TABLE OF CONTENT

Sr. No. Name of the Topic Page No.

1 Introduction 1-

2 Review of Literature

3 Research Methodology

4 Data Analysis, Interpretation &

Presentation
5 Findings, Conclusion &
Suggestion

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 CHAPTER: 1
INTRODUCTION

“CASH,” a magical term, has been etched in every Indian citizen’s mind from ancient times,
and still, it is in demand. In today’s world, every Indian customer must have the option to pay
electronically, using mobile devices, laptops, and other devices, and it is essential to boost the
country’s country as a cashless economy through technology The contribution of cash in the
context of the Indian economy has played a vital role in Indian history in all different sectors,
whether it is agriculture and allied industries, biotechnology, automobiles, cement, consumer
durables, e-commerce, transportation, business, banking, etc. But it is time to equip in all
these sectors with new, modern technologies to introduce the word “cashless” into the
picture, which makes commerce faster, easier, and more efficient.

“Cashless Economy” refers to the physical stream of national exchange being replaced with
the digital platforms such as online transactions, the introduction of plastic cards, Internet
banking, etc. (Prasath et al., 2019). With this change, the currency is not restricted from use,
whether it means to slow down the usage of cash currency by utilizing the appropriate
procedure. The role of digital transactions becomes more prominent; hence it provides an
alternative solution to the population for different perspectives (Alibekova et al., 2020).
There is a requirement to move out of the cash and enter the new cashless world. For that,
there are various initiatives launched by the Indian government, i.e., Digital India, so that the
use of cash can be reduced and focus on digital transactions could be increased and
entertained into the minds of the people. Understanding the scope and importance of Cashless
India, it is the Indian government’s top priority to address the significant issues of cybercrime
and online fraud so that people are aware of their effects. Banks also play a crucial role
because they will follow the transactions, as they are responsible for all the operations,
whether cash or cashless transactions. There is a new level of change in the latest stage,
which we see in making and receiving payments. There has been a constant change in daily
infrastructural activities; hence, we can see a policy change. Everyone needs to understand
that India’s future is a “cashless economy” for the welfare of society (Antique, 2019). A
decrease in the level of cash flow, or its disappearance, or replaced by plastic notes can be
brought or introduced in the future by the government that is trying to bring awareness
among the citizens. The primary response created for introducing a cashless economy was
mainly after demonetization, which became popular.

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The government is also well conscious that consumers are progressively using their
smartphones to pay for goods and services, which is a step toward Digital India. For India’s
transformation, the consumers need to be equipped with digital knowledge, which is known
to be the Indian government’s principal element. The primary focus is on rural India. The
technology needs to be assessed and implemented to move India from cash to a cashless
economy, as there is a lack of awareness among peoples. The majority of India’s population
is engaged in agriculture, so there is a need to adopt new measures to move India forward
there. Due to the privacy and security concerns, people are scared to move from cash to
cashless economy as they find it risky. Two types of online payment are introduced in India,
namely, walled-based and UPI (Unified Payment Interface)-based media. As the government
pushes its drive for a cashless economy, it backs UPI-based mobile payments apps. Banks are
also liable to promote online payments such as Internet banking, mobile payments, etc.

There is no need to go to the bank, the transactions are done from home very quickly and
easily (Menon & Ramakrishnan, 2019). This paper will analyse the evolution of the banking
system and its development to make India a cashless economy with future digital transaction
trends.

This study will evaluate the current status of the reach, availability, and disbursement of
cashless transaction awareness.

The RBI and the Government of India are making various efforts to minimize the use of
physical cash in the economy by promoting the digital payment devices or modes including
prepaid instruments and cards. RBI’s effort to encourage these new varieties of payment and
settlement facilities aim to achieve the objective of a ‘less cash’ society. Here, the term less
cash society and cashless transaction economy Indicate the same thing of minimizing cash
transactions and settlement rather doing transactions digitally. Cashless transaction economy
doesn’t mean shortage or scarcity of cash rather it indicates a culture of people settling
transactions digitally. In a modern economy, money moves electronically. Hence the spread
of digital payment system along with the expansion of infrastructure facilities is needed to
achieve the goal. On November 8th, Government banned Rs 500 and Rs 1000 two highest
denominations notes from circulation. Main objectives were to fight counterfeit money and
black money circulation in economy. The action has given tremendous boost to cashless
transactions as card based and digital payments systems were not hindered when all high

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value denomination cash transactions suffered because of absence of high denomination
currencies in circulation.

The Reserve Bank of India and Government of India has launched different measures for the
spread of electronic and other noncash settlement culture in an economy. The Vision-2018
for Payment and Settlement Systems in India brought by the RBI in June 2016 reiterates the
commitment to encourage maximum use of electronic payments by all sections of society so
as to achieve a “less-cash” society.

“The wide contours of Vision-2018 revolve around five Cs —

Coverage, Convenience, Confidence, Convergence, and Cost.

To achieve these, Vision-2018 will mainly concentrate on four strategic initiatives such as
responsive regulation, robust infrastructure, effective supervision and customer-centricity,” –
RBI. The vision statement highlights following plans:

1. The regulator wants to minimize the share of paper-based clearing instruments

2. It aims to raise growth of the digital payments system in an economy
3. It wants to ensure maximize the use of Aadhaar in payment systems

Government also made various fiscal measures for the encouragement of card culture in the
2016 budget. Exempting service charge on card-based and other digital payments system was

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one such step. Aadhaar based payment system will be a big boost for encouraging the
cashless transaction culture. A committee of seven members, chaired by a ministry official,
Mr. Neeraj Kumar Gupta was formed to recommend some steps for the reduction or
minimization of paper cash base transactions in an economy.

The technology has spread internet banking system or core banking solutions, mobile
banking, prepaid instruments, credit and debit cards etc. concurrent, electronic payments
system is fast growing. All these measures indicate that India is moving towards the RBI’s
goal of less cash economy-steady but slowly.

It’s time to go cashless transactions system. The purpose of demonetization is not only to
remove or avoid black money in transaction but also to encourage cashless payment method.
Instead of breaking heads by standing in Automated Teller Machine (ATM) queue you
should adopt a cashless method for the transaction. A cashless method is more transparent as
each and every transaction can be traced easily as it leaves its footprints. Many people have
adopted new cashless payment options.

