2

Findings: there are many benefits that are relaed directly or indirectly to the India’s economy with the use of
cashless transactions in the market. The direct benefits include 1) Cost of printing money: Printing money is the
direct cost that effects the bank( Reserve Bank Of India). In the cash system of economy where maximum people
will work on the cash transaction, government has to produce more and more cash notes. Printing notes it is a
costly affair. Data from a Right to Information answer by the RBI in 2012 shows that it costs Rs. 2.50 to print each
Rs. 500 denomination note, and Rs. 3.17 to print a Rs. 1,000 note. From April 1994 to June 2016, currency has
shown a yearly growth rate of 17%, while the share of bank currency has remained around 5%.2 It was estimated
that, for 2009–2010, RBI incurred an annual cost of INR 2800 Crores for printing currency notes (Das and Agarwal
2010). As per the new declaration of demonetization by Modi it has cost the nation an additional burden of 12000
Crore on the exchequer. 2) Maintenance Cost: Other than printing cost of the currency notes there are many other
expenses that RBI and government has to do. Another important aspect is the maintenance in the form of storage
of notes, transportation of the notes to the distant places, security of the notes, and devices for the detection of
counterfeit notes. The other major aspect of the maintenance is that the distribution of money through ATM
machines at the different locations. It is reported that all this maintainance cost the government about 5% of the
GDP of India. In nutshell we can save somewhere around 500 crores by this mean only. 3) Eradication of the
corruption: going cashless is going to eradicate the corruption to some extent. The direct transactions of the
money cannot take place easily. These transactions will be simple easy and transparent which in turn will show in
the accounts of the senders and the receivers. This cashless economy is going to hit the corruption in a very
planned way from the government offices. This is again going to save enough money in the economy of the
country. 4) Help to Check High Rate Of Organized Crimes, Such As Armed Robbery, Kidnapping Terrorist Activities
And Money Laundering: It is a well known fact that the criminal underworld usually requires huge volumes of cash
to carry out their nefarious operations in order to avoid being traced or tracked. Therefore, placing a limit on the
amount of cash flowing in the system, will curtail such activities as armed robbery, kidnapping, drug and gun
running and money laundering. In an environment of extensive and predominant use of cheques and e- payments,
criminal transactions can be easily traceable and tracked. All the terrorist related activities are highly funded by
the cash. The cashless economy helps the government to keep a check on the free flow of cash to the terrorists
and terrorist related activities. 5) Wipe away the black money from the market: it has been observed that many
businessmen start evading the real money. Most of them never show the actual business on paper. This habit of
evading sales has caused a lot of Impact on the tax of the country. Small shopkeepers and big industrialists do this
to save tax. This practice has created a very big problem of loss of tax to the exchequer. The loss of huge money
has lead to the parallel economy in the state that has created a big los not only to the government but towards the
development of the common people’s goal. The presence of cashless economy will definitely lead to the
development of the country by means of collecting surplus taxes and also to spend these taxes for the benefit of
the scheme. Modi in his poll manifesto of 2014 general election has announced that if the government is able to
bring back the black moneey in the mainstream than every Indian will have 15 lakhs of rupees in their accounts
irrespective of their income potential. 6) Installation of formal and pure form of economy: It has been observed
that cashless economy leads to the start of proper formal and functional economy in the country. When all the
transactions are made proper clear clean and taxed, it may lead to the establishment of formal setup of the total
financial system that leads the country towards the development. 7) Stop Leakages: Cashless economy is the best
and one of the few ways in the system to stop leakages of the money by the officials of the government while
distribution money to the beneficiary. The present policy of the linkage of AADHAR or UID NO. by the government
has resolved this issue to the great extent. The direct benefit transfer policy of the government has helped the
identification of the beneficiary on the basis of biometric identity and helps the people to get their dues directly in
their bank accounts. This is again a digital or cashless system of transaction that helps the individual to save time
and money. 8) Decrease the cost of commodity: the cashless economy aims at reducing the cost of the
commodities by setting aside the black market and the proper deposit of the tax. All this leads to the development
of the system where one can find the cost of the commodity going down in the market. The developed economy
like China is the best example for this. Challenges in establishing Cashless economy The above written are some of
the findings that are based on the interviews conducted and the secondary data used in the paper. It is very
important to see the facts that most of the situations and circumstances have posed as big challenge to the
government.
 3

The major challenges that are there to establish the cashless economy are.

1. Financial inclusion: if wesee the present situation of the people I India having bank
accounts, we can see that only sixty percent of the country’s population has bank
accounts. Still large number of people is not having the bank accounts.
Government’s decision on opening the massive bankaccounts under PradhanMantri
Jan DhanYojna has perpetuated this cause of giving every citizen of the country with
the account. More than228 million accounts were opened under PMJDY scheme till
July 2016. Most of these accounts were zero balanced accounts and out of these
many accounts are lying dormant in the bank. People without knowledge of
operating accountsare in no way efficient enough to operate the account. Thereare
several other reasons like lack of money, lackof income, illiteracy and lack of
information to the account holders. 2. Lack of infrastructure: in India there are many
areas where bank is still a distant dream. The remote areas are still not having the
banks at their door step. People have to move to distant places to have their money
transactions in the banks. There are no ATM facilities in the remote areas. Even the
ATM are not fully backup with the electricity and other IT related facilities. It is the
chief concern of the government and the banks to come up with the basic and secure
infrastructure for the banking services. 3. Lack of education:People living in the
remote villages and areas of the country are still not educated enoughand are not
able to operate the banking services effectively. Illiterate people with bank accounts
in the country are not even good enough to fill in the bank forms to deposit and
withdrawal money. They have to take help of the people in the banks to fill in the
forms and get their work done. It has become the prime responsibility of the
government to start a campaign in the form of mission to enable the people to
discharge their duty by themselves. Lack of education and the poor syllabus done in
the schools are the main reasons that they are not able to operate their bank accounts.
Furthermore, illiterate and the people with less exposure to such facilities are not
able to operate the cards. The people are not aware of the security measures of the
PIN number etc. people should be made aware enough so that they can use the basic
banking facilities. 4. Access of technology:technology is thebackbone to this
banking revolution. Technology must be available in all the areas of the country; it
means all the banks at the branch level even in the remote area should have the
access to the technology. The technology must have all the aspects that can help the
individuals to do the things better and effectively. The second major aspect of the
technology is that it should be easily handled and used by the people. It is one of the
major aspect of the banking that the consumer must e ware of the technology and
should be able to use it effectively for the purpose. The people are not aware of the
technology and are not so involved in the useof it. 5. Large number of people to be
covered:As discussed earlier there are large number of people that are to be covered.
Although many accounts are opened during PradhanMantri Jan DhanYojna, but
many of them are lying dormant. Still forty percent of the India’s population are not
having access to the bankand banking services. It needs a proper penetration into the
market to give the services of banking to the people. It is one of the major challenges
 4

