Personal Finance

When paisa is passé

Meera Siva | Updated on January 13, 2018 Published on March 05, 2017

The recent crackdown on cash calls for changes in our daily habits

As the dust settles on the aftermath of demonetisation, one thing is certain — all of us need to get more comfortable moving away from cash payments to digital methods. While the young and tech-savvy crowd will have no difficulty in bidding adieu to cash, it is the elderly, or the technophobic, who will find the changeover tough.

Here are three tips you can give to your near ones who would be making their first tentative moves into the world of digital payments.

Fraud proof yourself: If you thought holding on to wads of cash requires a lot of precaution, it only gets tougher digitally. There are many different types of risks — frauds, cyber security risk and misuse — in cards, wallets and online transactions.

For starters, remember to get the card back after a transaction. One way to make it easy to spot a missing card is to not have a big deck of cards but restrict the number of cards you hold to one or two. While it may seem obvious, the need to safeguard your pin cannot be stressed enough. You must also not share your pin, write it down somewhere or enter it in open view of others. It is also best to not let the card leave your sight, to avoid chances of the card being duplicated.

Just as you count the cash given and the change returned, you must double check if you were charged the right amount after every transaction. In many stores, billing is not directly linked to the card machine and there may be errors in entering the amount. Sometimes, due to manual error, you may be charged twice for the same purchase. It is advisable to read the alert messages to ensure that there has been no mistake in the amount charged.

When using prepaid modes, such as for cabs, be sure you are not over-charged. For example, cancellations for surge payments may be missed when the amount is debited automatically.

Keep a tight vigil on your spending while using cards: Typically, use of cash automatically helps limit our splurge — when we run low on hard cash, impulsive purchases are curtailed. Not so with digital methods as the money tap does not shut off.

To avoid spending binges, it helps to set limits on usage. In case of using mobile wallets, you may want to only transfer a small amount from your bank account every day or week. When using a debit card, you may want to keep limited balance in the account and transfer money from time to time from a different account.

It is best to avoid credit cards early on and start with debit cards. With credit cards, start with very small credit limit, until more spending discipline is established. Also, the primary card owner may want to consider setting limits on their secondary cards and upping it after enough confidence develops.

Even when going cashless, you must ensure that there is sufficient money available readily for unexpected contingencies. You can consider periodic savings or making a one-time deposit in a separate account. Unlike cash, there is an extra step needed — ensure that someone else you trust is also aware of this account and can operate it in your absence.

Collect your dues: Earlier, when going out in a group, cash payments helped settle dues quickly. With digital payments, it takes slightly more effort, but the one who paid should not be short-changed by others. If you were quick to pull out your card and pay, do not let lack of cash be an excuse for others.

Keep your bank account details handy to share and get paid. You can also sign up for Aadhar-based payments that link your Aadhar number to your bank account. The UPI apps offered by different banks are easy to set up and enable quick transfer of funds.

You must also be careful about taking cheques from people you do not know well. When selling products or services, for example, cash was the main mode of settling dues. Now, if the buyer pays through cheque, you do not have much recourse if it is dishonoured. Opt for Aadhar-based payments which are instantaneous. Alternatively, the buyer can set up a NEFT payment and you can safely conclude the transaction after the money is transferred.

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