India is an enthusiastic effort to move towards a cashless transaction economy by minimizing

the use of corporal cash. Digitalization is a process which may help the economy towards a
cashless society

The trend towards use of non-cash transactions and settlement began in daily life during the
1990’s, when electronic banking became popular. By the 2010’s digital payment method
where widespread in many countries with examples including intermediaries such as PayPal,

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digital wallet systems operated by companies like apple, contract less and NFC payments by
electronic card or smart phone and electronic bills and banking, all in wide spread use. By the
2010’s cash had become actively disfavoured in some kinds of transaction which would
historically have been very ordinary to pay with physical tender and larger cash amounts
where in some situations treated with suspicion, due to its versatility and ease of use in
money laundering and financing of terrorism and actively prohibited by some suppliers and
retailers, to the point of coining the expression of a “war on cash”. By 2016 in the United
Kingdom, it was reported in 1 in seven people no longer carry or use cash. The 2016 United
States user consumer survey study claims that 75% or respondents preferred a credit or debit
card as their payment method while only 11% of respondents preferred cash. By 2017, digital
payment methods such as Venmo and square contribute to cashless transaction. Venmo
allows individual to make direct payment to another individual without having cash
accessible. Square is an innovation that allows primarily small business to receive payments
from their clients.

“WE WANT TO HAVE ONE MISSION AND TARGET: TAKE THE NATION
FORWARD DIGITALLY AND ECONOMICALLY”

-SHRI NARENDRA MODI

Prime minister, Mr Narendra Modi launched the Programme “Digital India” with a version to
transform India into a digitally empowered nation and creating a cashless, paperless
economy. As per the current status of India, only 7% or 8% of all the payments are taking
place electronically. Narendra Modi’s government scrapped currency notes of INR 500 and
INR 1000 denominations, which is seen as an unprecedented measure, through a giant leap
towards curbing corruption and forged currency.

Even the RBI has also recently revealed a document “Payments and Settlement Schemes in
India: Vision 2018” setting out a plan to inspire electronic payments and to permit India to
move to a cashless society or economy in the medium and long term. The depletion in cash
due to demonetisation has pushed digital and e-transaction to the forefront; e-banking, e-
wallets, and other transaction apps becoming prevalent.

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A cashless economy is secure, it is clean. You have a leadership role to play in taking India
towards an increasingly digital economy. Digitalization is a process which may help the
economy towards a cashless society.

The Indian Economy is the seventh largest in the world, measured by the nominal GDP and
the third largest by the Purchasing Power Parity. India, classified as one of the newly
industrialised countries, and one of the G-20 major economies, has an average growth rate of
approximately 7% over the last two decades. Maharashtra is the wealthiest state in India, with
an annual national GDP of USD 330 billion, and accounts for 13.4% of the nation’s GDP.
Maharashtra is followed by the state of Tamil Nadu (USD 170 billion) and Uttar Pradesh
(USD 150 billion). In the last quarter of 2014, the Indian Economy surpassed the Economy of
the People’s Republic of China, becoming the World’s fastest growing major economy.
India’s young population, corresponding low dependency ratios, healthy savings and
investment rates and the nations increasing integration into the global economy provides
India with the long-term growth prospective. According to some economists the Indian
Economy has the potential to become the third largest economy by the next decade and one
of the two largest economies century.

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Merits of Cashless Transactions

1. Electronic payments will beneficial for business people to increase their customer base
even in far of geographic locations and hence will result in increased business transactions.

2. The real estate prices will come down because of curb on black money circulation, as most
of the black money is invested in Real estate’s business.

3. Electronic payments will enhance transparency and accountability. Majority of the cashless
societies are corrupt free as all the transactions are being traced, are visible and are
transparent.

4. Making online payments are handy and it will lead to slim wallets as people need not carry
hard cash.

5. Majority of election funding is done through black money. Cashless transactions will make
it impossible for political parties to spend thousands of crores of unaccounted money on
election purpose. Purchasing votes by giving cash will also come to an end. True democracy
will come into picture.

6. Amount of tax collected will also maximize, and it can be spent for the betterment of poor
and under privileged people and infrastructure development activities in economy.

7. Generation of counterfeit currency will be decreased and hence terrorism can be prevented.

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8. It will minimize pick pocketing and robbery of cash in crowded locations and big cities.

9. Through online payment one can check history of their financial transactions and plan their
budget in a smart way.

10. Printing costs of paper notes, coins and maintenance itself is accounting to 27 billion; this
can be eliminated by electronic payments as there would be no need of paper currency.

De-merits of Cashless Transactions

1. Many of the rural people and even some urban people still do not have a functional bank
account in order to make online payments.

2. A large number of India’s population is in rural areas, and there are no proper internet
facilities available to make online payments.

3. People in rural locations are not well educated about the digital mode of payment system.

4. Even today some places which take paper cash and do not accept debit and credit cards.
Making a purchase at such places with card becomes very difficult to customers. Small

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retailers in India still deal only in paper cash as they cannot afford to invest in digital
infrastructure facilities.

5. Cash is not under our control; people will spend excessive amount for purchase of goods
and services.

6. If you lose your debit/credit card, it takes some time to get a new one.

7. Hacking and cyber theft are major and challenging problems which can be caused by
online transactions. Cyber Security measures have to be brought in place to avoid money
going into wrong hands.

8. Even in big cities, sometimes online transactions cannot be made because of poor internet
facilities or network problems.

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 CHAPTER: 2

Review of Literature

Meaning of “Cashless Economy” is not the complete absence of cash in economy, it is a

system in which goods and services are bought and paid for through Electronic Media.

Many empirical studies have been conducted on the project of “CASHLESS ECONOMY” in
India and Abroad. The major emphasis of research has been on various issues like frauds,
security, usage patterns, new method of e-payment, etc. The previous work done on cashless
economy needs perusal. It has been reviewed to indicate in a general way the type of work
done in this project in India. It is expected that the critical examination of the studies would
give focus to our problem and help to indicate the areas which have remained neglected at the
hand of the researches. From the review of literature, it was found that hardly there was a
study which examine the perception of both users and traders on the usage of cashless
transaction. Also, many studies concentrated on individual cards, for instance, debit or credit
card and neglected the joint effect and new innovative cards like smart card, charge card and
check card.

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1) WORTHINGTON (1995), “THE CASHLESS SOCIETY”

paper describes the cashless society, were clumsy-to handle points and notes are replaced by
efficient electronic payments initiated by various types of plastic cards is a boom for the 21st
century. Some of the interested parties stand to gain more than others if the cashless society
become a reality. Paper outlines the rationale of those who are keen to promote the cashless
society and the implications for marketers charged with winning consumer acceptance for
payment by plastic card. The plastic card payment product is analysed under the three
headings of pay later, pay now and pay before and a view is offered as to the future prospects
for each type of plastic card in contributing to the development of the cashless society

2) MANDEEP KAUR AND KAMALDEEP KAUR (2008), DEVELOPMENT OF

PLASTIC CARDS MARKET;

past, present and future scenario in Indian banks found that plastic money in the form of
cards has been actively introduced by banks in India in 1990’s. But it was not very popular
among Indian consumer at the time of its introduction. The change in demographic features
of consumers in terms of their income, marital status, education level, etc. and up gradation
of technology and its awareness bought the relevant changes in consumer preference.