for the government to include large number of people in the mainstream. 6.

Unwillingness to join cashless moment:Most of the people due to one reason or the
other are not willing to join the cashless banking solutions. The major reasons are
the sellers are not willing to accept the cards and cheques as the sale through POS
terminals and cheque transactions will be accounted for. The other major aspect is
that the sellers mostly ask for the transaction fee that makes the things more costly.
The only solution to this problem is that if large number of people joins the
revolution of cash less payments by virtue of using debit or credit card it will be
easier for the banks or service provider to lower the transaction fees and adjust to the
normal phenomenon. 7. Uneven profile of the participants:the banks who are
participating in this mission are having uneven status. The national banks and
privatized banks have different priorities and there services are to the some extent
are uneven in this context. As maximum cards are issued by nationalized banks they
have different level of motives. The service mission s missing in private banks and
hence it creates the affair costly 8. Customer awareness is missing:consumers are not
aware about the different aspects of cashless transactions. Service tax, transaction
fee, security of the account all matters should be stressed upon so that consumer gets
awareness and become an effective party to the mission.

Findings and Suggestions The findings of the study show that India in terms of using digital payment
methods is still very poor in comparison to other developed countries in the world. As many countries are
already turned up with their electronic payment system, India is in its initial stage and most of the
population are dependent on cash based transaction because of unavailability of proper internet
connectivity, lack of awareness and knowledge of financial transaction, charges on card payments and un
operational bank accounts. India needs to come up with the new policies of digital transactions. It is
recommended that government should promote their agencies and private sector service providers to
spread financial literacy at a great extend especially in rural areas. Government should provide extra
benefits on digital transaction payments and offer extra incentives or interest rate on cash saving in bank
accounts. At the same time reduction in charges of digital transaction or exemption completely on digital
banking should be offered for few initial years which can be more helpful for speeding up the process of
digitalisation of payments in India.

Conclusions: The objective of this study is to find the challenges and opportunities of cashless economy.
Cashless economy can be achieved by adoption of proper methods of digital payments. It only requires full
proved new financial policies, centralised administrative control, regular monitory attention on the
bankers, government agencies and other private service. Safe and secured services like immediate
certification of payments , clear statement of their accounts, no hidden charges, full control on money,
shorten process of transaction by fulfil of mandatory information . As an overall review, most of the major
developed countries in the world are moving in a very excellent way of cashless economy. A history of
delayed in development in India is too long. Now the time, India should progress in full steam ahead and
create a new legacy. This is time to embrace the cashless economy like other developed countries and we
must make the most of it.

STRENGTHS OF INDIA GOING CASHLESS: A. Planned Strategy Connecting the dots together, first SIT on
black money, then JAN DHAN scheme targeting financial inclusion followed by track on foreign accounts
 5

and money hoarders, then the Income declaration scheme, opportunity to people to declare their wealth,
and finally a blow by demonetizing the economy. B. Financial Inclusion Under the JAM (JAN DHAN,
AADHAAR, MOBILE) trinity, government is focusing on reaching to all the corners of the country and to
every citizen. It was seen with the introduction of PRADHAN MANTRI JAN DHAN YOJNA there was
surprisingly huge rise in the opening of bank accounts by the people around the country. Bank account is
one of the basic requirement for any nation going cashless. India saw a rise in number 21 | P a g e of bank
correspondents and bank branches in the non reachable areas also. Thus this acts as strength for the
economy to go cashless. C. Measures By Government:  Launch of BHIM app for smart phone users based
on Unified Payments Interface has created easy and quick payments system for the digital-haves. 
Launch of Aadhaar Merchant Pay has targeted those not having access to mobile phones thus can make
payments through Aadhaar linked bank accounts.  DIRECT BENEFIT TRANSFER has also helped the people
in achieving digital transaction awareness. 6.2 Weaknesses Being Faced By India  Cash As King: The
currency in circulation in India is far higher that other nations around the world. The ratio of Cash to GDP
ratio is around 12% which indicates large usage of cash in transactions. Cash is one of the biggest
dominating factor of the Indian economy.  Electricity: To go cashless the entire India needs to have an
access of electricity. The hassle free and smooth functioning of cashless economy needs supply of 24x7
electricity, but India is still facing huge load shading in has yet not achieved 100% electrification in rural
areas.  E-Illiteracy: Another hassle India suffers is Illiteracy. Still around 30% of the population needs to
get educated enough to use the internet. Just mere knowledge of reading and ability to write is not
enough for the person to work effectively over the internet. Most of the people having computer
knowledge also don’t know how to use the internet.  Lack of Infrastructure: Going cashless involves need
for card swipe machines at the POS terminals. Either retailers are not able to afford the facility or the
banks do not have the facility of providing such machines which disables the card payment mode
adoption.  Smart Phone Market Still Untapped: The rising concept of e-wallets and making payments
online is only feasible through the smart phones, but Indian population mostly middle income group or
rural population lacks the affordability of smart phones due to shortage of funds and e-illiteracy even
though smart phones are easily available.  Sluggish Economy: Indian economy is going through slow
growth. Being in a sluggish phase has a negative effect on the labor as well as businesses. Furthermore this
negative impact can be seen due to cash crunch due to money being withdrawn from the economy as a
sudden step. 6.3 Opportunities For India Adopting Cashless Concept:  Curbing Black Money: Since cash
economy carries with it parallel economy run by black money holders, with India going cashless can put an
end to this parallel run economy and demonetization is one such step for India to attack the Black money.
 Tax Collection: With digitization and adoption of cashless base the entire money will be operated
through bank accounts thus TAX EVASION and TAX AVOIDANCE would not be seen creating good tax
revenue base for the government. 22 | P a g e  Reduction In Real Estate: The most affected sector with
cash transactions is real estate, so going cashless will make all real estate transactions white in turn
bringing down the inflated prices due to black money.  End of Corruption: Going cashless will end the
system of bribery to a very extent at all levels as bribe through bank accounts would be under proper
check and will make people more alert in performing their duties well.  Savings on Huge Expenditure: RBI
spends around billions of rupees on the activity of currency issuance and management, thus this huge
amount of expenditure can be cut off once India goes cashless.  Impact on Gdp: Cashless status of the
country will not only lay down the growth prospect for economy but also it will boost the GDP of the
country to higher levels.  Higher Cost of Future Crimes: With the cashless economy there will be an
indirect and powerful impact on corrupt practices being carried on by cash.  Balance: Less cash economy
will act as a strong balance between a check on malpractices and also financial operations. 6.4 Threats In
Going Cashless  Security: The major and biggest threat economy faces going cashless in the threat of
security of transactions:  Threat of loss of data base.  Threat to the money in e-wallets.  Threat of
data encryption.  Threat of malwares, viruses to software.  Threat of cyber crimes.  Perception of
Customers: People at a large scale perceives cash to be the most convenient and fastest way of
transacting, thus adopting the digital mode can face resistance from the society.  Earning Faith And Trust:
Country like India which is still in its developing phase faces every day new ups and downs and thus
earning trust and faith of people to adopt the cashless economy is a big hurdle in its growth. VII.
 6

