BANKING INNOVATION.

INTRODUCTION:

ETYMOLOGY:

The term bank is either derived from old Italian word banca or from a French word banque
both mean a Bench or money exchange table. In olden days, European money lenders or
money changers used to display (show) coins of different countries in big heaps (quantity) on
benches or tables for the purpose of lending or exchanging.

DEFINITION OF BANK:

Oxford Dictionary defines a bank as "an establishment for custody of money, which it pays
out on customer's order."

"Banking Business" means the business of receiving money on current or deposit account,
paying and collecting cheques drawn by or paid in by customers, the making of advances
to customers, and includes such other business as the Authority may prescribe for the
purposes of this Act; (Banking Act (Singapore), Section 2, Interpretation).

"Banking Business" means the business of either or both of the following:

Receiving from the general public money on current, deposit, savings or other
similar account repayable on demand or within less than [3 months] ... or with a
period of call or notice of less than that period;
Paying or collecting cheques drawn by or paid in by customers

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IMPORTANCE OF THE BANK:
Before the establishment of banks, the financial activities were handled by money lenders and
individuals. At that time, the interest rates were very high. Again, there were no security of
public savings and no uniformity regarding loans. So as to overcome such problems the
organized banking sector was established, which was fully regulated by the government. The
organized banking sector works within the financial system to provide loans, accept deposits
and provide other services to their customers. The following functions of the bank explain the
need of the bank and its importance:

To provide the security to the savings of customers.

To control the supply of money and credit.

To encourage public confidence in the working of the financial system, increase savings
speedily and efficiently.

To avoid focus of financial powers in the hands of a few individuals and institutions.

To set equal norms and conditions (i.e. rate of interest, period of lending etc) to all types of
customers

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FUNCTIONS OF BANK:

A BANK is a financial institution that accepts deposits from the public and creates credit.
Lending activities can be performed either directly or indirectly through capital markets. Due
to their importance in the financial stability of a country, banks are highly regulated in most
countries. Most nations have institutionalized a system known as fractional reserve banking
under which banks hold liquid assets equal to only a portion of their current liabilities. In
addition to other regulations intended to ensure liquidity, banks are generally subject to
minimum capital requirements based on an international set of capital standards, known as the
Basel Accords (Capital Risk, Market Risk & Operational Risk).

Finance is the life blood of trade, commerce and industry. Now-a-days, banking sector acts as
the backbone of modern business. Development of any country mainly depends upon the
banking system.

A bank is a financial institution which deals with deposits and advances and other related
services. It receives money from those who want to save in the form of deposits and it lends
money to those who need it. It is necessary to encourage people to deposit their surplus funds
with the banks. These funds are used -for providing loans to the industries thereby making
productive investments

Banking in India originated in the 18th century. The oldest bank in existence in India is the
State Bank of India, a government-owned bank in 1806. SBI is the largest commercial bank in
the country.

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After the independence, Reserve Bank of India was nationalized and given wide powers.
Currently, India has 96 Scheduled Commercial Banks, 27 public sector banks, 31 private banks
and 38 foreign banks.

A banking system also referred as a system provided by the bank which offers cash
management services for customers, reporting the transactions of their accounts and portfolios,
throughout the day. The banking system in India, should not only be hassle free but it should
be able to meet the new challenges posed by the technology and any other external and internal
factors. For the past three decades, Indias banking system has several outstanding
achievements to its credit. The Banks are the main participants of the financial system in India.
The Banking sector offers several facilities and opportunities to their customers. All the banks
safeguards the money and valuables and provide loans, credit, and payment services, such as
checking accounts, money orders, and cashiers cheques. The banks also offer investment and
insurance products. As a variety of models for cooperation and integration among finance
industries have emerged, some of the traditional distinctions between banks, insurance
companies, and securities firms have diminished. In spite of these changes, banks continue to
maintain and perform their primary roleaccepting deposits and lending funds from these
deposits.

Accounting for trillions in assets worldwide, the banking system is a crucial component of the
global economy. While money-changing and money-lending may be as old as money, banking
dates back to 15th century medieval Italy, and played a major role in the rise of the Italian city-
states as world economic powers. Ever since, the health of an economy and the health of its
banks have been interrelated; the global credit crisis, precipitated by the collapse of the
subprime - fueled U.S. housing bubble, is only the most recent example.

Banks are just one part of the world of financial institutions, standing alongside investment
banks, insurance companies, finance companies, investment managers and other companies
that profit from the creation and flow of money. As financial intermediaries, banks stand
between depositors who supply capital and borrowers who demand capital. Given how much
commerce and individual wealth rests on healthy banks, banks are also among the most heavily
regulated businesses in the world.

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HISTORY OF BANKING SECTOR:

The first bank in India, called The General Bank of India was established in the year 1786. The
East India Company established The Bank of Bengal/Calcutta (1809), Bank of Bombay (1840)
and Bank of Madras (1843). The next bank was Bank of Hindustan which was established in
1870. These three individual units (Bank of Calcutta, Bank of Bombay, and Bank of Madras)
were called as Presidency Banks. Allahabad Bank which was established in 1865, was for the
first time completely run by Indians. Punjab National Bank Ltd. was set up in 1894 with
headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank
of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. In 1921, all presidency
banks were amalgamated to form the Imperial Bank of India which was run by European
Shareholders. After that the Reserve Bank of India was established in April 1935.

At the time of first phase the growth of banking sector was very slow. Between 1913 and 1948
there were approximately 1100 small banks in India. To streamline the functioning and
activities of commercial banks, the Government of India came up with the Banking Companies
Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of
1965 (Act No.23 of 1965). Reserve Bank of India was vested with extensive powers for the
supervision of banking in India as a Central Banking Authority. After independence,
Government has taken most important steps in regard of Indian Banking Sector reforms. In
1955, the Imperial Bank of India was nationalized and was given the name "State Bank of
India", to act as the principal agent of RBI and to handle banking transactions all over the
country. It was established under State Bank of India Act, 1955. Seven banks forming
subsidiary of State Bank of India was nationalized in 1960. On 19th July , 1969, major process
of nationalization was carried out. At the same time 14 major Indian commercial banks of the
country were nationalized. In 1980, another six banks were nationalized, and thus raising the
number of nationalized banks to 20. Seven more banks were nationalized with deposits over
200 Crores. Till the year 1980 approximately 80% of the banking segment in India was under
governments ownership. On the suggestions of Narsimhan Committee, the Banking
Regulation Act was amended in 1993 and thus the gates for the new private sector banks were
opened. The following are the major steps taken by the Government of India to Regulate
Banking institutions in the country:

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 1949 : Enactment of Banking Regulation Act.
1955 : Nationalisation of State Bank of India.
1959 : Nationalization of SBI subsidiaries.
1961 : Insurance cover extended to deposits.
1969 : Nationalisation of 14 major Banks.
1971 : Creation of credit guarantee corporation.
1975 : Creation of regional rural banks.
1980 : Nationalisation of seven banks with deposits over 200 Crores.

Banking began with the first prototype banks of merchants of the ancient world, which made
grain loans to farmers and traders who carried goods between cities. This began around
2000BC in Assyria and Babylonia. Later, in ancient Greece and during the Roman Empire,
lenders based in temples made loans and added two important innovations: they accepted
deposits and changed money. Archaeology from this period in ancient China and India also
shows evidence of money lending activity.

The origins of modern banking can be traced to medieval and early Renaissance Italy, to the
rich cities in the centre and north like Florence, Lucca, Siena, Venice and Genoa. The Bardi
and Peruzzi families dominated banking in 14th-century Florence, establishing branches in
many other parts of Europe.

One of the most famous Italian banks was the Medici Bank, set up by Giovanni di Bicci de'
Medici in 1397. The earliest known state deposit bank, Banco di San Giorgio (Bank of St.
George), was founded in 1407 at Genoa, Italy.

Modern banking practices, including fractional reserve banking and the issue of banknotes,
emerged in the 17th and 18th centuries. Merchants started to store their gold with the
goldsmiths of London, who possessed private vaults, and charged a fee for that service. In
exchange for each deposit of precious metal, the goldsmiths issued receipts certifying the
quantity and purity of the metal they held as a bailee; these receipts could not be assigned, only
the original depositor could collect the stored goods.

Gradually the goldsmiths began to lend the money out on behalf of the depositor, which led to
the development of modern banking practices; promissory notes (which evolved into
banknotes) were issued for money deposited as a loan to the goldsmith. The goldsmith paid

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interest on these deposits. Since the promissory notes were payable on demand, and the
advances (loans) to the goldsmith's customers were repayable over a longer time period, this
was an early form of fractional reserve banking.

The promissory notes developed into an assignable instrument which could circulate as a safe
and convenient form of money backed by the goldsmith's promise to pay, allowing goldsmiths
to advance loans with little risk of default. Thus, the goldsmiths of London became the
forerunners of banking by creating new money based on credit.

The sealing of the Bank of England Charter

(1694).

The Bank of England was the first to begin the permanent issue of banknotes, in 1695. The
Royal Bank of Scotland established the first overdraft facility in 1728. By the beginning of the
19th century a bankers' clearing house was established in London to allow multiple banks to
clear transactions. The Rothschilds pioneered international finance on a large scale, financing
the purchase of the Suez canal for the British government.