3) BANSI PATEL AND URVI AMIN (2012) in their research paper “Plastic Money:
Road way towards cashless society”

discussed that now a days in any transaction plastic money becomes inevitable part of the
transaction and with-it life becomes easier and development to take better place and along
with the plastic money it becomes possible that control the money laundry and effective
utilization of financial system would become possible with would also helpful for tax
legislation.

4) ACCORDING TO ALVAREZ, CLIFFORD (2009) in their reports

The problem regarding fake currency in India. It is said that the country's battle against fake
currency is not getting easier and many fakes go undetected. It is also stated that
counterfeiters hitherto had restricted printing facilities which made it easier to discover fakes.

5) JAIN, P.M (2006) in the article

An Analysis of Growth Pattern of Cashless Transaction System. Available funds can be

optimally used if fullest advantage of technology, quick payments and remittances is ensured.

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This will largely benefit banks, financial institutions, business houses and common citizen of
India. He also pointed out the need for e-payments and modes of e-payments and
communication networks.

6) SRINIVAS, N. (2006) in his study

An analysis of the defaults in credit card payments, has tried to analyse the socio-economic
profile of the defaulters of credit cards, to identify the set of factors which contributed to such
defaults and suggest relevant measures to minimize the default cases. Analysis of reasons
indicated that economic hardship is the major reason identified by majority of the sample
units follows by rigid payment structure and loss of job/business. The main suggestion is that
the banks concerned should redesign the payment structure of credit card defaulters in a
flexible and affordable instalment

7) WHY “CASHLESS” MAY BE THE NEW NORMAL? G SAMPATH, THE HINDU,

The article is a slightly different take on cashless economy. The author covers the concept of
a cashless economy, first by tackling the outcomes of such an economy. The article covers
the concept of a Cashless Society with understanding the beneficiaries, and who will face
difficulties, if implemented. According to the author, one immediate outcome of a cashless
India, would be a sharp rise in indirect taxes compliance. Traders, Small Businesses,
Shopkeepers and Consumers, use cash as means to trade, so that they can avoid paying,
service taxes, sales taxes, VAT and any number of indirect taxes and fees. The author also
suggests that, on enforcing a cashless payment system, 86% of the paper money will be
sucked out, and will let people flounder for a period in a condition of acute money scarcity,
but that is perhaps the quickest means way to get there.

8) AROUND THE WORLD IN 80 PAYMENT- GLOBE MOVES TO CASHLESS

ECONOMY. Bernardo Batiz-Lazo, Leonidas Efthymiou, Sohia Michael

The authors, through the research throw some light on innovations around the world towards
a cashless economy. Ever since computers were first introduced into the retail banking
systems in the late 1950‟s there has been the vision for the future world where cash is
obsolete. The near death of person, increase in debit and credit card use, and innovations such
as PayPal, square, apple pay and bitcoin, have led us to believe that cashless society is well
within our reach. So50years64 International journal of Management, IT and Engineering into
the journey and, we are still not there yet. However, a few innovations have taken place

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around the world. While some countries have embraced mostly electronic forms of payment,
this does not mean that the others still using banknotes and coins are less efficient or
backwards as some might seem to think. Differences between countries and between rich and
poor within them remain partly due to custom, culture and regulation. But also, because new
technology failed to make its case to users.

9) THE COUNTRY THAT WOULD PROFIT THE MOST FROM A CASHLESS

WORLD, Bhaskar Chakraborty, Ravi Shankar Chaturvedi, Benjamin Mozzetta for
The Harvard Business Report,

It’s been nearly 300 years since paper money became accepted as legal tender. While much
has changed about how we make, sell, and buy goods, cash has stuck around. It’s been only
recently that the road to a wider cashless society has started to really take shape. From apps
such as PayPal, Venmo, or Square Cash are signs that Cash is following the path of other
“information goods,” such as printed photographs, cassette tapes, and DVDs in being
replaced by digital alternatives. Cash, according to a recent MasterCard study, accounts for
nearly 85% of the global consumer transactions. Cash has stubbornly resisted going the way
of digital extinction. Paper currency is ubiquitous. It is also untraceable and universally
accepted. For many users, cash equates to a sense of security and for many it is a sense of
independence from government oversight. The rise of cyber-crime and growing concerns
about the ability of public agencies to look through digital records will add to the
unwillingness among many to let go of paper money. Countries that are highly digitally
evolved are best positioned to unlock value by focusing on migrating to digital alternatives
from cash. For those countries lagging in their digital evolution, the path to cashless nirvana
is through investing in digital inclusion first. This sequencing is crucial to success.

10) BORHAN OMAR AHMAD AL-DALAIEN (2017):

Examined that cashless economy is an economic system in which there is little or very low
cash flow in a society and goods and services are bought and paid through electronic media.
There are many benefits of cashless economy like faster transactions, increased sales, prompt
settlement of transactions, convenience and lower risk, transparency and accountability, and
reduced maintenance costs. Despite many benefits, there are several challenges before
cashless policy in India such as inadequate number of ATMs, digital illiteracy, lack of

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internet facilities, few banks in villages, costly swipe machines etc. The findings revealed that
there are no significant benefits of cashless economy to the general public.

11) PREETHI GARG & MANVI PANCHAL (2017):

Examined that many people actually positive opinion about cashless transactions and
usefulness of cashless economy as it helps to fight against terrorism, corruption, money
laundering but one major problem in the working of cashless economy in India is
cybercrimes and illegal access to primary data. Therefore, it’s important to strengthen
Internet Security from protection against online frauds. Huge number of populations in India
is still below literacy rate living in rural areas. For smooth implementation of cash less
system in India, the following some measures are recommended Government have to bring
transparency and efficiency in e-payment system, strategies used by government and Reserve
Bank of India to motivate cashless transactions by licensing payment banks, promoting
mobile wallets and withdrawing service charge on cards and digital payments. A financial
literacy campaign should be conducted by government continuously to make population
aware about advantages of electronic payments.

12) SHEETAL THOMAS & G. KRISHNAMURTHI (2017):

Examined that there is enormous potential that rural economy in India can become a cashless
economy. The rural population is ready to learn it, with one person receiving benefit soon the
rest of the village will follow. Keeping the level consumption patterns and the recent trends
into mind the government can plan for implementation of basic support system like,
incentivizing the use of internet through free data and smart phones, distribution of laptops to
students taking higher education in nearby towns. Another way is by creating awareness
about digital transactions and financial literacy among rural people by partnering with
different educational and NGO’s. It can make the cashless rural economy a reality from
dream.