CONCLUSION Every new habit introduced in life needs at least 21 days to get used to and the way Indian
society pay for a thing is a cultural pattern which is hard to change. Though, not impossible, but to achieve
the concept of cashless, the steps needs to be taken in an appropriate manner. Our government tried to
lay a series of steps before announcing demonetization but still somewhere it does seemed as an office act
rather than a field work. In order to go Cashless, the phased implementation could have been worked
upon i.e. choosing few districts or sectors to go cashless rather than sprinkling the idea upon entire
society, or it could have been introduced as a pilot mechanism in few areas for a testing purpose whether
Indian society is ready for such a move or not. If it is 23 | P a g e achieved in coming time, then it is no less
than a biggest achievement of all times, for the country as being on the graph of DEVELOPING status, it
proved its worth among the developed ones.

Conclusion: If we look at the overall scenario of establishing the cashless economy, its benefits and uses
in the present system it can be said that cashless economy is the need of the hour. It has become not only
important but necessary for the country to go cashless for the systematic development in the economy.
This is to be done in a very systematic way some of the initiatives that should be taken are 1. People
should be educated adequately. The use of cards in the ATM should be described to the people so that
they can easily use the card. 2. Proper infrastructure should be developed in the remote areas so that this
facility should be taken to the rural and remote India. 3. People should be made aware so that they can
utilize their money effectively through cashless means. Buyers and sellers both should be made aware
about the benefits of the cashless transactions. By following some of the points it can be said that we can
effectively implement the cashless transactions in the country. It will be better to say that India at this
point of time has to go for less cash economy rather than cash less economy. The continuous march
towards less cash economy will lead to cashless economy in the country. References: http://www.astrid-
online.it/static/upload/worl/world_payments_report_wpr_2016.pdf http://www.astrid-
online.it/static/upload/worl/world_payments_report_wpr_2016.pdf
http://www.thehindu.com/business/Industry/175-million-new-bank-ac-in-india-in-threeyears-world-
bank/article7109166.ece http://www.thehindu.com/business/New-notes-to-cost-RBI-more-than-Rs.-
12000- crore/article16440301.ece Interviews: 1. Singh tejinder, GMSSS, kaimwala Chandigarh, 30th Dec,2

FUTURE PROSPECTS OF CASHLESS PAYMENTS IN INDIA: Smooth, simple and secure payment processes will help to
bring about behavioral changes and faster adoption of digital payments and banking among un-banked segments.
When new players enter the market, each with a slightly different take on the market and with differing business
models, the increased competition will help the environment and offer more options for consumers to choose
from. A larger pie with more players is definitely good for the changing dynamics of the payments industry, which
is still nascent in India. Indian consumption is still dominated by cash, with cards contributing only 5 per cent of
the personal consumption expenditure. In developed countries, 30-50 per cent of spends happen through cards.
So there is huge growth opportunity. The rapid growth of Smartphone’s, Internet penetration and e-commerce is
complementing these; card payment volumes have been growing in excess of 25 per cent y-o-y. We expect this
trend to continue, aided by the continued increase in debit card activation and usage; debit card transactions have
been growing at 31 per cent each year. Intense competition and strategic collaboration among existing and new
market participants like the payments and small banks and wallets will help scale up acceptance and foster more
creativity, innovation and consumer choice. According to him, the future holds exciting times for the payments
industry in India, as all stakeholders and regulatory authorities come together to achieve a “less-cash dependent”
and eventually “cashless” society. The credit card industry in India sees greater acceptance among consumers this
year. According to Worldline India Card Payment Report 2014-15, the credit card base grew at 9.8 per cent in the
past year. Worldline India is a leader in the payment and transactions services in the country. Alternative methods
like mobile wallets and prepaid cash cards accounted for 3 per cent of digital transactions. This industry has been
growing steadily over the past few years. Card transactions, both by debit and credit cards, are on an upward
trajectory. There are interesting dynamics at play in the Indian payments industry.
 7