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Nationalisation:

By the 1960s, the Indian banking industry has become an important tool to facilitate the
development of the Indian economy. At the same time, it has emerged as a large employer, and
a debate has ensured about the possibility to nationalise the banking industry. Indira Gandhi,
the-then Prime Minister of India expressed the intention of the Government of India (GOI) in
the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on
Bank Nationalisation". The paper was received with positive enthusiasm. Thereafter, her move
was swift and sudden, and the GOI issued an ordinance and nationalised the 14 largest
commercial banks with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a
national leader of India, described the step as a "Masterstroke of political sagacity" Within two
weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition
and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August, 1969.
A second step of nationalisation of 6 more commercial banks followed in 1980. The stated
reason for the nationalisation was to give the government more control of credit delivery. With
the second step of nationalisation, the GOI controlled around 91% of the banking business in
India. Later on, in the year 1993, the government merged New Bank of India with Punjab
National Bank. It was the only merger between nationalised banks and resulted in the reduction
of the number of nationalised banks from 20 to 19. After this, until the 1990s, the nationalised
banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.
The nationalised banks were credited by some; including Home Minister P. Chidambaram, to
have helped the Indian economy withstand the global financial crisis of 2007-2009.

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Liberalisation:

In the early 1990s, the then Narsimha Rao government embarked on a policy of liberalisation,
licensing a small number of private banks. These came to be known as New Generation tech-
savvy banks, and included Global Trust Bank (the first of such new generation banks to be set
up), which later amalgamated with Oriental Bank of

Commerce, Axis Bank (earlier as UTI Bank), ICICI Bank and HDFC Bank. This move along
with the rapid growth in the economy of India revolutionized the banking sector in India which
has seen rapid growth with strong contribution from all the three sectors of banks, namely,
government banks, private banks and foreign banks. The next stage for the Indian banking has
been setup with the proposed relaxation in the norms for Foreign Direct Investment, where all
Foreign Investors in banks may be given voting rights which could exceed the present cap of
10%, at present it has gone up to 49% with some restrictions.

The new policy shook the banking sector in India completely. Bankers, till this time, were used
to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The new wave
ushered in a modern outlook and tech-savvy methods of working for the traditional banks. All
this led to the retail boom in India. People not just demanded more from their banks but also
received more. In 2007, banking in India is generally fairly mature in terms of supply, product
range and reach-even though reach in rural India still remains a challenge for the private sector
and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are
considered to have clean, strong and transparent balance sheets as compared to other banks in
comparable economies in its region. The Reserve Bank of India is an autonomous body, with
minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is
to manage volatility but without any fixed exchange rate-and this has mostly been true. With
the growth in the Indian economy expected to be strong for quite some time-especially in its
services sector-the demand for banking services, especially retail banking, mortgages and
investment services are expected to be strong.

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Government policy on banking industry (Source:- The federal Reserve Act
1913 and The Banking Act 1933)

Banks operating in most of the countries must contend with heavy regulations, rules enforced
by Federal and State agencies to govern their operations, service offerings, and the manner in
which they grow and expand their facilities to better serve the public. A banker works within
the financial system to provide loans, accept deposits, and provide other services to their
customers. They must do so within a climate of extensive regulation, designed primarily to
protect the public interests.

The main reasons why the banks are heavily regulated are as follows:

To protect the safety of the publics savings.

To control the supply of money and credit in order to achieve a nations broad economic goal.

To ensure equal opportunity and fairness in the publics access to credit and other vital
financial services.

To promote public confidence in the financial system, so that savings are made speedily and
efficiently.

To avoid concentrations of financial power in the hands of a few individuals and institutions.

Provide the Government with credit, tax revenues and other services.

To help sectors of the economy that they have special credit needs for eg. Housing, small
business and agricultural loans etc.

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Law of banking

Banking law is based on a contractual analysis of the relationship between the bank and
customerdefined as any entity for which the bank agrees to conduct an account. The law
implies rights and obligations into this relationship as follows:

The bank account balance is the financial position between the bank and the customer: when
the account is in credit, the bank owes the balance to the customer; when the account is
overdrawn, the customer owes the balance to the bank.

The bank agrees to pay the customer's cheques up to the amount standing to the credit of the
customer's account, plus any agreed overdraft limit.

The bank may not pay from the customer's account without a mandate from the customer,
e.g. cheques drawn by the customer.

The bank agrees to promptly collect the cheques deposited to the customer's account as the
customer's agent, and to credit the proceeds to the customer's account.

The bank has a right to combine the customer's accounts, since each account is just an aspect
of the same credit relationship.

The bank has a lien on cheques deposited to the customer's account, to the extent that the
customer is indebted to the bank.

The bank must not disclose details of transactions through the customer's accountunless
the customer consents, there is a public duty to disclose, the bank's interests require it, or the
law demands it.

The bank must not close a customer's account without reasonable notice, since cheques are
outstanding in the ordinary course of business for several days.

These implied contractual terms may be modified by express agreement between the customer
and the bank. The statutes and regulations in force within a particular jurisdiction may also
modify the above terms and/or create new rights, obligations or limitations relevant to the bank-
customer relationship.

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CHARACTERISTICS / FEATURES OF BANK:

1. Dealing in Money

Bank is a financial institution which deals with other people's money i.e. money given by
depositors.

2. Individual / Firm / Company

A bank may be a person, firm or a company. A banking company means a company which is
in the business of banking.

3. Acceptance of Deposit

A bank accepts money from the people in the form of deposits which are usually repayable on
demand or after the expiry of a fixed period. It gives safety to the deposits of its customers. It
also acts as a custodian of funds of its customers.

4. Giving Advances

A bank lends out money in the form of loans to those who require it for different purposes.

5. Payment and Withdrawal

A bank provides easy payment and withdrawal facility to its customers in the form of cheques
and drafts, It also brings bank money in circulation. This money is in the form of cheques,
drafts, etc.

6. Agency and Utility Services

A bank provides various banking facilities to its customers. They include general utility
services and agency services.

7. Profit and Service Orientation

A bank is a profit seeking institution having service oriented approach.

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8. Ever increasing Functions

Banking is an evolutionary concept. There is continuous expansion and diversification as

regards the functions, services and activities of a bank.

9. Connecting Link

A bank acts as a connecting link between borrowers and lenders of money. Banks collect
money from those who have surplus money and give the same to those who are in need of
money.

10. Banking Business

A bank's main activity should be to do business of banking which should not be subsidiary to
any other business.

11. Name Identity

A bank should always add the word "bank" to its name to enable people to know that it is a
bank and that it is dealing in money.

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TECHNOLOGY TRENDS IN INDIAN BANKING SECTOR.

Banking is backbone of any economy. The success of an economy is supported by a strong

banking system and similarly banks are more successful when the economy does well. For
banks to be successful, it is imperative to increase their customer base, retain their existing
customer and offer customers the products and services which are most beneficial to them.
In todays technology savvy customer base, it is very important for banks to adapt the latest
technology, such that banks are able to catch up with the pace with which customer preferences
changes. Adaption of newer technology is also critical to challenge competitor banks and other
institutions in offering products and services in the market place.
While we focus this article on the current and future technology trends that impact banking and
financial services, let us quickly glance through the technology developments adapted in the
Indian Banking thus far.

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Mechanisation - 1980s:

Banking sector in India embraced technology right from 80s, a period which witnessed
mechanisation of transactions and processes. This period saw the introduction of encoders,
standard cheques and (mechanisation of) cheque processing post the implementation of MICR.
This eliminated manual way of processing negotiable instruments particularly cheques and
bank drafts.

Automation 1990s:

A decade starting from early 90s saw massive effort towards computerisation of Indian
Banking systems. All branches were computerised. This resulted in high productivity
improvements and banks were able to expand their products and services offered to customers.
Connectivity between branches was taken up post computerisation. This facilitated cross
branch transactions and eventually paved the platform for anywhere banking. Introduction of
Electronic Funds Transfer (EFT) was a milestone achievement, which facilitated seamless
transfer of funds between customers, branches, banks and other institutions. Core Banking
solutions were implemented which introduced seamless transaction processing between
different departments within the bank processing various products and services. It also
improved the overall efficiency of banking operations. Productivity of bank employees
improved substantially.
This decade saw the introduction of ATM as well, which changed the entire gamut of
customers experience in banking
for cash transaction and other services like ordering cheque book, account statement, etc.
Tech savvy New Private Banks: New Private Sector Banks commenced business as a result of
New Economic Reform of 1991. These Banks were established as Tech Savvy Banks which
introduced advanced technology of the time. These banks not only brought in new technology,
but alsoattracted customers from old banks into their fold. This compelled the existing banks
to focus on adapting technology in their firms as well.

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New Millennium:

The birth of new millennium (year 2000) changed all facets of banking sector. Internet was
adapted by banks and brought in all new experience of banking. Customers were not required
to visit branches for many transactions. Further down the line, introduction of ECS and
subsequently NEFT and RTGS facilitated quick transfer of funds anywhere irrespective of the
branch, bank, and location. Cross location funds transfer which took days then was transformed
to be completed in hours and in some cases minutes.
In the last few years, we are witnessing development of technology revolving mobile. Mobile
Banking is all together a new game. Customers experience banking just by touch of their smart
phones.

Current Technology Challenges:

Technology has changed everything that not everyone is able to keep pace with it. Banks have
a rough time adapting to new world. In the recent past, Banks were busy with compliance with
the regulatory requirements. Some were so busy that they failed to adapt to newer technology.
However at the same period, FinTech firms have developed technologies that are disruptive in
nature to the critical business of banking. Businesses that were exclusive domain of banking
have been eaten away by the new Fintech firms. This has left Banks with no choice but to either
innovate newer ways of doing business or collaborate with FinTechs and adapt new
technology. This is essential to stay in the business.

