Payment Modes and Systems

Class 7 Social Science · Chapter 20: Banks and the Magic of Finance · NCERT Exploring Society: India and Beyond section 20.4

Learn

Money can leave an account in many ways. You can fill a withdrawal slip at the bank, or use a debit card at an ATM, a 24×7 mini-bank, by inserting the card, typing the amount, entering your PIN (Personal Identification Number) and collecting cash. A cheque is a signed paper telling your bank to pay someone; it shows the date, payee's name, amount in words and figures, account number and MICR code, but it needs a bank visit and takes time. Debit cards also work in POS (point of sale) machines at shops, and internet banking lets you check balances and transfer money online.

The Unified Payments Interface (UPI), launched in 2016 by the NPCI, changed everything. Zoya's father scans a vegetable seller's QR code, types the amount and his UPI PIN; his bank sends the request to NPCI, which checks the PIN and moves the money to the seller's bank in seconds. UPI works in many languages, grew fast during COVID-19 when people avoided cash, and has been adopted abroad, starting with Nepal in 2022, then the UAE, France, Sri Lanka, Bhutan and Mauritius: India's gift to the world of payments.

Explore: withdraw cash from an ATM.

1. Put the ATM steps in order.

Remember

• Cash, withdrawal slips, ATMs, cheques, POS machines and internet banking move money.
• UPI, launched in 2016, makes instant phone payments and is spreading worldwide.

Quick check

Which payment system did NPCI launch in 2016?

1. UPI
2. the cheque
3. the ATM
4. the passbook

Think about it

Why did UPI spread so quickly in India?

Practice

Practise with fresh questions at three levels (easy, medium, hard), some answered hands-on, with hints and worked answers. Get 4 of your last 5 right to finish the topic.