Impact of Cashless Transaction:- 4.4.1. Business Process-: The impacts of Cashless Transaction on the Business
sector are as following: • Businesses are legally strong. • Proper audit. Not hidden excess liability. • Increase use of
e-payment. • Wallet hold business gets an advantage www.ijcrt.org ©2018 IJCRT | Conference on Recent
Innovations in Emerging Technology & Science, April 6-7, 2018 | ISSN: 2320-2882 by JB Institute of Technology,
Dehradun & IJCRT IJCRTRIETS026| International Journal of Creative Research Thoughts (IJCRT) www.ijcrt.org |Page
154 4.4.2. Education Process-: The impact of Cashless Transaction on the education sector is likely to be minimal.
Some of the foreseeable fallouts of demonetization on the Indian education sector are as following: • The decision
of the central government to withdraw high-value bank notes to curb unaccounted cash will hurt education
institutions that accept donations or capitation fees for admissions. • Accepting and accounting donations will
become difficult because of the demonetization drive. Education sector was not immune to the Indian theory of
'you can buy everything with money'. This move of demonetization will definitely curb this mentality of many in
the country. • Nursery admissions, private education institutions and professional higher education including
medical and engineering are the segments which accept donations widely. For the first time, these segments are
going to feel the impact in a big way. • Private educational institutions take huge of amount of donations in Cash
which is 40% to 50% more than the fees of the course. We expect that demonetization will impact the recipient. •
Admissions in private educational institutions and medical college admissions comes tagged along with donations
without a glitch. The donation in medical colleges is usually more than 100% of the fees. Demonetization will
impact both admissions and also the receipt. • MBBS seats in some colleges go for Rs40 lakh to Rs60 lakh, while
MD seats have a range of Rs 2 crore price tag on it. Similarly, engineering and management stream seats have a
price tag between Rs 2 lakh to Rs 10 lakh each. This move can change the course of expensive education which can
be made more affordable devoid of the capitation fee. 4.4.3. Economic Growth-: The impact of Cashless
Transaction on Economic Growth in India is as following: • According to the Bank, India's growth in the first half of
FY 2017 was underpinned by robust private and public consumption, which offset slowing fixed investment,
subdued industrial activity and lethargic exports. • The medium-term may be liquidity expansion in the banking
system, helping to lower lending rates and lift economic activity," the World Bank noted. 4.4.4. Impact of
Information Technology in cashless economy-: • The impact of Information Technology on in cashless economy in
India is as following: • Because of information technology the cost of bank will reduce that will result in lower
service charges for customers. • Making Transaction is very easy by using information technology. www.ijcrt.org
©2018 IJCRT | Conference on Recent Innovations in Emerging Technology & Science, April 6-7, 2018 | ISSN: 2320-
2882 by JB Institute of Technology, Dehradun & IJCRT IJCRTRIETS026| International Journal of Creative Research
Thoughts (IJCRT) www.ijcrt.org |Page 155 • New IT Technology like biometric are help to do secure and
transparent transaction

Pros of a Cashless Economy

Let us start with advantages 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.
 8

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.

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 don’t 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.
 9

Cons of a Cashless Economy

Well we also have to look other side of the picture.

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.

Rich Vs Poor Debate

The whole debate about cashless economy revolves around rich versus poor.
 10

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.

Recently over 80 people have died because of demonetization. You can imagine the
impact if country decides to go completely cashless.

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

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.

Importance

Pros of a Cashless Economy

Let us start with advantages 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

 11

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.

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 don’t 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.

Cons of a Cashless Economy

Well we also have to look other side of the picture.
 12

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.

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.
 13

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.

Recently over 80 people have died because of demonetization. You can imagine the
impact if country decides to go completely cashless.

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

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.

CHAPTER 1
INTRODUCTION
 14

GENERAL INFORMATION

A transaction that involves the immediate exchange of cash for a good, service or
any asset and the obligation is fulfilled by cash is called Cash Transaction. Cash
transaction refers to when customers pay using physical currency, such as notes
and coins.

A form of liquid funds given by a consumer to a provider of goods or services as

compensation for receiving those products. In most domestic business transactions,
a cash payment will typically be made in the currency of the country where the
transaction takes place, either in paper currency, in coins or in an appropriate
combination
 15

Cash transactions can be the most difficult to account for and record, and the most
necessary. Maintaining control and accountability of cash transactions is a huge
responsibility for a company, and the company's accounting department. Of all the
transactions that take place, cash transactions are the hardest to record and track,
simply because the paper trail generated by a purely cash transaction is virtually
non-existent.

INTRODUCTION

HISTORICAL BACKGROUND

To understand the cashless methods of transactions the researcher will have

a quick overview on cash and its transactions. Money is one the most

important means to fulfil our needs and wants. The means to satisfy our

needs and wants are currencies of different types that are issued by the

governments of a country and then they are exchanged in lieu of products

and services. The money is a developed type of means for day to day

transactions and has emerged from various systems of exchange in human

civilization.

Earlier, there were no currencies but all the important goods and services

were acquired by exchanging other goods and services; this system of

exchange was known as a Barter system. The need for monetary value was
 16

emerged as a psychological assurance to trust each other and to involve an

external body to promise the payment in terms of a promissory note or a

coin, this is the time when currencies or coins came into existence. Ancient

china, India, and Africa started to use cowries and shekels.

The emergence of new technology and need for a global business made the

cashless transactions more popular. There were various methods of cashless

transactions that were frequently used, but due to the economic

advancements the need for other faster and reliable methods has motivated

many entrepreneurs and economist to introduce reliable and easy to use

methods of cashless transaction.