Banks vs FinTech:

Financial Technology firms also called as FinTechare firms that develop new technology that
basically target future needs of financial business and services. In most cases, innovations by
FinTech disrupt the current functioning of banks since the business driven by newer technology
eats into the business that
banks are performing in the traditional way. There has been burst of FinTech in recent times
working on various technologies to change the way customers experience financial services.
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Future of Banking:

Banks and FinTech around the globe are working in innovating newer technology to change
the entire banking and financial space.
Technology will focus on eliminating manual efforts in all transactions and move towards
automation. Current methods of login, typing and keying transaction will be replaced with
automatic methods like biometrics, speech recognition, gesture recognition. Robotics, kiosk,
smart interactive devices and interfaces will take the place of Banking staff and representatives.
Let us look into few technologies that have been implemented recently or being under
development in various parts of the world and how they are going to impact the future of
banking.

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Next generation Authentication:

By Authentication, I refer to the process of a Banking customer establishing his identity with
the banking systems like User ID & password in the case of internet banking, PIN in the case
of ATM, Mobile PIN in the case of Mobile Banking, TPIN in the case of telebanking. These
methods of authentication will be replaced by Biometrics like fingerprints and Iris scan,
behavioral biometrics like the way customers type in the key board, click the mouse, facial
expression (smile on the face, blink of eyes), gestures and speech recognition.
Banks and Fin Techs together are working on technologies where customers can enter branches
after their identity being authenticated by their eye scan (Iris scan). Iris Scan authentication
technology is becoming less expensive to a fraction of the cost that was few years ago.

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Also, technology is being developed where customers can enter branch by scanning their smart
watch.
Many banks in US and Europe have already implemented them and few banks in India too
have started using these methods. With more and more of banking happening through Mobile
and Internet, innovative biometric authentication will become order of the day. This will not
only serve the purpose of customer convenience and usability, but also enhance the security
features associated with authentication.

Mobile Wallets:

Mobile wallets are mechanism to make and receive payments through mobile phones. Mobile
wallets are growing at a phenomenal pace. The convenience of making payments through
mobile phones is replacing cash payments and credit card payments. Mobile wallets are
changing the way cash transactions take place around the world.
The demonetisation announced by the Indian Government on 8th November 2016 will force
more people to move towards mobile wallets rather than cash transactions. With more than a
billion smart phone holders in India, the use of mobile wallets is bound

Banking on the drive:

Technology has been developed to perform banking functions while driving a car. Mobile
Banking Apps interact with software in car to recognise voice and transaction can be performed
by speaking with the system. Functions like locating a branch or ATM and even transaction
like funds transfer and balance check can be performed with this technology. While cars in
advanced countries already have interactive systems, it is only matter of time this technology
will be widely used in India as well.

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Bank on your wrist:

The use of smartwatch like Apple Watch and Android smart watches is growing at phenomenal
pace. The technology to build banking app in smart watches (wearable gadgets) is also catching
up fast.
Smart watches will be used to carry out banking transactions and interact with bankers. We
will also see technology being developed where customers will be able to enter a bank by
scanning their smartwatch.
Smart Branches: Banks in US and Europe have already set up Smart Bank Branches. Smart
Branches will be unmanned. They are equipped with smart kiosks through which customers
can interact to perform their banking transactions. Smart branches will be tiny in size compared
to size of the existing branches (1/10th of the current branch sizes), thus reducing the cost of
operating a branch. Next Generation customers will enjoy the experience of banking in a smart
branch.

Robotics:

Robotics will take the role of bank staff. Customer will be able to interact with Robots for their
banking transactions. Robots will function using speech recognition technology and facial
expression recognition. While Robotics may be cost effective in advanced countries where cost
of operating banks are very high, it may still take some time in India as the cost of Robotics
will be far more than the benefit. However, it is again a matter of time these technologies is
brought to India.

Video Banking (or) Virtual Reality:

Technology is under development to do banking virtually via video. Customers will be able to
virtually enter bank through a virtual reality simulation headset and interact with bank

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representatives and also perform transactions. This technology is already being piloted in a
bank in USA.

Intelligent Banking:

With advancement of technology in Data analytics and Artificial intelligence, banks will use
behaviour patterns of customers to understand their desires & needs and offer products &
services which will suit their needs. Data captured from multiple sources like their social
network media, income &expense patterns from credit cards & bank accounts, travel patterns,
etc will be mined using data analytics to understand the needs of customers and Banks will be
able to offer personalised products to suit their needs.
With the help of Internet of Things (IOT), the various technologies that are being developed
(smart watch, smart phone, and social media) will all be integrated and interact with each other
enabling seamlessly banking. For instance, data from social network media will be leveraged
by banks to offer customised products and services, well before the customer approaches the
bank. Big data will facilitate data mining and analysis to arrive at customer needs. The
customised products and services will be marketed to their customers through their social
media account. When the customer accepts the product, the information will be automatically
routed to the banking software which will process the product/service and release the credit
facility to the customer or their beneficiary. All these transaction processing will be automatic
without any human interference and will be completed in a matter of no time.
While most of these technologies are in advance stages of development and implementation in
developed economies, it is only a matter of time India will get there, as India always has the
history of leap frogging in adapting newer technologies.

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 IMPORTANCE IN CASHLESS ECONOMY.

INTRODUCTION TO CASHLESS ECONOMY.

The government has implemented a major change in economic environment by demonetizing

the high value currency notes of Rs 500 and Rs 1000 from 8th November 2016 and push
India towards cashless future.

WHAT IS CASHLESSECONOMY AND WHERE DOES INDIA STAND:

A cashless economy is one in which all the transactions are done through electronic
channels such as debit/credit cards, Immediate Payment Service (IMPS), National Electronic
Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS).
The circulation of physical currency is minimum.
The Indian economy continues to be driven by the use of cashless than 5% of all payments
happen electronically.
Electronic based transaction seeks to drive the development and modernization of Indias
payment system.
The essence of the policy is to shift the economy from a cash based economy to a cashless one.
Efficient and modern payment system is a key enabler for driving growth and development.
The policy also aims at improving the effectiveness of monetary policy, managing inflation in
the economy, maintaining stable pricing system.
In India, the ratio of cash to gross domestic product is 12.42 %in GDP; this is one of the
highest in the world.
It was 9.47% in China or 4 % in Brazil. Further, the number of currency notes in circulation is
also far higher than in other large economies, India had 76.47 billion currency notes in
circulation in 2012-13 compared with 34.5 billion in US.
The government is working at various levels to reduce the dependence on cash.
PM-Narendra Modi unveiled two schemes Lucky GrahakYojna, Digi
DhanVyapaarYojna for customers and traders like to promote mobile banking and e-
payments.
To encourage and strengthen cashless economy its important to inculcate the habit of making
e-payments.

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Government encourages cashless transactions like mobile banking, Ru-pay cards, UPI,
USSD these are means and methods of digital payments.
Less cash economy is in the interest of everyone and it will help in creating a clearer economy
in future.
Government have also introduced Aadhar based payment system, this is for those people
who dont have cards or mobile phones.
Reducing Indian economys dependence on cash is desirable for a variety of reasons.
To control counterfeit notes that could be contributing to terrorism, It also affect the monetary
policy of our country and to eliminate the black money, hawala transfers can't be made
without paper currency, Curbs illegal activities altogether.
A large part of black money is generated in illegal trades like selling drugs therefore without
cash or less cash illegal trade might become difficult.
RBI has also issued licenses to open new-age small finance banks and payments banks which
are expected to give a push to financial inclusion and bring innovative banking solutions.
Things are also falling in place in terms of technology for India.
The recently launched Unified Payments Interface by National Payments Corporation of India
makes digital transactions simple.
Even the RBI has also recently unveiled a document, Payments and Settlement Systems in
India: Vision 2018, setting out a plan to encourage electronic payments and to enable India
to move towards a cashless society or economy in the medium and long term.

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BENEFITS OF CASHLESS ECONOMY

Positive Impact on Society

We are seeing the impact of cashless economy on the society when it comes to crime rates.

According to Union defense minister after demonetization the crime rates in Mumbai has
dropped to half.

Not just Mumbai but Delhi is seeing a substantial decline in crimes related to financial motive.

Bank robbery, burglary, extortion etc are declining because of demonetization.

Attack on Parallel Economy

This is one of the most important reasons why a cashless society is must.

People who hoard money under their bed (also known as black money), people who launder
money bypassing banking channels, terrorist who need money to finance their terror etc will
run out of business now.

Size of Parallel economy will reduce substantially.

Financial Inclusion

Digital economy will help to enhance our current banking system. There will be increased
access to credit for people who did not fall in any banking network.

Financial inclusion will automatically reduce poverty.

Increase the Tax Net

All the transactions that are done can be monitored and traced back to a given individual.

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If officials from tax department smell something fishy then they can trace the money
transaction back to the individual.

Hence it will be really difficult for someone to evade tax. Increasing tax net is very important
for any government.

Boost in Consumption

There would be no incentive for people keeping money in the bank. So they would love to
spend on things that they like.

It will help to boost consumption that is really good for any economy. More jobs will be created
and income level of people will rise.

Security and Convenience

Last but not the least is security and convenience. You dont have to carry a wallet with money
in it.

You just use your mobile phone or credit card for transaction. It is very hassle free and already
going on in urban areas of the country.

Tax Avoidance

Reduced instances of tax avoidance because it is financial institutions based economy where
transaction trails are left.