13) DR. TUSHAR CHAUDHARI (2017):

Cashless transaction systems are not possible without adequate internet facilities, so
government must investigate in infrastructure availing internet. Especially free wi-fi zones
should be made available at local market. All the major banks must have separate counter
which will be particularly used for assistance and guidance for cashless transaction system.

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Extra charges on Cashless transaction must be stopped. It should be made compulsory to all
cooperative societies to make Cashless transaction specially cheque or demand draft. Some
advantages must be given to the people who are using Cashless transaction. The vast
advertisement campaign must be launched which will not only develop Cashless transaction
but also will provide valuable assistance in using it

14) DR. ANTHONIMA K. ROBIN (2018):

This study focus on cashless transaction is having a long-term impact on the lives of the
people. As there are two sides of coin, there are positive and negative impact of the scenario
generated after demonetization. With the increasing usage of cashless means people are tend
to feel save as they are free from carrying a wallet full of physical notes along with us, which
is not at all safe in a world full of anti-socials activities. People rather prefer to use mobile as
the most effective method of payment. Mobile have started serving as an important
instrument for all kinds of transactions such as bill payments, fees payments, funds transfer,
recharge, etc. In further to this, some other crimes such as burglary, extortion, bank robbery,
etc. are also declining. One of the most important motives to implement and motive cashless
transaction is to take control on the illegal transactions and all activities related to terrorism.

15) DR. BUDHESHWAR PRASAD SINGHRAUL V (2018):

The major 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 beginning stage and
all most of all population are mainly dependent on paper 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.

16) Genesis of Cashless Society

There’s been an increase in the number of payment facilities methods in the digital era
because of the constant rise in technological infrastructure and policy changes. Internet of
Things (IoT) is the essential function in our society to bring citizens together by adopting an
open innovation approach. This research has investigated those cities that have become Smart

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Cities with the help of IoT. In the long run, to become independent in information technology
(IT) and artificial intelligence (AI), can be achieved with government’s help, as its role is a
crucial part of the future. Moreover, the study reviews open innovation and IoT literature.
Hence, for the development, there should be a close relationship between relational and trust-
building capabilities, learning capabilities, and open innovation capabilities (Scotto et al.,
2016).

E-banking and e-payment opened the doors for cashless transactions earlier, but it was not
well known. The online modes of payments made it possible to keep an eye on the people
who have black money, but at that time, there was a lack of awareness, and people were not
well versed with the technology, which was not successful from the pattern from the year
2006. With the full advantage of technology, there is a way for the government to introduce a
new system into the market for modernization and quick payments remittances. The e-
banking system also ensures the optimal use of banking services for better availability of
funds for banks and customers. The author mentioned that communications networks would
be responsible for the new modes of payments (Maurya, 2019).

The rationale for establishing a digital revolution has steadily converted more and more
analogue information into digital channels. The digital revolution is benefitting society by
allowing easy interoperations, conditional on common standards (Pearson, 2010). All markets
have been filled with digital standards with telephones, music players, and cameras. There is
also a need to control terrorism funding so that the money flow can help find black money,
hoarding unaccounted assets, etc. In conclusion, there is rapid growth in the advancement of
technology in every country’s payment system, which will become fully digital. Wireless is
considered to be the core factor in the current phase of digital convergence. It is not only
about mobile phones features, but the applications are moving on the cloud, which makes it
possible to work digitally (Teece, 2018)

17) Need for Cashless Transactions

According to the Indian government, the cashless policy creates more empowerment in the
industry, which will lead to an increase in employment and a reduction in cash-related fraud.
Now, more cash will get saved in the bank accounts of customers. There will be less hard
money in their hands, which will lead them to divulge their exact income so that income tax
fraud can reduce significantly. It will also reduce fraud toward cash transaction and lead to
foreign investors’ participation in the country as this mode of payment is secure (Grimes,

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2003). When this step was introduced in other countries, they were the right steps going in
the right direction. The assumption was that it pushed the modernization of the new payment
system. Increase in the number of banks leads to reduced transaction costs and a reduction in
the high security of carrying cash along. This bank helps make a more manageable platform
for interaction with consumers to know about the industry. Financial risk is also an essential
point in pushing the digital channel to improve the idea of a cashless economy. Indians have
used the electronic modes of payment for many years; however, the retail sector still relies
predominantly on cash transactions. They find it a more secure and convenient way of
physical operation in the retail market (Chundu Venkata Rao, 2014).

The constant innovation in the banking systems, products and services helps it move toward a
more coherent environment. The part highlighted in this paper is MBPS (Mobile Banking &
Payment System), which is directly proportional to digitalization. The authors tried to keep
the analysis based on historical and contemporary literature by highlighting essential gaps
and discussing the challenges and opportunities during e-banking implementation (Devlin,
1995). The study clearly proposes a new mobile banking system, namely, MBPS, a
multitasking smartphone software that allows various banking and payment transactions in a
single click with artificial intelligence. Similarly, it also determines different implications and
limitations that are making future steps difficult. The research is entirely theoretical; hence,
no viable hypothesis has been formulated. The objective is to conceptualize and propose
MBPS through various digital banking channels, and enter into an aggressive digital market
full of innovation. In conclusion, MBPS will create tremendous growth and potential that we
can predict, which is not too into the future, when mobile communication will outperform all
digital channels and products (Shaikh et al., 2017).

18) Impact of Demonetization on Cashless India

There is a need to investigate different reasons for the lack of penetration of digital
transactions in India and find the available attributes that need alteration to fill the Indian
economy gap. The objective is to discover how the journey will continue on a successful path
and get deeper insights. The focus is on the people behind acceptance and non-acceptance of
digital modes of payments, so a comprehensive examination of the various reasons is
undertaken (Gupta et al., 2012). The trend toward non-cash transactions such as e-wallets and
other modes of online payments has a significant impact on the Indian economy. Indeed,
demonetization has played a substantial role in introducing online payments, and day-by-day,

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there is an influence on the growth rates in payment volumes. There are various challenges
faced to implement digital transactions in India and how they can be overcome. It has been
seen that there is progress in the digitalization in the current scenario of the Indian economy.
The focus is primarily on the rural areas as there are people who need to acquire the new
facilities to move further and contribute toward the Indian economy (Kumar & Puttanna,
2018).

The introduction of the word “cashless economy” happened after the demonetization of 500-
and 1000-rupee notes in India after November 2016. A quick review was carried out from
media reports on the history of demonetization in India compared with other emerging
countries. They recorded that around 80% of the money transactions are based on physical
flow, which opens the doors for problems like corruption, black money, and terrorism
funding. These are cashless problems, which means minimal use of cash and the rest of
operations are through different electronic modes of transactions (Adil & Hatekar, 2020).