CASHLESS TRANSACTION SYSTEMS

Cashless transaction is a process of buying goods and services against

money where there is no physical currency is involved. The physical

currency is replaced by a number of methods that are powered by digital

information technology and are capable to transfer money from one person’s

bank account to another person’s. All these money transfer

methods have their own, features, qualities, and mechanisms that work together

with other devices or equipments; therefore they are termed as “systems”. 1

As for any trading activity, the issue of safe and reliable money exchange

between transacting parties is also essential. In a cashless environment,

payments take the form of money exchange in an electronic form which

makes it safe and reliable. Merchant sells the goods to customer and

customer pays the price with the help of cashless methods with safety and
 17

reliability where as in offline world the payments are made with cash or

through cheque that may be counterfeited.

There are many reasons behind the people’s choice to do cashless

transactions like convenience, improved and trusted digital technology, need

to acquire things faster and cheaper along with maintaining a track record for

the taxation purposes. The credit and Debit cards were the most common for

cashless transactions in India like other countries but a shift in the demand

and after the historical decision of demonetization taken by the Hon Prime

Minister of India “Mr. Narendra Modi” boosted other methods of cashless

transaction. The shifting paradigm gave a new height to the cashless

transactions in the country and also influenced consumers and their

perception towards these methods of transaction.

As for any trading activity, the issue of safe and reliable money exchange

between transacting parties is also essential. In a cashless environment,

payments take the form of money exchange in an electronic form which

makes it safe and reliable. Merchant sells the goods to customer and

customer pays the price with the help of cashless methods with safety and

reliability where as in offline world the payments are made with cash or

through cheque that may be counterfeited.

There are many reasons behind the people’s choice to do cashless

transactions like convenience, improved and trusted digital technology, need

to acquire things faster and cheaper along with maintaining a track record for

the taxation purposes. The credit and Debit cards were the most common for

cashless transactions in India like other countries but a shift in the demand

and after the historical decision of demonetization taken by the Hon Prime

Minister of India “Mr. Narendra Modi” boosted other methods of cashless

transaction. The shifting paradigm gave a new height to the cashless

transactions in the country and also influenced consumers and their

perception towards these methods of transaction.

METHODS OF CASHLESS TRANSACTION

Clumsy and expensive to handle coins and notes are replaced by efficient

electronic payments initiated by various types of plastic cards that have a

tantalizing prospect for the twenty-first century. There are various cashless

transaction methods such as Credit cards, Debit cards, Bank pre paid cards,

Mobile/E Wallets, ATM money transfers, Internet banking transfers,

 AADHAR Enabled Payment System (AEPS), Unified Payment Interface

(UPI), Cheques, Demand drafts, NEFT & RTGS transfers and, E-cash

coupons.

METHODS OF CASHLESS TRANSACTION AND THEIR BASIC MECHANISM

PAPER BASED METHODS:

 Cheque: A cheque is a negotiable instrument that orders a bank to pay a

specific amount of money from a person's account to the person in whose

name the cheque has been issued. The person writing the cheque, has a

transaction banking account (often called a current, cheque or saving

account) where his money is held. A cheque endorses a digital certificate

to authenticate bank account and it offers great security features. Cheques

are processed online and are governed by the same laws that apply to

other methods of cashless transaction.

 Demand draft: A demand draft is a negotiable instrument issued by a certain

bank.

A demand draft is a negotiable instrument similar to a bill of exchange. A

bank issues a demand draft to a client (drawer), directing another bank

(drawee) or one of its own branches to pay a certain sum to the specified

party (payee). It is used for transferring money from one place to another

with great convenience and safety.

Figure No: 3 Basic Mechanism of a Demand draft

Customer Drawer bank Payee deposits

requests a issues the the demand
Step 1 Step 2 Step
3

Drawee bank checks the

Payee account
manager’s
Step signatures,
Step 4 is debited
security features and digital
5
code

Manual
flow of
informa
tion
ELECTRONIC BASED METHODS:

 Credit card: A credit card is a piece of plastic offered from visa maser

card or any other network which allows paying for a purchase by

borrowing credit from the credit card company. To purchase goods from

merchant who accepts credit card needs to have a credit card reader for

the settlement.

 Debit card: A debit card is a prepaid card and also known as an ATM

card. An individual has to open an account with the issuing bank which

gives debit card with a personal ID Number, when he makes a purchase

he enter his pin number on shop pin pad. When the card is slurped

through the electronic terminal it dials the acquire a banking system

either master card or visa card that validate the pin and finds out from the

issuing bank whether to accept or decline the transaction the customer

can never overspend because the system rejects any transaction which

exceeds the balance in his account.

Customer’s bank server
 E-Wallet (Mobile Wallet): An electronic wallet is a method which is

very useful for frequent online shoppers. It8 is commercially

7 available for

pocket as palm-sized, hand held, and desktop PCs.bank

Merchant‘s It offers
acco a secure,

convenient, and portable tool for online shopping. It stores9 personal and
Receipt is generated in
financial information such as credit cards, passwords and, Pins to
the POS machine

facilitate the credit-card order process.

10
 Figure No: 6 Basic mechanism of a Mobile/E-Wallet transaction

Payment to a merchant by scanning his unique code or

account number

Step 4
Step 3 Step 5
Loads money through debit/credit card or Money transfer from customer’s
Internet banking account

Step 2 Step
6

Sig up using a mobile device Money debited into

merchant’s account
Step 1
Step
7

Customer Confirmation sent

downloads to customer
application
 Internet banking transfer: Online banking transfer is also known as

internet banking, E-banking or Virtual banking transfer. It is an

electronic payment system that enables customers of a bank or any other

financial institution to conduct a range of financial transactions through

the financial institution's website. The online banking system typically

connects to the core banking system operated by a bank to its branch

bankingFirewall
with the help of internet and bank’s own intranet.

Figure No: 7 Basic mechanism of an internet banking transfer

User
confirmation

Bank’s server

Internet Compliance check

Timed access to banking

Checking receiver’s account and

transferring

Transfer complete
 NEFT (National Electronic Funds Transfer): National Electronic

Funds Transfer (NEFT) is a nation-wide payment system facilitating one-

to-one funds transfer. Under this method, individuals, firms and

corporates can electronically transfer funds from any bank branch to any

individual, firm or corporate having an account with any other bank

branch in the country. Even, such individuals who do not have a bank

account (walk-in customers) can also deposit cash at the NEFT-enabled

branches. NEFT is an electronic fund transfer system that operates on a

Deferred Net Settlement (DNS) basis which settles transactions in

batches. In DNS, the settlement takes place with all transactions received

till the particular cut-off time and then these transactions are netted

(payable and receivables).