Reduction in Black Money

It will curb generation of black money

Reduction in Real Estate Pricing

Will reduce real estate prices because of curbs on black money as most of black money is
invested in Real estate prices which inflates the prices of Real estate markets

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 In Financial year 2015, RBI spent Rs 27 billion on just the activity of currency issuance
and management. This could be avoided if we become cashless society.
It will pave way for universal availability of banking services to all as no physical
infrastructure is needed other than digital.
There will be efficiency gains as transaction costs across the economy should also come
down.
1 in 7 notes is supposed to be fake, which has a huge negative impact on economy, by
going cashless, that can be avoided.
Hygiene Soiled, tobacco stained notes full of germs are a norm in India. There are many
such incidents in our life where we knowingly or unknowingly give and take germs in the
form of rupee notes. This could be avoided if we move towards Cashless economy.
In a cashless economy there will be no problem of soiled notes or counterfeit currency
Reduced costs of operating ATMs.
Speed and satisfaction of operations for customers, no delays and queues, no interactions
with bank staff required.
A Moodys report pegged the impact of electronic transactions to 0.8% increase in GDP
for emerging markets and 0.3% increase for developed markets because of increased
velocity of money

An increased use of credit cards instead of cash would primarily enable a more detailed record
of all the transactions which take place in the society, allowing more transparency in business
operations and money transfers.

This will eventually have the following chain effect:

1. Improvement in credit access and financial inclusion, which will benefit the growth of
SMEs in the medium/long run.
2. Tax avoidance and money laundering thanks to the higher traceability of all the
transactions.
3. The increased use of credit cards will definitely re duce the amount of cash that people will
carry and as a consequence, reduce the risk and the cost associated with that.

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CHALLENGES IN MAKING INDIA A CASHLESS ECONOMY

Security Cyber Attack, Fraud and Power Outages

Cashless economy can be a nightmare when it comes to security. All your transactions will
be done digitally.
You will be prone to cyber attacks like hacking. Hackers can hack your sensitive
information like password, credit card number etc and leave your account with no money.
Even your personal computer is compromised. You can save yourself from fraud but it is
very difficult to save from a cyber attack.
Finally if there is a power outage especially in India which is very regular then entire system
will be affected for long time.

Have to Trust Government or Third party

As I said earlier there is no money in your hand. All the money is digital so either they are
in control of banks or government or any other third party.
You have to trust government or bank blindly because everything is under their possession.
This is could be scary because if tomorrow something happens you will be left with no hard
cash.

Reduced Liquidity means Bad for Certain Sectors

There are certain sectors which depend upon high level of transaction.
Sectors like Real Estate, jewelry, retail industry, restaurants and eating joints, cement and
other SME will be affected badly because of cashless society.
It means a lot people who are employed by these sectors are also going to be affected.

Really Bad for Poor

This is the real point and will be debating this in great details in following paragraph. Here
I just want to say cashless economy is really going to hurt poor.

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 Availability of internet connection and financial literacy.
Though bank accounts have been opened through Jan Dhan Yojana, most of them are lying
un operational. Unless people start operating bank accounts cashless economy is not
possible.
There is also vested interest in not moving towards cashless economy.
India is dominated by small retailers. They dont have enough resources to invest in
electronic payment infrastructure.
The perception of consumers also sometimes acts a barrier. The benefit of cashless
transactions is not evident to even those who have credit cards. Cash, on the other hand, is
perceived to be the fastest way of transacting for 82% of credit card users. It is universally
believed that having cash helps you negotiate better.
Most card and cash users fear that they will be charged more if they use cards. Further,
non-users of credit cards are not aware of the benefits of credit cards.
Indian banks are making it difficult for digital wallets issued by private sector
companies to be used on the respective bank websites. It could be restrictions on using
bank accounts to refill digital wallets or a lack of access to payment gateways. Regulators
will have to take a tough stand against such rent-seeking behaviour by the banks.

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Steps taken by RBI and Government to discourage use of cash

Licensing of Payment banks

Government is also promoting mobile wallets. Mobile wallet allows users to instantly send
money, pay bills, recharge mobiles, book movie tickets, send physical and e-gifts both
online and offline. Recently, the RBI had issued certain guidelines that allow the users to
increase their limit to Rs 1,00,000 based on a certain KYC verification

Promotion of e-commerce by liberalizing the FDI norms for this sector.

Has also launched UPI which will make Electronic transaction much simpler and faster.

Government has also reduced surcharge, service charge on cards and digital payments

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How Far are We From Becoming a Cashless Society?: A Ground
Reality
Before we dream of becoming a cashless economy we have to face many realities. Here are
some of them.

1. Half of the Population Does not Fall in Any Banking System

As I said earlier 50% of Indians are not covered by any banking system so how you can think
of cashless economy.

2. Limit Internet Penetration

In India there are over 350 million internet users. The internet penetration rate is just 27%
which is very low compared to countries like Nigeria, Kenya, and Indonesia etc.

It has to be at least 67% which is global median.

3. Limited Smartphone Penetration

Only 17% of Indians use smartphones which is very low if you want to become a cashless
economy.

4. Limited Smartphone with Broadband Subscription

Only 15% of Indians have internet on their smartphone. So it will be only 154 million people
with broadband on their smartphones.

5. Internet Speed

The internet loading speed is very slow. The average page load time in India is 5.5 seconds
whereas in China is just 2.6 seconds.

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6. Limited PoS Machines

PoS machines (Point of sales) are must for any cashless transactions. However in India there
are only 1.46 million PoS machines. It means only 856 machines per million people which is
very low compared to China where it is 4000 machines per million people.

7. Rich Vs Poor Debate

The whole debate about cashless economy revolves around rich versus poor.

Here we are not talking about Sweden or Denmark but India.

Still people in this country struggle to meet their basic needs like food, cloth and shelter.

Over half of the population does not fall in any banking network. They still have to depend
upon hard cash for meeting their basic needs.

Poor people have to suffer a lot because they will not be covered.

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On the other hand, people living in urban areas will benefit because the cashless economy
is for them.

Government has to be inclusive and include all sections of society before they go for a cashless
economy.

Otherwise poor which is more than 50% of the country will reject cashless economy and
government has to suffer set back in coming elections.

So you can conclude by saying cashless economy is good if it is inclusive otherwise it is really
bad.

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MODES OF PAYMENT.

Electronic Fund Transfer

Electronic Fund Transfer is the process by which money is transferred from one place to other
electronically on a real-time basis. Salary placed into account by Electronic Fund Transfer,
Money withdrawn from ATM is the examples of Electronic Fund Transfer. Through this
scheme, work from home becomes easier, quick and safe. Currency and Exchange rate are
automatically calculated when funds are being transferred from one country to other. In this
system, Encryption, Verification and passwords are used for secure payments. Any transactions
of sale, refund, withdrawal, deposit, payments and so on can be performed under EFT.
Electronic Fund Transfer Point of Sale technology empowers a retailer to directly debit a
customers bank account by using a debit card. Debit card swiped through a reading machine
and the PIN number has to be provided to enhance transaction. Cashless options available in
India through banking innovations are,

NEFT

National Electronic Fund transfer mechanism assist fund transfer from one bank to other
through RBI server and settlement occurs on net basis. Every day, RBI system enables 3
sessions of electronic clearing and after the completion of each session; the net amount will be
settled among banks through their current accounts maintained with RBI. NEFT settlement
happens within 24 hours and there is no limit for amount transacted. The condition here is that,
the two branches of bank must be Core Banking Solution enabled.

RTGS

Real Time Gross Settlement is a payment mechanism for interbank payments. In this method,
one bank makes payment electronically to another bank through RBI. Paying bank sends a
message to RBI, based on which it debit current account paying bank and credit current account
of receiving bank without a time lag. Banks participating in RTGS have to maintain a current
account with RBI and each transaction is settled within 2 hours. Transaction or remittance made
through RTGS can never be cancelled or modified. RTGS is done through interfacing Core

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Banking Solution of 2 banks with computer server of RBI. The transaction limit under RTGS
is minimum 100000 rupees.

IMPS

Immediate Payment Service was introduced by National Payments Corporation of India in

2010. It is an instant real time interbank electronic fund transfer system of India through mobile
phone. This facility is available on a 24*7* basis.

UPI

Unified Payment Interface interconnects banks to help transfer funds. In this mode, both money
sender and receiver need a UPI identity. Currently thirty banks in India offer this facility.

USSD

Unstructured Supplementary Service Data helps customers to link their mobile number and
bank accounts and then to make payments. It was developed by National Payments
Commission of India which is technology based service for feature phones through which
customers needed to dial *99# and enter short messages for basic banking activities such as
balance enquiry and generating mini statement.

Mobile Banking

It refers to conduct of banking operations on mobile. The services under mobile banking
involves, making enquiry about bank balance and last few transactions, viewing details of bank
account, order demand draft and so on. It is a service provided by a bank or other financial
institution that allows customers to conduct financial transactions via mobile device like mobile
phone or tablet. Mobile banking uses software called an app for this purpose. This facility is
available on a 24hour basis and some banks impose restrictions on which accounts can be
accessed and limits the amount of transaction.

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What else needs to be done?

Open Bank accounts and ensure they are operationalized.

Abolishment of government fees on credit card transactions; reduction of interchange
fee on card transactions; increase in taxes on ATM withdrawals.
Tax rebates for consumers and for merchants who adopt electronic payments.
Making Electronic payment infrastructure completely safe and secure so that incidents
of Cybercrimes could be minimized and people develop faith in electronic payment
system.
Create a culture of saving and faith in financial system among the rural poor.
The Reserve Bank of India too will have to come to terms with a few issues, from
figuring out what digital payments across borders means for its capital controls to how
the new modes of payment affect key monetary variables such as the velocity of money.
RBI will also have to shed some of its conservatism, part of which is because it has
often seen itself as the protector of banking interests rather than overall financial
development.
The regulators also need to keep a sharp eye on any potential restrictive practices that
banks may indulge in to maintain their current dominance over the lucrative payments
business.

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 DEMONETIZATION.