The dream of a cashless India is embraced by all people. There is both the perspective, i.e.,
benefits and challenges toward implementing it, as in both cases, India might face difficulties.
The rationale for establishing a cashless economy started after India’s demonetization, in
terms of origin and impact over the following year after November 2016. There is a proper
involvement required from every individual to keep the desired objectives included in the
plan. After that initiative, tax payment collection increased as there was no way to escape
from it. The whole thing was focusing on promoting online modes of payments for the Indian
economy’s successful flow. The process has started and there will be many more
opportunities to achieve Digital India’s goal (Khurana, 2017)

19) Impact of Fraud Detection and Financial Inclusion

There would be a significant impact on society in implementing the steps toward India’s
economic growth. There is a need to focus on the effects that would make India have a high
market value. It shows there will be both positives and negative impacts in moving from cash
to a cashless economy (Yucha et al., 2020).

There is a need to change the financial system in today’s world, where the main focus is on
Digital India. In recent times, technology has been the great enabler in the financial industry
in pulling out masses from the bottom of the pyramid. Moving further with the advent of
modern technologies like AI, Blockchain, Internet banking, and smartphones helped the
whole financial ecosystem (Carlsson, 2004). It paved the way for a successful banking

18
industry, not only in India, but globally. The new term coined by the industry experts is
“Fintech.” The word itself represents the amalgamation of two words – finance and
technology. Every financial company viewed it as an excellent opportunity to derive all the
positive outcomes. Internet availability and data facility became a facilitator for fintech,
whereas, in the Indian context, Digital India, e-governance, demonetization pushed for the
adoption of fintech solutions to improve the Indian Economy in the context of Digital India.
India has witnessed a large scale of technology-based tools supported by rapid growth in
mobile and Internet users in urban and rural areas (Hernández-Muñoz et al., 2011). For the
possible financial inclusion, literacy and credit counselling can convince the masses of the
usefulness of financial services, which will have a long-lasting impact on people’s lives in
pulling people out of extreme poverty (Liao et al., 2019).

Moving toward digitalization and cashless economy from cash also needs examination of the
current IT infrastructure and AI for security reasons and looks at frauds toward digital
transactions. The initial step in moving from traditional to modern economy is for banks to
have a reliable and smart mechanism to fight cybercrime. We need to accept a stable banking
system for a new transformation in the banking sector; it is necessary to control frauds to
introduce digital transactions. So, for the betterment of the Indian economy, anti-fraud
regulations should police the system. This focus is on moving into Digital India through
different platforms, so there is a need to ensure addressing crime security risks by introducing
Artificial Intelligence into the system (Attigeri et al., 2018).

20) Adoption of Mobile and Plastic Money

Mobile phone penetration in India is reaching a new phase with falling prices of all
smartphones resulting in mobile access to the lower-income strata. Hence, the telecom
companies’ insufficient data and call charges made it even the right choice for rural and
urban India. In rural India, mobile phones have opened financial services opportunities in
digital money and mobile wallets, leading to financial inclusion (Suebtimrat, 2020). This
paper helps understand the telecom industry’s current trend toward mobile money or digital
payments in the Indian market for the upcoming development in the “cashless economy.”
This paper also helps the industry and government understand the system and the challenges
associated with digital payment deployment. Mobile money will give different insights into
how mobile services can be implemented by the rural population at the bottom of the

19
pyramid. It needs to be included in the country’s development through financial inclusion by
deploying mobile payments (Mukhopadhyay, 2016).

E-commerce is gaining strength with time and helps develop global business attraction and
socio-economic development. The technology has not only expanded in India, and in
neighbouring countries as well. We observed that digital cash usage is bringing substantial
satisfaction among the youth and groups of people aged between 25 and 35 as they deemed it
safe and free from fraud. According to the research, there has been a positive trend to adopt
e-commerce in business, generally for MSME (Humbani & Wiese, 2017). The significant
shareholding is managed by MSME who are taking an interest in the IoT. Still, the older
generation does not find it suitable as they see it is not free from cyber-crimes, and they do
not want to take risks. These findings help contribute to designing strategies for the
development of online system channels in every sector (Jehangir et al., 2011).

20
 Methods of Cashless Transactions

The Digital India programme is an important programme of the Government of India with a
vision to transform India into a digitally empowered society and knowledge economy.
“Faceless, Paperless, Cashless” is one of professed role of Digital India. As part of promoting
cashless transactions systems and converting India into less-cash society, various methods of
digital payments are available. They are as follows

1. Cheque

The cheque is one of the oldest or conventional methods of cashless payment mechanism. It
is a well-known method to everyone. In this method, you issue a cheque for the specific
amount to someone else. The cheque gets deposited in the respective bank account. The bank
processes a payment through a clearing house. The whole transaction done through cheque
gets recorded and there is a document of payment. However, but sometimes cheque payments
get dishonoured due to signature mismatch or insufficient fund in bank account. In order to
avoid such problem, you can use other cashless payment options.

2. Demand Draft
21
Demand draft is another primary way of cashless transaction. It is a very safest method to
receive payment from anyone. Demand draft (DD) never gets defaulted as it is signed by the
banker. The drawbacks of DD and cheque are you need to visit a bank in order to deposit
cheque and demand draft. The clearance of cheque or DD takes additional time.

3. Online Transfer- NEFT or RTGS

The third simplest way for the cashless transaction is online transfer using NEFT or RTGS. In
order to do online money transfer, you need internet banking facility. Online transfer using
NEFT or RTGS is comparatively faster than Cheque or DD. Online transfer can be done from
anywhere using internet facility.

4. Credit Card or Debit Card

Credit card or Debit card is another method of cashless payment. The usage of credit card and
debit card was limited in India compared to other developed countries in the world. However,
usage of credit card and debit card is increasing now a day. The limitation of this payment
method is an availability of swipe card facility (POS) at merchant end.

5. E-Wallets

E-wallet means Electronic Wallet is another cashless payment options are available for
people. E-wallet can be used to purchase products or services starting from grocery to airline
tickets. In order to use E-wallets customer and merchant, both require a smart phone with
active internet connection. The most popular example of E-wallet is PayPal. Apart from
PayPal, you can also use Pioneer, TransferWise, Skrill, PayZa and others. After registering
for E-wallet you need to link your credit card or debit card with your E-wallet id. You can
use E-wallet for fund transfer from one account to another account or online shopping. It is a
simplest cashless method.