 RTGS (Real Time Gross Settlement): The acronym 'RTGS' stands for

Real Time Gross Settlement, which can be defined as the continuous

(real-time) settlement of funds transfer individually on an order by order

basis (without netting). 'Real Time'

 means the processing of instructions at the time they are received rather

than at some later time. Gross Settlement means the settlement of funds

transfer instructions occurs individually. Considering that the funds

settlement takes place in the books of the Reserve Bank of India, the

payments are final and irrevocable.

Request by the Customer

remitter

 Aadhaar enabled payment system (AEPS): AEPS is a new cashless

method offered by the National Payments Corporation of India to banks,

and other financial institutions using ‘Aadhaar’ number and online

UIDAI authentication through their respective business correspondent

service centres. Aadhaar Enabled Payment System provides basic

financial services (cash deposit, balance enquiry, cash withdrawal and

remittance) at low cost access devices (called Micro ATMs) maintained

at Business correspondents in an inter-operable way. Aadhaar Enabled

Payment System is a way to get money from the bank account or transfer

cash. This system neither requires the signature nor does need to visit a

bank branch.
 Figure No: 10 Basic mechanism of an Aadhaar enabled payment system

Choosing a Providing finger

right print on the
transaction to scanner

Providing bank name and Transfer of funds

Aadhaar Number

Generating a confirmation
Receiver
Selecting Micro ATM or slip
banking

Notification
User

PARADIGM SHIFT OF CASHLESS TRANSACTIONS IN INDIA

The term paradigm shift is described as a change in basic assumption within

the ruling theory of science. The term paradigm shift has found uses in

contexts, representing the notion of a major change in a certain thought

pattern. A radical change in the personal beliefs, complex systems, or

organizations replacing the former way of thinking and organizing with a

radically different way of thinking is paradigm shift. This Paradigm shift is

due to the influence of technology with most people preferring online

shopping rather the traditional physical store shopping. The corporate and

retail sectors in India have witnessed the shift in consumer behaviour in

every product or service starting from groceries to commodities. According

to The FICCI Technopak report, the people of working age between 16 - 60

years which represent 64 per cent of the total population of India 2 with a rich

base of young consumers who have a different set of needs and are more
2
amenable to branded products and services . They want to buy these

products and services with fashion, convenience, and speed. In last so many

years the use of ATM has

 increased significantly given rise to the cashless transactions wherein the

debit cards are used for sending money or cash withdrawals. In so many

studies it has been found that the factors for customer satisfaction are giving

competitive advantage to the companies that are involved in cashless

transactions or in providing solutions for cashless transactions. The use of

ATMs and other online transactions is a proof that consumer trends are

shifting towards positive side which is concluded by several studies. This

shift in the paradigm is a result of the behaviour of consumers and their

preferences for using methods of cashless transactions.

Table No: 1 Snapshot of increase in cashless transactions in India during 2011 -

2016

2011 2012 2013 2014 2015 2016 %

METHOD IN IN IN INR IN INR IN INR IN INR GROW

INR INR
OF (Billion (Billion (Billion (Billion TH
(Billio (Billio s) s) s) s)
TRANSACTI ns) ns) from
2011 to
ON 2016
CHEQUES 25154 27526. 37256.1 45212.2 56451.2 92548.7 44.65%
11 2 3 5 2

NEFT & 50121 51002 55837.9 59248.3 60266.1 87287.0 12.35%

RTGS 1 6 9 4

INTERNET 293523 311516 325462 423524. 524254 623251. 18.72%

26 23
BANKING
MOBILE/E- 41 62.21 97.12 115.32 137.67 343.57 123%

WALLLET
CREDIT & 19006 19252 20016.8 20816.1 21510.3 31069.6 10.57%
DEBIT 1 2 9 4

CARDS
AEPS* Nil Nil 190 2210 1063%

*Aadhaar enabled payment systems introduced in the year 2015 and will
also be in the scope of the study.

Source: Annual reports “Reserve Bank of India” 2016. 3

 Figure No: 11 Graphical representations for the growth of cashless
transactions in India from the year 2011-2016

Cheque transactions NEFT & RTGS transactions

Internet banking transactions E-Wallet/Mobile transactions

Credit & Debit card transactions AEPS transactions

.
GLOBAL COMPARISON OF CASHLESS TRANSACTIONS

The cashless methods of transactions are more prominent in developed

countries like Belgium, France, Canada, and the United Kingdome etc. There

are also so many developing countries like Nigeria and Brazil where the

cashless systems are deployed recently to promote cashless transactions and

also to reinforce a cashless society in the country. Along with this

deployment, the governments of these countries are also trying to eradicate

the problems like terrorism and tax evasion. So far this policy has been

proven to be very successful in Nigeria and Brazil.

Although technological advancement has enabled improvement and

innovation in electronic payment system, from the basic ATM card

transaction to online credit transfer, direct debit, card payments and, cheques

is an indicator of the adoption of cashless payments in western countries like

The United States of America and underdeveloped countries such as

Bangladesh and India. In the modern world India is very famous for its

development in the field of information technology and software

development but it is very far behind in the usage of the cashless transactions

if compared to other countries. So a special care has to be taken into

consideration to bring India at the front line to make it at par with other

countries in the adoption of these cashless transaction methods.