INTRODUCTION:

On November 8 Prime Minister Narendra Modi announced the governments decision to

demonetise 500 rupees and 1000 currency notes, which made up for 86 % of currency in
circulation. Although initially Modi and his government sold this to move as surgical Strike on
black money or untaxed wealth the narrative has since shifted to transforming India into a
cashless economy.
Last demonetization is done in 1978 where the bank was only way to make all kind transaction
but now we are well adapted with technology to support the cash and cashless transaction
Government encouraging online banking online shopping is E-wallet, mobile banking, credit
and debit cards. The intention behind demonetization was to control the black money under to
increase E-transaction in the country.

WHAT IS DEMONETIZATION:

Demonetisation is a radical monetary step in which currency units status as a legal tender is
declared invalid. This is usually done whenever there is a change of national currency replacing
the old unit with a new one.

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DEMONETIZATION OF 1978:

The governments move to demonetize, even then, was to solve the issue of Black Money,
which were quite major issues at the point of time. In January 1978 the Indian government
demonetized rupees 2000, 5000 and 10000 notes the rule implemented under the high
demonetization act 1978 under the law demonetisation bank notes clasecl to be legal tender
after 16 January 1978. A week time is given to exchange any high demonetization note.
Compare both demonetization is main difference between then and now is that currency of
higher demonetization was barely in circulation online the rupees 500 and 2000 notes today.
Due to demonetization E-banking takes a major role. The consumers switch to cashless
transactions.

E-BANKING:

Online banking is also known as Internet banking (or)virtual banking is an electronic payment
any uses with use of personal computer and a browser can get connected to his banks websites
to perform any of the virtual banking function the term E-banking electronic banking covers
both computer and mobile. When the customer decide to make payment through E - banking.
The customer needs to register with particulars instructions and setup password and other
credential for customer verification.
Scenario of E-Banking after demonetization in India After demonetisation the E-banking a
major role E-banking become a essential component to improve economical growth now
Bank of India recently implemented cashless withdrawal service. This concept helps to
customer to send money through ATM.
The government implemented 24*7 service basis in India and provides integrated delivery
channels like Internet. Due to demonetization, this will replace the traditional clearing system.

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HOW DEMONETIZATION EFFECT ON ELECTRONIC
PAYMENT:

The Indian government wants to go cashless transaction. Due to that online transaction where
done through use of debit and credit cards. They are many options to cashless transaction
available in India they are,

1. Plastic money

It includes debit and credit cards that are used at ATM for cash withdrawal and POS
machines are used at the time of shopping.

2. Aadhaar card

It leads to make payment through use Aadhaar number. It allows a person to pay using his
account if it is linked with his bank account when you have an account in bank you can make
payment through use of your fingerprints.

3.E-Wallet

E wallet paying major role and become a popular nowadays after demonetization E-Wallet has
been used large scale. E-Wallet allows users to make payment through use of mobile number
(or) QR code.

4.UPI ( unified payment interface)

UPI enables all bank accounts holders to send and receive money from their smartphones with
the need to enter bank account information.

Due to demonetization people turn to cash transaction into cashless transaction the use
of cards options such as debit and credit cards, IMPS, Paytm, mobile wallets etc,..

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BENEFITS OF USING E - BANKING
The operating cost per unit services is lower function to the bank.
It offers convenience to as they are not required to go the banks premises.
Lower handling cost.

BENEFITS TO CUSTOMER
E banking helps as a less waiting time.
It easy and convenient to use.
It provides 247 service.
E-Banking saves time.
It unable to help make transaction at any time of the day and as many times as you want.

BENEFITS TO BANKS
It improves customer relation with banks.
It helps to cost effective to increase profitability.
E-Banking helps as a reduction of burden to branch banking.

FEATURES OF E BANKING
Easy electronic fund transfer facility.
E-Banking brings door step service.
It can be to view balance of account and statements.
Its a better efficiency in CRM.

CHALLENGES:
1. Security and privacy risk: - a large number of users refuse to adopt e banking facility due to
securities privacy risk.
2. Consumer awareness: - in India the use does not have on e banking in India still lower
awareness.
3. Less Internet connections: -available in Indian context.
4. E banking the main challenge in infrastructure risk. 5. Challenge to E-Banking through social
and cultural barriers.

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CONCLUSION:
The demonetization undertaken by the Indian government in a large concern. Due to
that the public turns to cashless transaction that is Internet banking. It reaches High success
rates through co-ordination. Its like two faces of coin become of one side it will be benefit to
Nation and other side its going towards digital economy may bring the transparency in the
system. Internet banking brings easy and convenient service people develop the ability to use
E - banking but the same time at the earlier time the people affected in this changes people are
facing problems because the limit of withdrawal has not been kept at the high level it difficult
to adapt illiterate people but even all these difficulties overcome and make the banking
transactions effectively due to this implementation increase Internet users and also initiative
taken by government Agencies to make the India developed in future.

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 RECENT TREND HELPFUL FOR BEING A CASHLESS
SOCIETY IN INDIA.

VISA PAYWAVE:

Visa PayWave is the latest in secure, contactless technology. It will help you spend less time
at the cash counter and give you the freedom to do the things that matter most to you.

In September 2007, Visa introduced Visa PayWave, a contactless payment technology feature
that allows cardholders to wave their card in front of contactless payment terminals without the
need to physically swipe or insert the card into a point-of-sale device.[84] This is similar to the
MasterCard Pay Pass service and the American Express Express Pay, with both using RFID
technology. All three use the same symbol as shown on the right.

In Europe, Visa has introduced the V Pay card, which is a chip-only and PIN-only debit card.
In Australia, take up has been the highest in the world, with more than 50% of in store Visa
transactions now made via Visa PayWave.

It's easy and convenient

For transactions under 2,000, just wave to pay using your Visa PayWave contactless card at
a Visa PayWave card machine and there's no need for a signature or PIN. Visa PayWave is
accepted at India's leading merchants like Big Bazaar and Vishal Mega Mart. Shopping for
everyday items has never been easier.

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Safe and secure

Visa PayWave contactless cards are as secure as any other Visa chip card. They carry the same
multiple layers of security, which ensures that you are safe from fraudulent or unauthorised
transactions.

Visa PayWave cards work when the card is within 4cm of the card reader and the PayWave
terminal can only process one transaction at a time. Because your Visa PayWave card doesn't
leave your hand during the transaction, you remain in control of your card at all times.

SAMSUNG PAY:

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Introducing a better way to pay. Samsung Pay is accepted at more places than any other mobile
payment service out there, from the grocery store to the coffee shop to your favorite department
store. Its secure, easy to set up and simple to use with your latest Samsung Galaxy device.

Samsung Pay App in India:

Features and Benefits

Samsung recently launched its mobile payment service Samsung Pay in India. It has chosen
the right time to launch it in India. Because, due to the government push, Indian people have
started adopting mobile payments. Recently launched BHIM app has become a mode of
cashless transaction. Samsung Pay can also ride in this surge of digital transactions. In this
post, I will introduce you the Samsung Pay. You would also learn positive and negative points
of this payment system.

What is Samsung Pay?

Samsung Pay is basically a digital payment solution. This payment solution works only with
Samsung Smartphone and other devices. It is one of the most popular mobile payment services
in the world. It has been active in global markets like the US, China, Malaysia, Australia,
Singapore and Russia for a long time. And recently, the company launched it in India.

It allows you to pay with your credit or debit cards without using your physical cards. With
Samsung Pay, you do not need to carry your cards. All you need to add your card details in
Samsung Pay app. Through it, you can pay to any POS machine (point of sale machine used in
shops) without swiping or presenting your card. It uses MST and NFC technology to
transmit your card details to POS machines. These technologies transmits your card details
from phone to swipe machine. It is similar to the physical card swipe.

In India, you can not only pay with your cards but also with your Paytm wallet. Samsung has
integrated Paytm in it to make it more convenient for users. To with Paytm, you need to add
your Paytm account with it. The company is also working to provide UPI integration with
Samsung Pay. It will be integrated in few weeks and then you will be able to make account-to-
account payments.

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How does Samsung Pay work?

As I have already told you, Samsung Pay uses NFC (Near Field Communication) and MST
(Magnetic Secure Transmission) to transmit your card details. In India, most of the older POS
machines rely on the magnetic signal from physical cards. Hence, having MST support allows
Samsung Pay to work with these swipe machines as well as newer NFC supported machines.

It securely stores your card details within your smartphone when you add a card. You can add
more than one cards in Samsung Pay. To pay money, you need to open the app and choose a
card to pay. The app will then ask for the fingerprint or PIN, based on your preference. Scan
your fingerprint or enter PIN and take the phone close to the swipe machine. Samsung Pay will
transmit the card details to the swipe machine. Swipe machine will then ask for the amount and
PIN. Note that this PIN is your debit/credit card PIN. Enter it carefully and your Payment will
be completed.

You can use Samsung Pay at every shop which has a swipe machine. Thanks to its MST
support, you can use it to older card swipe machines. Note that older Indian swipe machines
do not have NFC supports. Instead, they use magnetic signals to read cards. It mimics the
magnetic signal of a card with MST. The machine thinks that a card has been swiped and it
gets the details via MST. The process of Samsung Pay is as easy as it could get.

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Samsung Pay supported devices

As Samsung Pay is launched recently, it supports very few devices. These are mainly higher
mid-range and flagship devices from Samsung. But the company clarifies that this app will be
available in its future smartphones. The current devices which support this app are as follows.