6. Mobile Wallets

22
The next cashless payment option is a mobile wallet. You do not require debit card, credit
card or internet banking password for making payment using a mobile wallet. Just load
money in your wallet via IMPS and use it on the move. You can download mobile wallet app
from play store in smart phone. Some examples of mobile wallets are Paytm, PayUMoney,
Oxygen, Lime, Mobi Kwik etc.

7. UPI Apps

UPI is a mobile payment method which allows you to do different financial transactions on
your smart phone. UPI allows you to send or receive money using virtual payment address
without entering bank information. Merchants can enrol with banks to accept payments using
UPI. Like in the case of a POS machine, the merchant would require a current account with a
bank to accept UPI payments. The examples of few UPI Apps are SBI Pay, ICICI Pocket,
Axis Pay UPI App, Union Bank UPI App, PNB UPI, PhonePe, TranZapp etc.

8. Gift Card

The next cashless payment system is a gift card. Gift Card is a readymade card and can be
purchased from a merchant or from the bank. The gift card is loaded with a fix cash amount
you can purchase any item from the specific vendor by using a gift card.

9. Aadhaar Enabled Payment System

Aadhaar Enabled Payment System (AEPS) is one of the better and transparent cashless
payment methods. AEPS is like Micro ATM, it uses smart phone and a finger-print scanner
for the transaction. In order to use this facility, it is compulsory to link your Aadhaar card
number to your bank account. You can use AEPS in order to perform transaction like
Aadhar-to-Aadhar fund transfer, Cash withdrawal, Cash deposit etc.

10. Unstructured Supplementary Service Data

You can use USSD cashless method if you don’t have a smart phone or internet connection.
Unstructured Supplementary Service Data is mobile banking service. From any mobile

23
phone, you can dial *99# and use this service. You can do all these things which are available
to a person with smart phone and internet connection. Almost all banks including SBI, ICICI,
BOB, Axis Bank and PNB support USSD payment option.

BENEFITS OF CASHLESS ECONOMY

1) Transparency in transaction:

Needless to say, electronic dealings or plastic money always leaves a digital impermeable
valuable for both the tax payer (consumer) and the tax collector (government). It will curb
generation of black money.

2) Financial inclusion:

The will to have a cashless economy will promote financial attachment of the people. It will
require the government to connect all the households with a bank and plastic economy.

3) Reduced maintenance costs:

24
The logistics and supply chain of cash is estimated the exchequer affluence. The amount of
money mandatory in printing cash, its storage, conveyance, distribution and perceiving
imitation currency is huge. Concentrated instances of tax escaping because it is financial
institutions-based economy imprints are left.

4) Higher revenue:

Unoriginal advantage of transparent transactions is collection of tax will increase. Thus,

producing higher income for government this in turn will be changes into public welfare
policies and schemes.

5) Lower transaction costs:

Digital business is a boon in turns of handling cost and waiting time. If fulfilled appropriately
it will increase the fasting and production rates and there by cultivating the economy.

6) Taxation:

With lesser availability of hard cash at homes and more in banks, there is lesser scope of
hiding income and evading taxation and when there are more tax payers are ultimately
lending to a lesser rate of taxation for the whole country.

7) Less availability for illegal activities:

When people are encouraging to go cashless, there is lesser cash available with the people
and there won’t be a means to invest in other activities to use the ideal cash. Channels like
HAVALA (illegal remittance) will ultimately suffer the brunt of a cashless economy.

8) Convenience:

The easy of conducting financial transactions is probably the biggest motivator to go digital.
You will no longer to carry wads of cash, plastic cards and even queue up for ATM
withdrawals. It’s also a safer and easier spending option when you are travelling.

9) Tracking spends:

If all transactions are on recorded, it will be very easy for people to keep track of their
spending. It will also help while failing income tax returns and in case of a security, people
will find it easy to explain their spending. Reduced red tapism and bureaucracy: With
cashless transactions through electronic means the wire transfers are tracked and people are
accountable which in turn reduces corruption and improves service time.

25
10) Hygiene:

Soiled, tobacco-stained notes full of germs are an average in India. There are many such
happenings in our lives where we significantly or innocently give and take germs in the form
of rupee notes. This could be circumvented if we move towards cashless economy.

11) Delinquent of soiled /fake currency:

In cashless economy there will be no delinquent of soiled notes or fake currency reduced
costs of functioning ATM’S. Speed and consummation of operations for customers, no delays
and columns, no connections with bank staff’s mandatory.

CHALLENGES OF CASHLESS ECONOMY:

1) Costly swipe machines:

Swipe machines are not subsidy free. It can only be afforded by rich shop keepers. It cannot be
expected from an auto driver or normal grocery seller to afford swipe card machines besides many
street vendors, shop keepers don’t know how to use swipe machines.

2) Language Barrier:

26
Internet is an English based platform. The details on the plastic card are also in English. The
message received on mobile regarding transaction is also in English. Therefore, it is required
to use multiple languages regarding these processes or make everyone learn English.

3) Low Literacy Rule:

Low literacy rate hinders the accessibility of banking services. Citizens should not only
know how to read and write but also possess basic ICT literacy to fully enjoy the benefits of
e-payments.

4) Few Banks in villages:

The capital city New Delhi alone has about 20 HDFC bank branches. There are several
villages and Tehsils that don’t even have one. More the banks, more the cash deposits in
accounts. Banks in villages should be helpful in teaching the residents the process, usage and
benefits of plastic cards.

5) Digital Literacy:

More than half of the nation still does not know how to use a computer. People in rural areas
still don’t know about smart phone. Besides, there is lack of internet facilities and without it a
country cannot become cashless. There are still many rural and urban areas where there the
access of having 2G network is very difficult. Moreover, the cost of Internet access is very
high as compared to developed countries.

6) Transactions are mainly in cash:

Nearly 95% of transactions takes place in cash. Large size of informal/unorganized sector
entities and workers prefer cash-based transactions. They don’t have required digital and
fintech literacy.

7) Not enough debit or credit cards:

India has over 24 million credit cards and over 660 million debit cards, now interesting bit
about this number is that most of the people who have a debit or credit card have multiple

27
cards. This means the actual number of people who have the debit or credit card is less. This
also means that nearly half of the people in India don’t have a bank card.

8) Not enough smart phones:

India has nearly 250 smart phone users right now, a number that is supposed to grow to
around 350 million in 2017. It is just not enough to support an economy that aims to do major
transaction through e-wallet. India has over 1200 million people. And that shows the number
of people without a smart phone is just too big in India at the moment.

9) No law on data security:

A lot of people don’t trust the cashless transactions because there is no law security promises
them security. What if all your transactions are done electronically and there is a breach,
revealing all the purchases and transfers you have made out in public.