Table No: 2 Total cashless transactions in developed and developing countries

CASHLESS
COUNTRIES TRANSACTIONS
1-Singapore 61%
2-Netherlands 60%
3-France 59%
4-Sweden 59%
5-Canada 57%
6-Belgium 56%
7-United Kingdom 52%
8-USA 45%
9-Australia 35%
 CASHLESS
COUNTRIES TRANSACTIONS
10-Germany 33%
11-South Korea 29%
12-Spain 16%
13-Brazil 15%
14-Japan 14%
15-China 10%

Source: Huge Thomas 2016, Measuring progress towards cashless society 4

As shown in the above table no: 2, the massive adoption of digital

technologies to generate process, share and transact information has

triggered the entire world to adopt cashless transaction methods. India is a

country where 98 per cent of total economic transactions by volume are done

in cash. The behaviour of the Indian customers who think that cash is the

best option and do not believe in credit or virtual payment methods might be

responsible for this lack. However, this may no longer be the case in future

as the government has already steered the country towards cashless society.

Prime Minister's demonetisation move has also divided the top economists in

and outside the country over its unquantifiable outcomes.

GROWTH OF CASHLESS TRANSACTIONS IN BRICS COUNTRIES

To add India in the table No: 2 is not suitable because all the countries in that

table are unequal in term of area, GDP, type of economy and, population.

Therefore the researcher assumes the growth of cashless transactions among

BRICS countries that are similar in many ways. BRICS is a grouping

acronym that refers to countries of Brazil, Russia, India, China and, South

Africa that are all deemed to be at a similar stage of newly advanced

economic development.
 Table No: 3 Total cashless transactions in BRICS nation

S.NO COUNTRY CASHLESS

TRANSACTIONS
1 Brazil 15%
2 Russia 4%
3 India 2%
4 China 10%
5 South Africa 6%

Source: Huge Thomas 2016, Measuring progress towards cashless

society 5

According to the above table No: 3, it may be inferred that India is

a leap behind in cashless transactions if compared to other BRICS

nations despite of being a global leader in information technology,

emerging economy, and young population. The findings in this

research would give a clear explanation of this backwardness in

cashless transaction in India and find out the major challenges that

are hindering the growth of cashless transactions.

10
I.1DEMAND OF CASH BY VARIOUS AGENTS IN THE INDIAN
ECONOMY:

India has traditionally been a cash intensive economy. According to an

estimate, about 78 per cent of all consumer payments in India are effected
in cash
Cash usage and demand is classified on the basis of the activity done for
cash, type of medium of exchange of cash, type of value of cash storage.

1. Unaccounted Transactions:
 These are the transactions of the business and monetary
activities that are legitimate in nature by law but taxes are
not paid on the profits earned by unaccounted transactions
that make it illegal.
 Incomes are earned through exchange for these transactions
in cash by making payments in cash.
 Cash is stored in the value of cash itself until the alternative
investment options become available such as real estate
sector, jewellery or in the instruments which yield more
returns than cash.

2. Illegal transactions:
 These transactions are the referred as the payments for
crime, corruption, bribe, human trafficking or other unlawful
activities.
 Cash is stored in the value of cash itself until the alternative
investment options become available such as real estate
sector, jewellery or in the instruments which yield more
returns than cash.

3. Informal Sector transactions:

 Informal sector referred as a sector that includes all the jobs
which are not recognized as normal income sources, and on
which taxes are not paid.
  Income earned by exchange of cash is neither taxed nor
monitored by government as its contribution to the economy
is negligible.

4. Accounted transactions:
 These transactions are the business proceedings that has a
monetary impact on an firm's financial statements, and is
recorded as an entry in its accounting records and are legal.
 Medium of exchange is cash for these transactions which
demand for money
 Store of value of cash could be savings in cash form, in
bank, or invested in an option which gives better returns.

In the context of the three main sectors of Indian Economy.

1. Agriculture sector includes the cultivation and allied sectors like

forestry, animal husbandry, fishing and horticulture
2. The Industrial (or manufacturing) sector is classified into micro,
small, medium and large categories.
3. Services sector includes banking, warehousing, transportation,
advertising, communication, and information technology (IT)
services, etc.

Here, the fact that is worth noting is that even though the agricultural
sector contributes least to the overall GDP of the nation, its tends as the
highest employed human workforce with around 60% of the total
working population of the country engaged in it. Most of the transactions
in these sectors are dependent on cash as majority.
I.2CURRENCY IN CIRCULATION IN INDIA:
In India, the Reserve Bank has the sole authority to issue banknotes in
India. Reserve Bank, like other central banks the world over, changes the
design of banknotes from time to time. The Reserve Bank has introduced
banknotes in the Mahatma Gandhi Series since 1996 and has so far issued
notes in the denominations of ₹5, ₹10, ₹20, ₹50, ₹100, ₹500 and ₹1000
in this series.

The annual report of Reserve Bank of India (RBI) of 31 March 2016

stated that total bank currency notes in circulation valued to ₹16.42 lakh
crore (US$240 billion) of which nearly 86% (around ₹14.18 lakh crore
(US$210 billion)) was ₹500 and ₹1000 currency notes.

III.2PURPOSE OF DEMONETIZATION:

After the PM Modi’s announcement of demonetization, Urjit Patel the

Governor of the Reserve Bank of India and Shaktikanta Das the
Economic Affairs Secretary held a press conference and explained the
purpose of demonetizing the ₹500 and ₹1,000 banknotes was as follows:

 To tackle the problem of Black Money in India.

