Debit and credit card

Debit and credit cards have changed the way the urban India shops. More and more shopkeepers are now installing the magnetic strip credit card readers next to their billing counters. The advent of internet shopping and eticketing has changed the scenario of shopping and ticket booking for many especially in urban India.
Online shopping market in India is worth Rs 1,300 crore and the growth rate is upwards of 30%. (Reference). The online travel industry is expected to grow to Rs. 28000 crore.
More statistics about the ecommerce in India is available here, here and here.  Especially booking train tickets online has changed the way we plan for train travelling. No wonder 1/3rd of all the ecommerce transactions in India are through IRCTC.

It has been around one year since I have started making use of the eticketing facilities offered by irctc, msrtc, etc and I have been amazed by the convenience the service offers for a service charge of Rs. 10 to Rs 25. The whole experience of booking ticket has become cashless and ticket booking happens very quickly (Well, the internet speed acts as a bottleneck here).

While I am really happy with the convenience the service offers, there is something about the whole procedure that makes me a bit uncomfortable. The transaction being cashless doesn't give a feel that we have lost money. E.g: My last irctc transaction involved a sum of Rs. 2273. Now this is a huge amount and parting with such a huge amount under normal circumstances (when we book tickets through agents or ticket counters) and makes us feel that we are spending too much and should put a control on expenditure we make. But this eticketing experience did not give any feeling that I am doing a transaction involving a huge sum. Infact, I was tempted to book an alternative ticket just in case I couldn't make it to the train on that day. The idea that I will be locking in Rs 2273 again didn't bother me at all. The feeling of parting with ones' hard earned money (or parents' hard earned money) just doesn't come in. And this is what makes me uncomfortable.

It happened to me once - there was a book store cum library newly opened up in a town and I just went to see the shop and was really amazed by its collection. So, I was tempted to become a member. I was about to give my debit card to the store owner to register me as a member. But then I discovered that I had forgotten my card. So, now I had no other option but to carry out the transaction with cash. But as the feeling of parting with so much cash (around Rs 1000) creeped in, I decided against becoming a member. And now I am really happy I didn't become a member. (I have a great collection of ebooks to keep me busy for around 5 years alongwith a great library at SCMHRD). Had I brought that card on that day I would have surely been tempted to become a member and would have wasted Rs 1000 unnecessarily.

Because of such services, I feel that the savings of people will decrease and people will spend more and more even though there is no need. I've seen a lot of my friends and colleagues buying books from infibeam just because it flashed on their laptop screen without any need. (Temptation to buy). So, I feel that one of the major reasons why people in the USA have a lower savings rate when compared to the Asian nations is the wide spread use of debit and credit cards.

Conclusion: While credit and debit cards have made transactions convenient, we should restrain from using it unnecessarily out of temptation and try to do cash transactions (part with ones' hard earned money), wherever possible, so as to value money (eventually save more).