Galaxy S7 edge
Galaxy S7
Galaxy Note 5
Galaxy S6 edge+
Galaxy A7 (2017)
Galaxy A5 (2017)
Galaxy A7 (2016)
Galaxy A5 (2016)

Some rumours are indicating that it will also be available for Samsung J series smartphones.
Note that Samsung J series contains entry-level to mid-level smartphones from Samsung. It
includes some of the best-selling phones such as Galaxy J5, J7, J7 Prime etc. If it happens, the
reach of Samsung Pay will significantly increase.

Steps set up Samsung Pay

1. You need a supported phone and a stable internet connection.

2. To use Samsung Pay, you also need a Samsung ID and password. You can get these by
registering for Samsung account.
3. Also, dont forget to add your Samsung account to your phone. Go
to settings>>Accounts>>Add account.
4. Ensure that your phone is running on latest software. You can check and install updates
from settings>>About Phone>>Software Updates.
5. If your device is in the above list and running on latest software. Then you will see an
icon for Samsung Pay. Tap this icon and install it on your phone.
6. Complete one-time registration using Samsung ID and password. Register your
fingerprint for maximum security. You can also use only the PIN for security.
7. Now, add your cards and enjoy making payments with it.

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Which cards work with Samsung Pay?

Company Credit Card Debit Card

Standard Chartered

ICICI Bank

HDFC Bank

Axis Bank

American Express

State Bank of India

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Citibank

Currently, it supports cards from some of the major banks in India. It also supports American
Express credit cards. The company is working day and night to provide support for more cards.
The list of supported cards are as follows.

In addition to these cards, you can also use Paytm for mobile wallet payments using Samsung
Pay. Paytm is one of the widely used mobile wallets in India. Hence, adding it with Samsung
Pay is a good step by the company. UPI (Unified Payment Interface) integration is also in
process.

Pros and Cons of Samsung Pay:

Pros

One of the main pros of Samsung Pay is its MST support. It takes Samsung Pay on top of its
main rivals Android Pay and Apple Pay. Moreover, the security of the Samsung Pay is also the
main USP. It stores all your card details on your phone. So, no one can get your card details.

Also, no one can use your card without the fingerprint or PIN which you set. That is why I
suggest you add your fingerprint or a strong PIN for security. Further, if you change your
phone, the card details will not be synced with the new phone. You will have to set the security
and add the cards again in the new phone.

Samsung Pay is convenient and faster mobile payment solution. It already has Paytm
integration and UPI integration is also on its way. Hence, you will be able to make payments
almost everywhere.

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Cons

Nothing can be all good and so as the Samsung Pay. The major drawback with Samsung Pay
is that it supports only a few devices. And those devices considered as somewhat expensive in
India. If the company releases it for its J series Android smartphones then it will be good for
the company as well as Indian consumers.

The card support is also quite limited as of now. Debit cards for State Bank of India are not yet
supported. Note that SBI is the largest bank in India. Hence, Samsung should provide the
support for debit cards from SBI. Also, some major banks like Bank of Baroda and Bank of
India are also missing from the list.

Samsung Pay seems promising as it does not require a physical card. However, the BHIM
Aadhaar Pay can be more revolutionizing than it. It does not even require a phone. Your
fingerprint is sufficient for payment.

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APPLE PAY:

Apple Pay is a mobile payments service that allows users to make payments in person, in iOS
apps, and on the web. It digitizes and can replace a credit or debit card chip and PIN or magnetic
stripe transaction at a contactless-capable point-of-sale terminal. It is very similar to contactless
payments already used in many countries, with the addition of two-factor authentication via
Touch ID, PIN, or passcode. The service lets Apple devices wirelessly communicate with point
of sale systems by using a near field communication (NFC) antenna, a "dedicated chip that
stores encrypted payment information" (known as the Secure Element), and Apple's Touch ID
and Wallet.

DEVICE COMPABILITY:

The service is compatible with the iPhone 6, 6 Plus, iPhone 6S, 6S Plus, 7, 7 Plus, iPhone SE,
iPad Air 2, iPad Pro and the Apple Watch. Users with iPhone 5, 5C, 5S, 6, 6 Plus, 6S, 6S Plus,
7, 7 Plus and iPhone SE can use the service through an Apple Watch, though it lacks Touch ID
security. Instead, Apple Pay is activated with a passcode and will remain active for as long as
the user wears the Apple Watch.

TECHNOLOGY:

Apple Pay uses the EMV Payment Tokenisation Specification.

The service keeps customer payment information private from the retailer by replacing the
customer's credit or debit card Primary Account Number (PAN) with a tokenized Device
Account Number (DAN), and creates a "dynamic security code [...] generated for each

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transaction". The 'dynamic security code' is the cryptogram in an EMV-mode transaction, and
the Dynamic Card Verification Value (DCVV) in a magnetic stripe data emulation-mode
transaction. Apple added that they would not track usage, which would stay between the
customers, the vendors, and the banks. Users can also remotely halt the service on a lost phone
via the Find My iPhone service.

To pay at points of sale, users hold their authenticated Apple device to the point of sale system.
iPhone users authenticate by holding their fingerprint to the phone's Touch ID sensor, whereas
Apple Watch users authenticate by double clicking a button on the device. To pay in supported
iOS apps, users choose Apple Pay as their payment method and authenticate with Touch ID.
Users can add payment cards to the service in any of three ways: through their iTunes accounts,
by taking a photo of the card, or by entering the card information manually.

2016

On August 18, 2016, Apple announced it has added Apple Pay support for customers of
Yorkshire Bank and Clydesdale Bank in the United Kingdom.

On August 29, 2016, ANZ Expanded their support for Apple Pay to support MasterCard
holders in Australia.

On September 7, 2016, Apple announced that iPhone 7 and Apple Watch Series 2 users in
Japan can now add both local credit cards and FeliCa cards to their Apple Pay wallets. As of
now, only Suica cards are supported by Apple Pay, which now can be used at subway stations,

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convenience stores, etc., just like regular Suica cards. Apple Pay also supports payment via all
Quick Pay enabled terminals that are already popular in Japan.

Taiwan's Financial Supervisory Commission began accepting applications from the country's
banks offering Apple Pay to their customers on September 28, 2016. This includes the banks;
CTBC Bank, Cathay, United Commercial Bank, E.SUN Commercial Bank, and Taishin
International Bank.

On October 13, 2016, Apple Pay rolled-out in New Zealand, available to customers with Visa
credit or debit cards issued by ANZ Bank New Zealand.

On December 1, 2016 Apple Pay started operating in Spain available to customers with cards
issued by American Express, Banco Santander, Ticket Restaurant and Carrefour.

2017

On January 28, 2017 Credibanco and Redeban Multicolor enabled contactless payments such
as Apple Pay; it was available by virtual prepaid card service like Boon Payment by Wirecard,
Square Cash by Squareup and Yandex Money. Also Apple Pay enabled bank cards are
accepted.

On March 7, 2017, Ulster Bank and KBC Bank Ireland became the first banks in Republic of
Ireland to launch Apple Pay.

On March 29, 2017 Apple Pay launched in Taiwan with 7 banks.

On May 17, 2017 Apple Pay launched in Italy (including San Marino and Vatican City) with
boon., Unicredit and Carrefour Bank, also introducing support for Mastercard's Maestro and
Visa's VPay, not available to use with Apple Pay in other countries.

On May 18, 2017 Apple Pay expanded in Ireland to include bank Allied Irish Bank.

Currently this feature is not been released in India.

Page | 51
ANDROID PAY:

Android Pay is a digital wallet platform developed by Google to power in-app and tap-to-pay
purchases on mobile devices, enabling users to make payments with Android phones, tablets
or watches. Android Pay uses near field communication (NFC) to transmit card information
facilitating funds transfer to the retailer. It replaces the credit or debit card chip and PIN or
magnetic stripe transaction at point-of-sale terminals by allowing the user to upload these in
the Android Pay wallet. It is similar to contactless payments already used in many countries,
with the addition of two-factor authentication. The service lets Android devices wirelessly
communicate with point of sale systems using a near field communication (NFC) antenna, host-
based card emulation (HCE), and Android's security.

Android Pay takes advantage of physical authentications such as fingerprint ID where

available. On devices without fingerprint ID, Android Pay is activated with a passcode. When
the user makes a payment to a merchant, Android Pay does not send the credit or debit card
number with the payment. Instead it generates a virtual account number representing the user's
account information. This service keeps customer payment information private, sending a one-
time security code instead of the card or user details.

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Users can add payment cards to the service by taking a photo of the card, or by entering the
card information manually. To pay at points of sale, users hold their authenticated device to
the point of sale system. The service has smart-authentication, allowing the system to detect
when the device is considered secure (for instance if unlocked in the last five minutes) and
challenge if necessary for unlock information. Spring CEO Alan Tisch said Android Pay
improves mobile shopping business by supporting a "buy button" powered by Android Pay
integrated within vendor's creative design.

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LG PAY:

LG Pay is a mobile payment and digital wallet service by LG Electronics that lets users make
payments using compatible phones and in the future are other LG-produced devices. The
service supports contactless payments using near-field communications, but also incorporates
wireless magnetic communication that allows contactless payments to be used on payment
terminals that only support magnetic stripe and normal contactless cards.[1]

The service was launched in South Korea on June 02, 2017 and is awaiting confirmation if it
would be launched overseas.