10) Sorry state of cyber security:

Just a few months ago data related to over 32 lakhs debit cards was leaked from the network
that connects all Indian banks. The state of cyber security in India is poor, very poor.
Majority of Indian ATM’s still run-on windows XP, an operating that is 14 years old and is
no longer supported by Microsoft.

28
 CHAPTER: 3

RESEARCH METHODOLOGY

The study is based on secondary sources of data/information. Different books, journals,

newspapers and relevant websites have been consulted in order to make the study an effective
one A cashless economy is an economy in which all types of transactions are carried out
through digital means. It includes e-banking (mobile banking or computers), debit and credit
cards, card-swipe or point of sales (POS) machines and digital wallets. The RBI and the
government are making several efforts to reduce the use of cash in the economy by
promoting the digital or payment devices including prepaid instruments and cards. RBI’S
effort to encourage this new varieties of payment and settlement facilities aims to achieve the
goal of a ‘less cash’ society.

A very important factor in the running of such an economy is the assurance that the people’s
money is safe in banks. Also, going cashless is much more appropriate but, it is not just the
earliest way to manage, but also brings about lot more photograph in financial system.
Cashless economy helps in restriction black money, depresses tax fudging and eventually
lends to reduce funding for illegal trades and activities counting terrorism. Thus because of
this growing effect of the benefits, many developing economies are accepting the cashless
method and are going digital. A cashless society becomes a popular alternative to tackle the
cash usage liability. Cashless transaction economy does not mean the shortage of cash rather
it indicates a culture of people settling transactions digitally. In a modern economy, money
moves electronically. Hence the spread of digital payment culture along with the expansion
of infrastructure facilities is needed to achieve the goal.

The changes have created perfect market conditions for alternative digital payment system, in
addition to existing e-wallets and debit or credit cards. These are not just the basic banking
apps or website either. The national payments corporation of India, together with the RBI,
has launched UPI (“UNITED PAYMENT INTERFACE”), which powers multiple accounts
from participating banks, and offers several banking services all in a single mobile
application. A step in the right direction certainly, but not one without its problems. Although
India has around 220million smartphone users as of February 2016, there is still a long way
to go until 100% of population has mobile internet access.

29
On November 8th, government withdrawn INR 500 and INR 1000 notes-two highest
denominations in circulation. Main objectives were to fight counterfeit money and black
money. The action has given tremendous boost to cashless transactions has cards based
digital payments were not hindered when all high denominations cash transactions suffered
because of absence of high denomination currencies. A cashless society describes an
economic states whereby financial transactions are not conducted with money in the form of
physical bank notes or coins, but rather through the transfer of digital information (usefully
an electronic representation of money) between the transacting parties

OBJECTIVE

1. To study the concept of cashless economy.

2. To know the benefit and challenges of cashless economy.

3. To know the modes of cashless transactions.

4. To find difficulties and challenges faced by Indian population for adoption of

cashless economy

Statement of Problem

Digital Payments will help the country grow and will also help exercise a control on the
unaccounted money transactions. It is easily one of the biggest concerns in a rapidly growing
country that’s fighting inequality and corruption. A conscious shift to use digital solutions
from enterprises and individuals at large, is what will ensure that the next billion Indians are
more accepting of technology’s advantages. This research is conducted to understand, on an
individual level, the mindsets of the citizens of the country regarding the shift from a cash-
based economy towards a less cash economy

Limitations of the Study

30
1) India’s population resides in the rural areas, and the research is limited only to the urban

population.

2) Confined to only the people of a geographical area in the urban India.

3) The sample size is also limited to only 129 samples which also restricts the research.

4) The time taken for the research also acts as a restrain for the research.

Plan of Analysis:

The study has adopted analytical method for research. The data collected through
questionnaires is classified as per their relation to a fixed end-factor and the data has been
tabulated and analysed to understand the perception of individuals towards cashless, less cash
and cash economy. Such classified and tabulated data has been represented in the form of
graphs and charts.

Data Collection Design:

The data for this research is collected from both primary source of data and secondary
sources of data. The primary data is the data that a researcher collects themselves using
various techniques like questionnaires, interviews, observation, etc. For our research we have
used questionnaires as a mode of collection of data. Various articles have been used as
secondary data for the research

31
 CHAPTER: 4

Data Analysis, Interpretation & Presentation

*) Data analysis is a process of inspecting, cleansing, transforming, and modelling data with
the goal of discovering useful information, informing conclusions, and supporting decision-
making.

[1] Data analysis has multiple facets and approaches, encompassing diverse techniques under
a variety of names, and is used in different business, science, and social science domains.

[2] In today's business world, data analysis plays a role in making decisions more scientific
and helping businesses operate more effectively

[3] Data mining is a particular data analysis technique that focuses on statistical modelling
and knowledge discovery for predictive rather than purely descriptive purposes, while
business intelligence covers data analysis that relies heavily on aggregation, focusing mainly
on business information.

[4] In statistical applications, data analysis can be divided into descriptive statistics,
exploratory data analysis (EDA), and confirmatory data analysis (CDA).

[5] EDA focuses on discovering new features in the data while CDA focuses on confirming
or falsifying existing hypotheses.

[6] Predictive analytics focuses on the application of statistical models for predictive
forecasting or classification, while text analytics applies statistical, linguistic, and structural
techniques to extract and classify information from textual sources, a species of unstructured
data. All of the above are varieties of data analysis.

*) Data analysis and interpretation are the process of assigning meaning to the collected
information and determining the conclusions, significance, and implications of the findings.
The steps involved in data analysis are a function of the type of information collected,
however, returning to the purpose of the assessment and the assessment questions will
provide a structure for the organization of the data and a focus for the analysis.

The analysis of NUMERICAL (QUANTITATIVE) DATA is represented in mathematical

terms. The most common statistical terms include:

32
1) Mean – The mean score represents a numerical average for a set of responses.

2) Standard deviation – The standard deviation represents the distribution of the responses
around the mean. It indicates the degree of consistency among the responses. The standard
deviation, in conjunction with the mean, provides a better understanding of the data.

