the machine.
Selection of payment mechanism: It depends on the availability and usability of alternative transaction solutions. A money trader opts for cashless transaction mode considering some concerns like time value, money security, and distance inconvenience. A simple solution among many other options is mobile wallets.
Merchant Point-of-Sale (POS): Where the transaction involves a purchase, the customer can complete the transaction by connecting to the merchant's Point-of-Sale (POS) system to pay the bill for the goods or services purchased. The online transaction process using any financial smart card through a POS machine is now a secure payment system that takes place over an internet connection.
Payment Authentication: Authenticating the identity of the payer and ensuring authorization to complete the transaction is seamlessly verified using various IT systems, such as personal identification numbers (PINs), secret passwords, biometrics, or two-dimensional ID authentication information. In this process, a certified digital payment gateway system and internal data communication coordinate the entire process and complete the transaction as per the correct instructions of the payer.
Transaction Approval: After transaction authentication, the payment instruction is sent to the bank's payment processor for approval. Through this process, the presence of funds or credit in the payer's account is verified and the payment is approved. All financial institutes are mandatorily maintaining exclusive data centers to preserve all account information and transaction records.
Payment processor connectivity: In the credit/debit card transaction process, the payment processor facilitates communication between the merchant the payer's bank, and the card-issuing bank. The processor then ensures that the transaction is executed as per the correct instructions of the payer. There is a different IT division for all banks & financial institutes to manage the smooth transaction process.
Amount Transfer: After the order is approved, the amount is first transferred from the payer's account to the merchant's account. As, the process may involve many intermediaries, such as banks, payment processors, and card issuing authorities.
Transaction Record: In this transaction process an account management system stores the digital record of transaction details including transaction amount, date and consent of participating parties, OTP, SMS, TID, and recipient data, and issues a receipt. thereby allowing both payers and receivers to keep records of their account transactions.
Clearance: Final settlement involves instant transfer of funds between the payer and merchant account, so smooth settlement of any transaction can be completed in real-time or within specified time frames. If so, it depends on the transaction policies and practices of the financial institutions associated with it.
Transaction Close: Payment will be confirmed only after the transaction is completed and the payer is authorized to receive the goods or services purchased, as per the payment record.
Transaction Close: The transaction is deemed complete when the payer gets access to the purchased products or services and then the merchant receives payment.
Various Cashless Transaction Methods
Financial Smart Card:
Debit and credit cards, cash cards, post-paid cards, loyalty cards,
gift cards, etc. are chip-installed physical smart cards issued by banks that
are widely used in modern money transactions. A debit card takes cash directly
from the user's bank account, whereas a credit card allows payment of purchases
on credit and requires payment in arrears by a later due date. Currently, these
smart card-based cashless payment transactions are a well-known and widely
accepted method of completing cashless purchases at various locations.
Contactless Payment:
Contactless payment smart cards use RFID or NFC technology to allow customers to make financial transactions by touching their card or cell phone to compatible terminals. This cashless payment method greatly reduces transaction time and physical touch, making it a popular choice in retail contexts. Contactless payments speed up and simplify regular transactions.
NFC Card Payment:
NFC payments allow two NFC-enabled devices to interact, often used
for contactless card payments and smartphone transactions. This cashless
payment transaction system is widely used in the field of contactless payment
systems due to close distance, to safe and fast transactions.
Prepaid Card:
Prepaid cards, which are real or virtual, preload a certain amount
of money on the smart card for spending. With cashless payment systems, cards
can be reloaded as needed, making them ideal and convenient for on-demand budget-driven, and specific-purpose spending. Prepaid cards are used for gift
cards, travel cards, and other situations where limited spending is required,
especially in small-scale foreign currency transactions or to pay for
purchases.
Smart Phone Wallet:
Mobile wallets, exemplified by programs such as Apple Pay and
Google Pay, have revolutionized smartphone payments. Users link their bank
accounts or cards to these apps, allowing frictionless transactions, often
supported by Near Field Communication (NFC) technology. Thus, a mobile wallet
eliminates the need for physical cards and provides quick and secure payments
on the go.
Online Banking:
Online banking transforms financial management by enabling
customers to access their bank accounts through online platforms. These
cashless payment transactions allow for financial transfers, bill payments, and
overall account administration. The flexibility and accessibility of online
banking contribute to its appeal, as it gives customers direct control over
their funds.
Internet Payment System:
Transactions through Internet payment systems are now very easy and
popular payment gateways, such as PayPal, Google, Venmo, and Skrill, enable
online transactions and peer-to-peer fund transfers. Users link their bank
accounts or credit cards to these sites, facilitating digital transactions.
This system is a safe and efficient way for Internet payment system users to
make payments or transactions. Which is greatly helping to connect cashless
financial transactions across the globe.
QR Code Payment:
To initiate a transaction, customers scan a quick response code using their cell phones. This method, favored for its simplicity, smoothly supports peer-to-peer and commercial transactions. QR code payments have gained popularity in various businesses as they facilitate accurate information-based payment processes through quick scanning. It is by far the most popular cashless transaction method.
Conclusion
Now is the right time to dispose of paper money and
change to a better approach to pay without cash. All things considered; it
appears as though a credit-only economy is far off. Yet, a major Fin-Tech
improvement could abbreviate this time a great deal. With the assistance of new
advances and consistent upgrades to the ones we now have, credit-only installments could turn out to be quicker, more straightforward, and more
secure than at any time in recent memory. Regardless, the truth will come out
eventually when we will actually never again need cash.
.jpeg)
No comments:
Post a Comment