CH 8

Digital Financial
Tools And
Application
By Ngoiru drema
Introduction Digital Financial Tools and
Application
 In today's world, everything is digitized, which means we can

access or get every service in digital format through mobile
phones, computers, tablets, etc. The invention of computers
and smart phones has created a huge impact on financial
services. Today using computers and mobile phones, a person
can access his/her bank account, verify account details, transfer
funds, deposit cash, renew deposit, pay bills, book tickets, etc.
Also, the invention of ATMs reduced the time taken to withdraw
and deposit money from banks, Digital services help to save
time by providing services in a single touch.
THERE ARE THREE COMPONENTS OF DIGITAL
FINANCIAL SERVICE
1. DIGITAL TRANSACTIONAL PLATFORM: It enables a customer to use a
device to make of receive payments and transfers and to store value
electronically with a bank or any such nonbank institutes which permitted
to store electronic values. The Important thing is that there is no
contribution of cash money in it.
2. RETAIL AGENT: Retail agents use a digital device connected to
communications infrastructure to transmit and Receive transaction details,
it enables customer to convert cash into electronically stored value and to
transform stored value back into cash. There main task is to manage the
promotion and dissemination of digital service to the customer.
3. Devices: The customer's device can be digital like mobile phones that is a
means of transmitting data ang information or an instrument like payment
card machines that connects to a digital device like POS terminal.
Why are savings needed?
 Savings is the percentage of income which is not spent on present expenditures,

instead conserves for future use. Being totally unaware of the future happenings, one
should be ready to face any kin of unpredictable events in such tough situations, our
savings will be very helpful and beneficial.
1. Emergencies- Emergencies may come at anytime and we should always have a
backup to handle such situations,
2. Future Needs- Few future needs are listed below-
 Retirement- Saving for retirement makes you self-dependent and financially secure.
 Own a property.
 Own your own vehicle.
 Education- Cost of education has become a burden these days, especially for higher
studies.
Why is Bank needed?
 Bank is an official financial institution that accepts money from public and lends
money to public.
 Secure Money
 Bank helps to save our money very securely.
 Loading all your cash at home isn't safe.
 You can lose your money in situations like fire, flood or earthquake.
 In order to avoid the scenarios given above, we need a bank.
 Earn interest- Bank will provide several kinds of loans.
Objectives
 Main objective of the Digital Financial Services is to delivering financial services

through technological innovations like mobile phones. Digital finance also has an
important role to p small businesses. It not only provides them with access to
financing but also to electronic p systems, secure financial products and a chance
to build a financial history. It can be a catalyst provision and use of a diverse set of
other financial services including credit, insurance, and financial education.
DIGITAL FINANCIAL TOOLS
 Customer want to know where they are and what's happening with their property.
They want access to information, at any time. The development of Digital financial
tools which on one hand represent value that is of use to us. In this case no need
for the customer to go any bank, Fill the form, stand in Q, apply the form, and
needs to wait for result. Take a look at below topics.
 UNDERSTANDING OTP: OTP stands for One Time Password, also known as One
Time Pin. It is a password that is valid for only one login session or transaction, on
a computer system or other digital device. OTPs avoid a number of shortcomings
that are associated with traditional (static) password-based authentication. With
the increase in cyber security threats, it has become necessary to upgrade The
security standards of your web applications. You need to make sure that your user
accounts are Protected.
 QR (Quick Response) Code:- QR code (abbreviated from Quick Response
Cole) is the trademark for a type of matrix barcode (or two-dimensional
barcode) first-designed in 1994 for the automotive industry Japan. A
barcode is machine-readable optical label that contains information about
the stem to which it is attached. In practice. QR codes often contain data for
a locator. identifier, or tracker that points to a website or application. A QK
code se four standardized encoding modes (numeric, alphanumeric,
Byte/binary. and kanji) to store data efficiently, extensions may also be
used.
 UPI (Unified Payment Interface) :- Unified Payments Interface (UPI) is a
system that powers multiple bank accounts into a single mobile application
(of any participating bank), merging several banking features, seamless
fund routing & merchant payments into one hood. it also caters to the "Peer
to Peer" collect request which can be scheduled and paid as per
requirement and convenience. With the above context in mind, NPCI
conducted pilot project launch with 21 member banks. The pilot project
launch was on 11th April 2016 by Dr. Raghuram u Rajan, Governor, RBI at
Mumbai. Banks have started to upload their UPI enahied Apps on Google
Play store from 25th August, 2016 onwards
 How is it unique?
 Immediate money transfer through mobile device round the clock 24*7 and 365
days
 Single mobile application for accessing different bank accounts.
 Single Click 2 Factor Authentication - Aligned with the Regulatory guidelines, yet
provides for a very strong feature of seamless single click payment
 Virtual address of the customer for Pull & Push provides for incremental security
with the customer not required to enter the details such as Card no, Account
number; IFSC etc.
 Merchant Payment with Single Application or In-App Payments.
 Utility Bill Payments, Over the Counter Payments, Barcode (Scan and Pay) based
payments.
 Participants in UPI - he participants of UPI are Payer PSP, Payee PSP, Remitter
Bank, Beneficiary Bank, NPCIBank
 Registration in UPI enabled application - UPI
 Steps for Registration:
1. User downloads the UPI application from the App Store/Banks website.
2. User creates his/her profile by entering details like name, virtual id (payment
address), password etc.
3. User goes to "Add/Link/Manage Bank Account" option and links the bank and
account number with the virtual id.
 AEPS (Aadhaar Enabled Payment System) - AEPS stands for 'Aadhaar
Enabled Payment System'. AEPS is a new payment service developed by the
National Payments Corporation of India to banks, financial institutions using
'Aadhaar'. This System is a bank led model which allows online financial
transaction at Point of Sale/Micro ATM through the Business Correspondent/Bank
Mitra of any bank using the Aadhaar authentication. Cash Deposit & Withdrawal,
Balance Enquiry & Mini Statement and. Aadhaar to Aadhaar Fund Transfer
facilities through AePS.

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Digital Financial

 In today's world, everything is digitized, which means we can

 Savings is the percentage of income which is not spent on present expenditures,

 Main objective of the Digital Financial Services is to delivering financial services

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