Digital Transaction And Its Effects On Real Estate Industry

The government of India on November 8, 2016 has implemented demonetisation drive in order to curb the flow of Black Money and corruption from India which is immensely affected the economy of the Country for the last many years. After demonetisation drive, government is promoting digital transaction covering minimal circulation of physical currency for cashless economy. Digital Transaction is a type of transaction done using internet or the mode of electronic payments to help people of India to do more cheaper and efficient mode of payments in a more transparent medium with avoidance of tax evasion among people of the Country to boost economy of the country.  After resultant cash crunch followed demonetisation drive, Govt is promoting Digital transaction among citizen of India covering every area and each citizen to ensure their right to join its movement towards a cashless society and help in rid the Nation of Black Money and Corruption by offering many modes of payments and different discounts, prizes starting from Christmas and Announced on Dr Ambedkar Birthday.


 Different Modes used by government authority NPCI (National payments corporation of India) to do Digital transaction through following mediums:


  • RuPay card: It is a debit card exclusively promoted by government to meet the requirement of Indian customers especially among Rural Areas where people can easily apply and get Rupay card. As the transaction is happening within country the cost of settlement and clearing is easily affordable.


  • UPI: UPI (uniform payment internet) is the second common mode to be employed via which people can do digital transaction via an app. In order to avail this facility user has to link his mobile number with his bank account. Then download this UPI app while making unique id and setting pin on it. With this user can transfer any amount in any account in any part of the country.


  • USSD: That facility is employed by a common man with having a normal phone without smart features to have monetary transaction by only linking your phone number with your bank account details. A user can avail this service on the phone by dialing *99# in order to know their account balance, mini statement, money transfer, fund transfer and can be used in both Hindi and English language with *99*22# AND *99*33# as codes.


  • E-WALLET: E-Wallet means electronic wallet which is used for transactions through online via a computer and smart phone. Its utility is same as credit or debit card. It is a type of pre-paid account in which a user can store his/her money for online payments for purchasing clothes, groceries, railway, flight bookings as it is linked with Individual’s saving account to make payments.


Schemes employed by Govt to promote and encourage more digital transactions among general masses.   


Prizes offered by government on Christmas and Dr. Ambedkhar birthday with free gift rupees worth Rs 340 crores: Various Prizes and discounts are announced by government in order to encourage digital transaction among the citizen. These prices are applicable from Christmas on the Cashless   Transactions varying from Rs 50 up to Rs 3000.There are two Schemes announced by government to promote cashless transaction via 1. Digi-Dhan Vyapar Yojana for the shopkeepers, businessmen, merchants 2. Lucky Grahak Yojana for the prospective customers. Merchants Transaction will enable to win prizes every week of Rs 50,000, 5,000, 2500 Rupees. Announcement of Mega prizes of 50 lakh Rupees, 25 lakh Rupees, 12 lakh Rupees. Customer transact cashless helps him to win prizes Everyday 15,000 Customers, 1000 Rupees Prize, Every week Lucky Customer Win l lakh, 50,000 and 10,000 rupees. Three Mega Prizes includes 1 Crore Rupees, 50 Lakh Rupees, 25 Lakh Rupees. Mega Prizes of Both these Schemes will be announced on Dr. Ambedkar birthday on 14 April, 2017.


Discounts: Govt has announced a list of discounts to customers to encourage doing payment online (digital transactions) on availing various services which are as mentioned below: 1.) A discount of 0.75% of the sale price to consumers on purchase of petrol and diesel, 2.) 5% discounts for payment of services through digital means offered by Railways for paid services like catering, retiring rooms. 3.) Railways will provide discount of 0.5% on all railway bookings done after 1st January 2017 whose payments are made online for the monthly or seasonal tickets.4.)For railway passengers buying online ticket will enable him to get free insurance cover of Rs 10 lakh. Discounts of 10% will be given on fast tags cards for using at national highways. There will be no service tax charged for transaction done up to Rs 2000. Also to promote digital transaction as a medium of payment in rural areas POS machine are deployed in Villages.


Effects of Digital Transaction towards Cashless economy on Real Estate Industry:


  1. Efficiency in Financial transaction: Digital Transaction includes transaction done through online mediums using internet on computer or smart phones with above-mentioned modes helps to make the financial transaction both for the customer as well as Realtor efficient as it is cheaper, borderless. Digital cash payments are easily accessible both by Realtor and Customers as it helps safer to does since no physical presence of money is required. Money is easily credited into the account of Realtor within fractions of minutes without even wasting time standing in long queues in the bank.


  1. Reduce Prices of Properties in Real Estate Industry: Real Estate is one of the major sector in which most of black money is invested which inflates the prices of properties. But now with govt’s demonetisation drive govt is working against unaccounted money and its sources. Due to digital transaction more emphasis is on payments done through online. Hence, chances are likely there that there will be lower demands for properties in the market which helps real estate prices to go down. Also there will be more transparency in the dealings on the part of Realtors and chances are likely that it helps the realtors to lower down their property’s prizes and more likely towards building more  affordable homes.


  1. More transparency in business operations and money transfers: The digital transactions help both the parties (Realtor and customer) to have immediate gains saving a lot of time and all the transactions are on record that enables the customers to keep a track of their spending. This help in filing the income tax return and also help to explaining the details of your spending and accounted money.


  1. Speedy sophisticated services leading to Customer Satisfaction: Digital transactions help to speedy credit of money for getting services and possession of property for the customer as it ensures immediate financial gains. Instead of waiting days, week, even months for transaction to be completed. Digital transaction is done instantly which help to elevate the Realtor leading to increase customer satisfaction.


  1. Cheaper Resources: Digital cash will make transactions less expensive as it does not involve any physical presence of any teller, accountant, clerk and branch head in help in getting money to be paid to the Realtor for buying property. Customer can simply use his smart phone with internet connectivity by which he can credit money immediately into the account of Realtor.


  1. Relieve Stress: All the transaction which customer does for credit of money to pay the price for buying a property can be easily noted properly in your bank details account hence, there is no tension among the customer as to how to filing income tax returns and in case of any inquiry all the details of the digital transactions can be easily shown with the details of money given to Realtors as everything is on record.


  1. Broaden new Business Opportunities and expansion of economic activities on the Internet: Since digital transactions helps in immediate financial gains on the part of Realtors for all the dealings of property done by Customers covering details on record regarding payments and receipts, readily accessible digital audit trails to making documenting compliance for industry laws and regulation fast and easy for the customer broaden new business opportunities. Thus, digital transaction promotes efficient and frequent use of Internet.


Conclusion: Finance Minister Mr Arun Jaitley said that Government of India along with Reserve Bank is working on plans to cut the cost of digital transaction to minimal amount. Govt is also aware of the security reasons. Hence, Govt is working on all these aspects in order to boost the Economy of the Country with minimum flow of cash and not the cash itself. The clear picture of benefits of Digital Transaction can be seen once the Budget will be announced in the New Year.