Service

LG Pay was developed from the intellectual property of Dynamics and has announced plans
since November 2015. The service supports both NFC-based mobile payment systems (which
are prioritized when support is detected), as well as those that only support magnetic stripes.
This is accomplished via technology known as "Wireless Magnetic Communication" (WMC),
which transmits card data to a payment terminal's swipe slot via emitting wireless magnetic
data pulses, causing the terminal to register it as if it were a normal magnetic stripe. [1]

In South Korea, LG Pay can be used for online store payments, transportation card payments,
membership cards, and to withdraw money on selected banks' ATMs.[2]

Page | 54
Security

LG Pay's security measures are based on LG Mobile and South Korean card companies such
as Shinhan Card technologies; credit card information is stored in a secure token. Payments
must be authenticated using either a one-time password, fingerprint scan, or later on using 3D
Facial Recognition .[3][4]

Availability

Date Support for payment cards issued in

June 02, 2017 South Korea

In 2016, it was reported that LG was developing a white-card system that stores all card info
of different banks/companies under one physical card that looks akin to a regular credit card.
As of the launch, there are no further updates if such system would still push through.[6]

Compatible devices
Flagship smartphones

G-series

LG G6 (including G6+ and Pro)

Page | 55
MICROSOFT WALLET:

Microsoft Wallet was launched on June 21, 2016 in the United States. It was initially released
to participants of Microsoft's Windows Insider program and was later made available to the
general public on August 16, 2016 with the release of the Windows 10 Mobile Anniversary
Update. The service was launched exclusively to Windows 10 Mobile in conjunction with an
update to Microsoft's Wallet app.

The launch of the Microsoft Wallet service established Microsoft's own in-house mobile
payment platform, enabling it to bypass its prior dependencies on third-parties for contactless
payments on Windows-based smartphones. Microsoft's mobile operating system had
previously supported contactless payments for NFC-equipped handsets as early as 2012 in
Windows Phone 8 and the original Wallet app. However, in the prior operating system,
Microsoft depended on third-party intervention to make the payments feasible. Mobile carriers
had to support this by providing secure element SIM cards to customers. Additionally, in the
United States, mobile carriers AT&T, T-Mobile, and Verizon required use of their joint-venture
developed platform, Soft card, to process the payments. When Soft card was purchased (and
subsequently shut down) by Google in early 2015, it left the Windows platform without a viable
contactless payment system in the United States.

SUPPORTED DEVICE.

Microsoft Lumia 950

Microsoft Lumia 950 XL

Microsoft Lumia 650

Page | 56
 CASE STUDY.

Cashless Village in Gujarat, Akodra

If you find yourself craving for biscuit in Akodra Village, located over an hour away from
Ahmedabad, in Sabarkantha district in Gujarat, walk past the village ATM and down to the
little Kirana shop opposite the CCTV monitored aganwadi select your biscuit packet but dont
reach for tour wallet to pay for it instead, whip out your mobile phone to pay dont worry the
grumpy old shopkeeper will give you instruction on how to this; he is used to clueless city
people! He will then look at you with mild suspicion until his mobile phone chimes and informs
him in Gujarati (vernacular language) that the amount has been transferred from your Bank
account to his. Congratulations! Your purchase is now complete, You may now sit in a cool
spot under the big peepal tree and eat your business while surfing Facebook, using the village
Wi-Fi

Welcome to Akodra, a fully digital village. If you wondered in January, during the high-
profile launch of digital Indian meant or would really look like, little Akodra represents a slice
of the vision. The village of 1200 people adopted by ICICI Bank, helped by the local
administration, so that it can be showcased as an example of the Banks vision of the digital
future that awaits Indias hinterland. From the merely cosmetic, like embellishing the archway
at the village entrance with the ICICI Logo, to the very practical improvement of providing
access to modern banking to the villagers, the bankers at ICICI has gone all out to showcase
their vision in Akodra. If some of the interventions, such as installing CCTV Cameras in the

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Village aganwadi and in schools, seems a bit gimmicky, many others and useful potentially
revolutionary when imagined on a large scale across whole districts and regions in the
country.
The first of such useful intervention is financial inclusions and access to modern banking.
Almost every adult in Akodra now has a saving Bank account with ICICI, which he or she can
access through the local bank branch, or the village ATM, or through mobile phone via SMS.
The Villagers most important transaction selling agri-produce at the local Mandi or selling
milk at the co-operative society- have been digitised and made cashless. The system has made
them automatically less susceptible to corruption and fraud, also their accounts are linked to
their Aadhar cards, which means that government benefits are now transferred directly into
their saving accounts. For the widows of Akodra, whom had to earlier spend Rs.70 to travel to
the district headquarters to their monthly pension of Rs.800, this direct transfer and easy access
to their accounts make for real and significant saving.
The second advantage is in the area of education. Earlier, teaching used to be between just the
teacher and the student. Now we have a digital aid, Pranav Upadhyay ,32, high-school teacher in
Akodra, before beginning his lecture on nanotechnology for class 10 students. Earlier when I used to
talk about the universe to the students, it was just a talk. Now they see it animated on the screen and
it gets them interested and more engaged. The digital aid that Mr. Upadhyay is reterring a projector
and a computer. This brings to life lessons in science, chiefly through animation. In Primary school,
children use electronic tablets gifted by ICICI to learn Gujarati.
Therefore, Akodra village has become the first Cashless village in Gujarat, giving a slice of
the future in India.

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 QUESTIONNAIRE.

Basic Information:

Gender: Male. Female.

Age: 18 25yrs. 25 35yrs. 35 50yrs.

Profession: Student. Business. Service.

Government Employee. Other. Specify: -____________

IMPORTANCE IN CASHLESS ECONOMY.

1) Is Cashless Economy secured?

Yes.
No.

2) Being an economy cashless is the biggest parameter of being developed.

a) Strongly Agree.
b) Agree.
c) Neither Agree nor Disagree.
d) Disagree.
e) Strongly Disagree.

3) The Banking Sector is making Rich People Richer and Poor People Poorer.
a) Strongly Agree.
b) Agree.
c) Neither Agree nor Disagree.
d) Disagree.
e) Strongly Disagree.

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4) Cashless Economy decrease the value of money.
a) Strongly Agree.
b) Agree.
c) Neither Agree nor Disagree.
d) Disagree.
e) Strongly Disagree.

5) Cashless transaction is only the factor which gives smooth functioning of any business.
a) Yes / No.
b) Simple / Difficult.
c) Good / Bad.
d) Important / Unimportant.

6) According to you which is the most convenient way of payment.

a) Cash.
b) Card.
c) Both.

7) Which mode of transaction you mostly prefer.

a) Cash.
b) Card.
c) Both.

8) How do you prefer to pay your utility bills?

a) Cash.
b) Card.
c) Both.

9) Which mode of payment you consider more reliable and secure.

a) Cash.
b) Card.

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10) Which can be carried and kept and has more life.
a) Cash.
b) Card.

11) While travelling, according to you which is the preferred way of payment.
a) Cash.
b) Card.

12) Do you feel there should be a cashless society in future?

a) Yes.
b) No.

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 SAMPLING, DATA COLLECTION AND TOOLS OF
ANALYSIS.
SAMPLING DESIGN:
Sampling is a method of selecting experimental units from a population so that we can make
decision about the population. Total samples used for this study will be 150. A sample of 150
Respondents from selected part of Mumbai will be conducted for this study.

DATA COLLECTION:
In order to reach the objectives, descriptive research was conducted using questionnaire. The
Survey was conducted among 150 Respondents in Mumbai region. All Questions were Open
Ended and all the questions were compulsory for respondent.

DATA ANALYSIS:

1. GENDER:
RESPONSE. NO OF RESPONDENT. PERCENTAGE.
MALE 85 56.70%
FEMALE 65 43.30%

Gender

Female
Female
Male 65
85 43.30%
56.70% Male

DATA INTERPRETATION:

The above data shows that out of 150 respondents 56.70% are male and 43.30% are female.

Page | 62
It means 85 people are the male population with respect to gender and 65 people are female
population.
2. AGE GROUP:

RESPONSE NO OF RESPONSES PERCENTAGE

18 25yrs 106 70%
25 35yrs 40 27%
35 50yrs 4 3%

AGE GROUP
35 - 50yrs
25 - 35yrs 3%
27%
18 - 25yrs
70%

18 - 25yrs 25 - 35yrs 35 - 50yrs

DATA INTERPRETATION:

Above data shows that 70% people lies from the age group between 18-25 which means that
majority of the people are youth which results in 106 responses from them.
27% people lies from the age group of 25-35 who are middle-aged which results in 40
responses.
In the age group of 35-50, only 3% people are there which results in 4 responses from people.

Page | 63
3. PROFESSION:

RESPONSE NO OF RESPONDENT PERCENTAGE

STUDENT 108 72%
BUSINESS 10 7%
SERVICE 16 10%
GOVERNMENT EMPLOYEE 7 5%
OTHER 9 6%

PROFESSION
Government Other
Employee 6%
Service5%
10%
Business
7%

Student
72%

DATA INTERPRETATION:
The above data shows that among all the respondent the highest responses comes from the
Student that is 72% and then the people who do Services that is 10% and Business that is 7%
it includes the respondent who are doing their own Business and Other that is 6% it includes
Doctor, Professor etc and Government Employee 5%.

Page | 64
IMPORTANCE IN CASHLESS ECONOMY.
(150 RESPONDENT)

1. IS CASHLESS ECONOMY SECURED?

RESPONSE RESPONDENT PERCENTAGE

YES 129 86%
NO 21 14%

security.

14%

86%

Yes NO

DATA INTERPRETATION:

86% people consider that cashless / paperless economy is secured & 14% people dont consider
secured cashless economy.

Page | 65
2. BEING AN ECONOMY CASHLESS IS THE BIGGEST PARAMETER OF BEING
DEVELOPMENT?

RESPONSE RESPONDENT PERCENTAGE

STRONGLY AGREE 96 64%
AGREE 32 21.30%
NEITHER AGREE NOR DISAGREE 15 10%
DISAGREE 7 4.70%
STRONGLY DISAGREE 0 0%

BEING AN ECONOMY CASHLESS IS THE BIGGEST

PARAMETER OF BEING DEVELOPED.

