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Introduction to Banking

Forms Of Digital Money

The opportunities regarding digital money are endless. Innumerable products are available world-wide incorporating different kinds of digital money. 

 

Some of the most popular forms of digital money include:

 

  • Debit Card: One of the most popular forms of digital money is a debit card. It is a plastic card which is an alternative to cash. These cards are issued to access someone’s savings/current account digitally.
  • Credit Card: A credit card is a plastic card that allows a person to borrow money against a line of credit. This line of credit is known as a credit card limit. A credit card can be used for making basic transactions. All transactions reflect on a bill commonly known as a credit card statement. 
  • Prepaid Card: These are plastic cards that are pre-loaded with a specific amount of money. The card can be used up to the balance loaded on the card. This card is not linked to any savings or current account. A common kind of prepaid card is a gift card which is often used to gift a sum of money to someone. Another useful prepaid card is a Forex Card which is issued in a foreign currency such as the US Dollar or British Pound. A Forex Card is loaded with a certain sum of money and can be used by people while they are visiting a foreign country. This has removed the requirement to carry physical foreign currency while traveling.  

Prepaid cards are becoming popular day by day. Most banks offer a range of prepaid cards to its customers, each issued for a specific purpose. Kotak Mahindra Bank offers five different kinds of prepaid cards to its customers - Forex Card, Kotak Netc@rd, Kotak Best Compliments Card, FasTag, Kotak Connect. 

 

Digital money issued through cards is popularly known as plastic money. 

 

  • Digital Currencies: These are online currencies that are exchanged over the internet, without being converted into cash. They are commonly known as Cryptocurrencies. It is a payment method that exists only in the electronic form. The acceptance of digital currency is yet quite low. However, they are gaining popularity worldwide. 
  • Digital-Payments: Digital payments or e-payments are options for making payments without having the need to physically move cash from one place to another. Banks across the world are continuously researching methods of online payment trying to make life convenient for its customers. The easiest form of online payment is RTGS, NEFT, IMPS and SWIFT discussed earlier in the book. Other popular forms of e-payments include ECS, e-payment of bills, mobile payment, and others. 
  • e-Wallets: e-Wallets or Digital Wallets as the name suggests are customer’s wallets held online. Customers fund these eWallets and use them for buying goods, paying bills, and a range of functions online. 

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