 To stop terror financing.
 To get india free from corruption
 To make the corrupt lose their money.
 To get everyone to have bank account.
 To mainline the parallel economy to formal economy.
 Encourage deposit base and Savings
 For cashless society
 For cracking down the fake currency notes (counterfeit notes)
 To give boost to white economy.
IV.2.1 AND CASHLESS BANKING FACILITY:
The Government of India and the Reserve Bank of India have initiated a
series of measures, some of which are temporary, to promote movement
from cash to non-cash modes of transactions which are as follows;
(i) Reduction in the merchant discount rate (MDR) and point of
sale (POS) fees;
(ii) Monetary incentives in the form of discounts and prizes;
(iii) Service tax relief on MDR for small transactions;
(iv) Waiver of charges for small value transactions under Immediate
Payment Service (IMPS), Unified Payment Interface (UPI) and
Unstructured Supplementary Service Data (USSD) based *99#
platform;
(v) Broadening Prepaid Payment Instrument (PPI) reach
by enhancement of limits;
(vi) Introduction of a new category of PPIs;
(vii) Permitting banks to issue PPIs to a larger set of entities; and
(viii) Permitting National Payments Corporation of India (NPCI) to
launch
(a) the common app for UPI; and
(b) National Electronic Toll Collection (NETC) system.
The government also announced that it would ensure that transactions
fee/MDR charges associated with payment through digital means shall
not be passed on to consumers. These measures are encouraging
migration of consumers from cash to digital modes of payments.
After the announcement of demonetization, digital activity levels were
low in the initial weeks as people were busy depositing/exchanging
SBNs. However, in December 2016, digital payment activity increased
alongside progressive remonetization. The usage statistics show that
growth for major modes of electronic payments was good in October
2016, mainly on account of festive
season. The continuance of that high growth with a further pick up in
some components from November to January 2017 (Table 4) was a
positive fallout of demonetization. However, the pace of growth
moderated somewhat in February 2017.

Table 4 : Growth in Select Electronic Modes of

Payments
(y-o-y growth in percentage)
Category Oct- Nov- Dec- Jan- Feb-
16 16 16 17 17
NEFT Volume 16.2 23.3 39.0 38.0 34.5
Value 37.6 38.3 40.8 60.2 49.5
CTS Volume -1.1 23.0 58.4 52.7 20.2
Value 2.9 8.6 13.0 19.3 0.8
IMPS Volume 116.7 89.6 157.2 177.7 150.4
Value 150.7 135.9 186.6 196.7 184.2
NACH Volume 53.0 30.8 58.3 19.8 -0.9
Value 89.8 76.3 116.7 22.8 54.2
Source: RBI Bulletins and Press Releases on Electronic Payment Systems
- Representative Data

Glossary:
1. National electronic funds transfer (NEFT) is a nation-wide
payment system facilitating one-to-one funds transfer. Under this
Scheme, individuals, firms and corporates can electronically
transfer funds from any bank branch to any individual, firm or
corporate having an account with any other bank branch in the
country participating in the Scheme. Under NEFT, the transactions
are processed and settled in batches. There is no limit – either
minimum or maximum – on the amount of funds that could be
transferred using NEFT.
2. Immediate Payment Service (IMPS) offers an instant, 24X7,
interbank electronic fund transfer service through mobile phones.
IMPS transfers money instantly within banks across India through
mobile, internet and ATMs.
3. Cheque Truncation System (CTS) is the process that obviates the
need to move the physical instruments across bank branches. This
 reduces the time required for their collection and brings elegance to
the entire activity of cheque processing.
4. National Automated Clearing House (NACH) implemented by
NPCI is a web based solution for making bulk transactions towards
 distribution of subsidies, dividends, interest, salary, pension etc.
and also for bulk transactions towards collection of payments
pertaining to telephone, electricity, water, loans, investments in
mutual funds, insurance premium etc.
5. Unified Payments Interface (UPI) is a system that, through a
universal application for transaction, connects multiple bank
accounts into a single mobile application (of any participating
bank) for immediate money transfer through mobile device round
the clock 24x7 and 365 days. It uses a single mobile application for
accessing different bank accounts. Recently NPCI has launched a
front-end app called BHIM that can be downloaded on mobiles to
use UPI for fund transfer.
6. Unstructured Supplementary Service Data (USSD) service of
NPCI caters to the need for immediate low value remittances. The
USSD service brings together diverse ecosystem partners such as
banks & telecom service providers and allows customers to access
financial services by dialing *99# from their mobile registered with
the bank. The service works across all GSM service providers all
types of handsets – smart phones and feature phones.

OBJECTIVES OF STUDY

 To find out various challenges and opportunity associated with the

implementation of the cashless policies in India
 To recognize the advantages of going cashless.
 To know the impact on retail business market on cashless transaction.
 To get to development of India on the way of being cashless as far
 as advanced exchanges, for example, credit, charge and bank
installments.

SCOPE OF THE STUDY

To Work on the cashless economy is scarce, so scope of study is more.

Researchers further need to understand the more. Researchers further need to
understand the mechanism of cashless policies effecting cashless payments and
their effect on the Indian economy. To examine the importance of cashless
policies in the economy of a country and how it effects the economic growth.

LIMATATION OF THE STUDY

 Lack of infrastructure in India

 Lack of education
 Financial inclusion
 Unwillingness of India to make cashless transaction

RESEARCH METHODOLOGY

SOURCE OF DATA

The secondary data are collected through books, journals and websites.

PLAN OF ANALYSIS

The data is collected through secondary sources and the data is analysed
through simple analysis technique the tools are used for presentation of
research and the information which will be easy to understand. The study
mainly focuses on impact of cashless economy on India. And various
challenges and opportunities associated to implement cashless transactions.
OUTCOME OF THE STUDY

1. Most of the people are aware about cashless transaction

2. Making india cashless will going to uplift the standard of living

3. People want to live in a city where every work is digitalized

4. Literacy to every other rural people and providing digital education is

very important thing to convert india digitally

5. Rural people can able to adopt the digital changes only if they will be
given proper guidance of digital literacy and knowledge

6. IT sector will get the employment opportunity because this project

requires people with fresh IT skills. There is going to be a vast change in
development in service sector as well as rural sector

7. After digitalization educational institutes will become more convenient as

compare to their current serviced

8. Availability of free wi-fi all public places is the idea of digital India
according to most of the people

9. According to most of the people DEMONITIZATION has been rated

Good

10.According to people Demonetization will get great success

11.Most of the people have Jan dhan account or bank account

12.Most of the people have access to internet connection in their mobile
phones

13.Most of the people prefer PAYTM to make payments digitally

14.Most the people were started to use the Electronic Fund Transfer (EFT)

15.The amount of the tax collectins also increased due to the cashless
transactions in india

16.It will reduce the pickpockets