4.70%
10%
Strongly Agree
21.30%
64% Agree

Neither Agree Nor Disagree

Disagree

Strongly Disagree

DATA INTERPRETATION:

Cashless transaction in economic deployment.

64% people strongly agree that while doing cashless transaction economy will develop. 21.30%
people only agree that economy will develop by going cashless. 10% people are neither agree
nor disagree by doing cashless transaction. 4.70% people disagrees that economy will not
develop by doing cashless transaction and only 0% people strongly disagrees that economy
will not develop by going cashless.

Page | 66
3. THE BANKING SECTOR IS MAKING RICH PEOPLE RICHER AND POOR
PEOPLE POORER?

RESPONSE RESPONDENT PERCENTAGE

STRONGLY AGREE 20 13%
AGREE 46 31%
NEITHER AGREE NOR DISAGREE 63 42%
DISAGREE 16 11%
STRONGLY DISAGREE 5 3%

BANKING SECTOR

3% 13%
11%

31%

42%

Strongly Agree Agree Neither Agree Nor Disagree Disagree Strpngly Disagree

DATA INTERPRETATION:

In the above pie graph it shows that 13% people Strongly Agree that Banking Sector is making
Rich People Richer & Poor People Poorer followed by 31% people Agree to the above
statement, 42% people Neither Agree Nor Disagree & 11% people Disagreed only 3% people
strongly Disagree to the above statement.

Page | 67
4. CASHLESS ECONOMY DECREASES THE VALUE OF MONEY?

RESPONSE RESPONDENT PERCENTAGE

STRONGLY AGREE 33 22%
AGREE 84 56%
NEITHER AGREE NOR DISAGREE 17 11%
DISAGREE 10 7%
STRONGLY DISAGREE 6 4%

VALUE OF MONEY.

4%
7%
22%
11%
Strongly Agree
Agree
Neither Agree Nor Disagree
Disagree
56%
Strongly Disagree

DATA INTERPRETATION:

The above pie graph shows that 56% people are Agreed that the Cashless Economy is
decreasing the value of money followed by 22% people Strongly Agrees, 11% people fall in
category of Neither Agree Nor Disagree. 7% people Disagree to the above statement & 4%
people Strongly Disagree they think that going Cashless will not decrease the value of money.

Page | 68
5. CASHLESS TRANSACTION IS THE ONLY FACTOR WHICH GIVES SMOOTH
FUNCTIONING OF ANY ECONOMY.

RESPONSE RESPONDENT PERCENTAGE

YES / NO 77 51%
SIMPLE / DIFFICULT 25 17%
GOOD / BAD 46 31%
IMPORTANT / UNIMPORTANT 2 1%

CASHLESS TRANSACTION IS THE ONLY

FACTOR WHICH GIVES SMOOTH
FUNCTIONING OF ANY ECONOMY.
1%

31%
51%

17%

Yes / No Simple / Difficult Good / Bad Important / Unimportant

DATA INTERPRETATION:

In the above data it shows 51% people says Yes / No that Cashless Transaction is the only
factor for smooth functioning, 31% says Good / Bad about the Cashless Transaction, followed
by 17% people consider it as Simple / Difficult & 1% people consider it as Important /
Unimportant.

Page | 69
6. ACCORDING TO YOU WHICH IS THE MOST CONVENIENT WAY OF
PAYMENT.

RESPONSE RESPONDENT PERCENTAGE

CASH 30 20%
CARD 93 62%
BOTH 27 18%

Different ways of payment.

18% 20%

Cash
Card

62% Both

DATA INTERPRETATION:

Above diagram shows that 20% people use Cash as a way of payment Followed by 62% people
make their payment through Card they consider it as more secure than that of cash transaction
& 18% people uses both payment method to make transaction.

Page | 70
7. WHICH MODE OF TRANSACTION YOU MOSTLY PREFER.

RESPONSE RESPONDENT PERCENTAGE

CASH 32 21%
CARD 67 45%
BOTH 51 34%

MOST CONVENINENT WAY OF

PAYMENT.

Both Cash
34% 21%

Card
45%

DATA INTERPRETATION:

The above graph shows that 21% people prefer Cash transaction because they think that they
may lose extra money while making card payment while 45% people prefer to make Card
payment because it is the most easy and convenient way of payment while making Card
transaction we get each and every record that what we had purchased & the remaining 34% of
the respondent uses both mode of payment.

Page | 71
8. HOW DO YOU PREFER TO PAY YPUR UTILITY BILLS?

RESPONSE RESPONDENT PERCENTAGE

CASH 31 21%
CARD 32 21%
BOTH 87 58%

PAYMENT OF UTILITY BILLS?

Cash
21%

Both
58% Card
21%

Cash Card Both

DATA INTERPRETATION:

The above data shows that 21% people pay their utility bill through Cash, 21% people pays
their utility bill through card and the remaining 58% people consider both mode of payment.

Page | 72
9. WHICH MODE OF PAYMENT YOU CONSIDER MORE RELIABLE AND
SECURE.

RESPONSE RESPONDENT PERCENTAGE

CASH 45 30%
CARD 105 70%

SAFEEST PAYMENT MODE.

30%

Cash
70% Card

DATA INTERPRETATION:

The above data shows that 70% people make their payment through Card because it is the most
easy and convenient way of payment while 30% people make their payment through Cash
because they think payment of hard Cash is more safest than that of Card payment.

Page | 73
10. WHICH CAN BE CARRIED AND KEPT AND HAS MORE LIFE.

RESPONSE RESPONDENT PERCENTAGE

CASH 35 23%
CARD 115 77%

WHICH CAN BE CARRIED AND KEPT AND

HAS MORE LIFE.
Cash
23%

Card
77%

DATA INTERPRETATION:

23% people consider that Cash can be carried easily as it has more life while 77% people
consider that Card has higher life it can be carried easily. Card can be carried easily if the card
is lost the money will be secured but if the Cash is lost it is gone. Therefore Card has more life
and it can be carried easily.

Page | 74
11. WHILE TRAVELLING ACCORDING TO YOU WHICH IS THE PREFERRED WAY
OF PAYMENT.

RESPONSE RESPONDENT PERCENTAGE

CASH 46 31%
CARD 104 69%

PREFFERED WAY OF PAYMENT WHILE

TRAVELLING.

31%

Cash
69% Card

DATA INTERPRETATION:

The above data shows that while travelling 69% people uses Card as the mode of payment
because it is more secure while 31% people uses Cash as a mode of payment.

Page | 75
12. DO YOU THINK THERE SHOULD BE A CASHLESS SOCIETY IN FUTURE?

RESPONSE RESPONDENT PERCENTAGE

YES 114 24%
NO 36 76%

Do you think there should be a cashless society in

future?

24%

Yes
76% No

DATA INTERPRETATION:

Above data shows that 76% people says Yes that there should be a Cashless Society in future
as it will help the Economy While 24% people says No that there should not be a Cashless
Society in future

Page | 76
 CONCLUSION.
From the above content we have studied that the establishment of Bank took place way back
before and after that many innovations took place which has smoothen the bank functioning,
operations and also leads to economic development which has given rise to Innovations such
as Mechanisation, Automation, New Millennium, Mobile Wallets, Banking on the drive, Bank
on your wrist, Robotics Video, Banking (or) Virtual Reality which changed the working of
bank completely.
While the only primary function of bank was to deal in lending and borrowing of money. Now
those function has changed into technical system and had added several different functions i.e.
handling their clients account, maintain deposits, online payments of electricity bill etc, giving
advances, providing loans and long term funds, act as finance insolvent firm, takeover and
merger and amalgamation.
This gave rise to Cashless Economy because of which each transaction now take place through
electronic form though many people especially in the rural side are now aware about the
Cashless Economy.
Though in the initial stage people have not accepting to do transaction online. But after
demonetization of the currency on 8th November 2016. Which is a great step taken by RBI and
Government to make India a Cashless Economy. After Demonetization there has been high
growth in cashless transaction.
Specially a Village in Gujarat named Akodara has been fully digitalized. Not a single person
is using cash. All the transaction has been taken place through Electronic Mode of Payment.
Because of technological improvement online transaction now are much more secure and safe.
Online purchase or sale of product or thing gives us much more benefit than that of going in a
shopping mall and purchasing it. While doing online transaction we get a great discount, cash
back, gift voucher etc.
The latest technological trend which is helpful for making online payment more easily are Visa
Paywave, Samsung Pay, Paytm etc.
Therefore, Banking Innovation is also much more important for safe and secure Cashless
Transaction.

Page | 77
 BIBLIOGRAPHY.

file:///E:/Online/wp1707.pdf
http://www.investopedia.com/university/banking-system/
http://shodhganga.inflibnet.ac.in/bitstream/10603/2031/10/10_chapter%201.
pdf
http://www.yourarticlelibrary.com/banking/the-history-of-banking-sector-in-
india-256-words/7532/
http://kalyan-city.blogspot.in/2011/02/what-is-bank-introduction-
definition.html
https://www.visa.co.in/pay-with-visa/featured-technologies/visa-paywave.html
https://upipayments.co.in/samsung-pay-india/
https://upipayments.co.in/samsung-pay-india/
http://www.civilsdaily.com/story/cashless-society/
http://moneyconnexion.com/cashless-economy.htm
http://www.iosrjournals.org/iosr-jbm/papers/Vol19-issue4/Version-
2/O190402116120.pdf
https://www.ijser.org/researchpaper/Impact-Of-Demonetization-In-E-
Banking.pdf

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