Going cashless comes at a cost: Know the charges for making digital payments

Going cashless comes at a cost: Know the charges for making digital payments

Digital mode of payments has changed the financial transaction landscape in India. The implementation of demonetisation in 2016 prompted a massive surge in digital transactions. Long queues to make utility bill payments is a thing of a past now with digital payments taking over for both small and big transactions. What really makes digital payment popular is the convenience and availability associated with it. However, not many are aware that this convenience comes at a cost.


Let us take a look at various fees and charges levied while using digital payments.

Credit and debit cards

Credit and debit cards are the most common means of making digital or electronic transactions. They are widely used for utility bill payment, ticket booking or online shopping. For debit card, banks charge an annual issuance fee though there are a few debit cards which are free.

If you are using a credit card, do ensure you are using it cautiously. Using any credit card without knowing its terms and conditions may create a situation in which you end up paying more unnecessarily. Issuing banks do charge you in the form of annual fee, convenience fee, renewal fee etc. Also, if a customer misses the due date and fails to make the payments on time, the issuing bank will levy heavy interest you for that.


Use of e-wallets is quite popular among the younger and tech savvy generation in India. This is a handy facility and can be used anytime anywhere provided you carry a smart phone with you. Though bill payment, phone recharge, DTH recharge etc. can conveniently be done free of cost; you need to bear extra charges while transferring money from a digital wallet to a bank account.


National Electronic Funds Transfer or NEFT is a mode of transferring money by using internet banking or visiting a branch (some banks do offer this facility at their branch). This one-to-one money transfer facility comes with charges that may vary depending upon the bank or the amount you wish to transfer.


UPI is a National Payments Corporation of India (NPCI) launched facility for making instant payments. Banks have their own unified payment interface (UPI) whereby customers can send or receive money with more ease. Though payments made by using UPI comes for free; if you make a payment from UPI to another bank account using NEFT or IMPS you might be charged for that.

Payment banks

Payment banks have also gained popularity after the current government pushed towards cashless transaction. Though there are limitations on the services provided; payment banks like Paytm, Airtel are increasingly being used by netizens. These banks operate as per the guidelines set by the Reserve Bank of India.

Payment banks do not charge money for opening account or depositing cash; however, withdrawal of money or money transfer to other banks are chargeable.

Digital payments are convenient and safe to use for anyone having basic minimum skills. However, it is a must to keep a track on how much you are spending each week or month. This helps you in your existing and future financial planning.




Source:- moneycontrol


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