3) Frequency distribution – Frequency distribution indicates the frequency of each

response. For example, if respondents answer a question using an agree/disagree scale, the
percentage of respondents who selected each response on the scale would be indicated. The
frequency distribution provides additional information beyond the mean, since it allows for
examining the level of consensus among the data

Interpretation

Participants Age

AGE NO. OF RESPONDENT’s PERCENTAGE (%)

17 01 1.6
18 04 6.6
19 03 4.9
20 14 23
21 13 21.3
22 08 13.1
23 03 4.9
24 04 6.6
25 05 8.2
26 03 4.9
27 01 1.6
48 02 3.2

The above table shows the Age-wise distribution of the Respondent’s

33
1.6% Respondent are from 17 Age, 6.6% Respondents are from 18 Age, 4.9% Respondents
are from 19 Age, 23% Respondent are from 20 Age, 21.3% Respondent are from 21 Age,
13.1% Respondent are from 22 Age, 4.9% Respondent are from 23 Age, 6.6% Respondent
are from 24 Age group, 8.2% Respondent are from 25 Age group, 4.9% Respondent are from
26 Age, 1.6% Respondent are from 27 Age, 3.2% Respondent 48 Age

Q1) Mode of Transactions Used for Day-To-Day Transactions (Currently)

The above Pie-Chart Shows the DAY - TO -DAY Transaction’s

SERVICES NO. OF RESPONDENT’S PERCENTAGE (%)

34
 Physical Bank Note 21 34.4

Digital Payment 12 19.7

Online Payment 26 42.6

Cheques 02 3.3
34.4% of the Respondents uses Physical Bank Note Services on regular basis,19.7% of the
Respondents uses Digital Payment Services, 42.6% of the Respondents uses Online Payment
Services, 3.3% of the Respondents uses Cheques Services

Q2) Mode of transactions used for large scale transactions (Currently)

SERVICES NO. OF RESPONDENTS PERCENTAGE (%)

Physical Bank Notes 08 13.1
Digital Payment 11 18
Online Payment 15 24.6
Cheques 27 13.1

The above Pie-Chart Shows the LARGE-SCALE Transaction’s

13.1% of Respondent uses Physical Bank Note Services, 18.3% Respondents uses Digital
Payment Services, 24.6% of Respondent uses Online Payment Services, 13.1% of
Respondent uses Cheques

Q3) Acceptance level towards a Cashless Economy?

35
 OPINION NO. OF RESPONDENTS PERCENTAGE (%)
Willing 42 68.9
Un-Willing 07 11.5
Reluctant 12 19.7

The above Pie-Chart Shows the ACCEPTANCE TOWARD CASHLESS ECO

68.9% of the Respondent are Willing to go Cashless Economy, 11.5% of the Respondent are
Un-Willing foe Cashless Economy, 19.7% of Respondents are Reluctant about Cashless
Economy

Q4) Level of difficulty in online transactions

ONLINE TRANSACTION NO. OF RESPONDANTS PERCENTAGE (%)

Simple 45 73.8
Difficult 16 26.2

36
The Above Pie-Chart shows DIFFICULTIES IN ONLINE TRANSACTION

73.8% of Respondents are finding it Simple to do Online Transactions, 26.2% of

Respondents are finding it Difficult to do online Transactions

Q5) Level of discouragement due to transaction charges

TRANSACTION CHARGES NO. OF RESPONDENTS PERCENTAGES (%)

HIGH 28 48.7
LOW 33 53.3

The Above Pie-Chart is of DISCOURAGEMENT DUE TO TRANSACTION CHARGES

48.7% of Respondents are Discouraged by the High Transactions Charges, 53.3% of

Respondents are Discourage on Low Transaction charges

37
Q6) Online applications used

APPS NO. OF ESPONDENTS PERCENTAGES (%)

PayPal 03 4.9
PhonePe 16 26.2
Paytm 23 38.3
BHIM 02 3.3
Tez 01 1.6
Other 08 13.3
None 08 11.7

The Above Pie-Chart is of ONLINE APPLICATION USED

4.9% of Respondents uses PayPal, 26.2% of Respondents uses PhonePe, 38.3% of

Respondents uses Paytm, 3.3% of Respondents uses BHIM, 1.6% Respondents uses Tez,
13.3% Respondents uses Others Online Application, 11.7% of the Respondents doesn’t use
any Online Application

38
Q7) Why would you adopt a cashless payment system?

NO. OF RESPONDENTS PERCENTAGES (%)

Convenience 20 31.7
Discounts/ Cashback Reward 21 33.3
Easy Tracking of Spends 13 27.7
Shortage of Currency Notes 08 13.3

The Above Pie-Chart is WOULD YOU ADOPT A CASHLESS PAYMENT SYSTEM

31.7% of Respondents uses Cashless Payment for the Convenience, 33.3% of Respondent
uses Cashless Payment for Discount/ Cashback Reward, 27.7% of Respondents uses Cashless
Payment for Easy Tracking of Spends, 13.3% of Respondents uses Cashless Payment for
Shortage of Currency Notes

Q8) What is your biggest concern around cashless payments?

CONCERNS NO. OF RESPONDENTS PERCENTAGE (%)

Security (Risk of Identity 30 49.2
Theft)
Poor Internet Connectivity 10 16.4
Merchant Acceptance 05 8.2
Costs 05 8.2
Lack of Tech Know How’s 11 18

39
The above Pie-Chart shows OUR CONCERN REGARDING CASHLESS PAYMENT

49.2% of Respondents are Concern with Security, 16.4% of Respondents are concern with
Poor Internet Connectivity, 8.2% of Respondents are concern with Merchant Acceptance,
8.2% of Respondents are concern with Costs, 18% of Respondents are concern with Lack of
Tech Know How

Q9) What has been your preferred mode of payment

PREFERENCE NO. OF RESPONDETS PECENTAGE (%)

Net-Banking 13 21.3
Credit/ Debit Cards 14 23
Cash 19 31.1
E-Wallet/ Mobile app 14 23
Cheques 01 1.6

40
The above Pie-Chart shows PREFERRED MODE OF PAYMENT

21.3% Of Respondents Prefer Net-Banking, 23% of Respondents prefer Credit / Debit card,
31.1% of Respondents Prefer Cash, 23% of Respondents Prefer E-Wallet/ Mobile App, 1.6%
of Respondent Prefer Cheques

Q10) Have you installed antivirus or malware protection on your phone?

ANTI-VIRUS NO. OF RESPONDETS PERCENTAGE (%)

Yes 22 36.7
No 38 63.3

The Above Pie-Chart is About MOBILE PROTECTION

41
63.3% of Respondents do not have Anti-Virus on their Mobile Phones, 36.7% of
Respondents do have an Anti-Virus on their Mobile Phones

Q11) How often do you change device passwords, PIN of debit/credit cards?

DURATIONS NO. OF RESPONDETS PERCENTAGE (%)

Once in 6 Months 16 26.7
Once in a Year 14 21.7
Every Month 04 6.7
Never 27 45

The above Pie-Chart shows us DURATION AT WHICH THEY CHANGE CREDIT/ DEBIT
PIN

26.7% of Respondents Changes their Pin 6 Months, 21.7% of Respondents Changes their Pin
in a Year, 6.7% of Respondents Changes their Pin Every Month, 45% of Respondents Never
Change their Pin

42
Q12) What can be safely shared when you do cashless transactions?

DOCUMENTS NO. OF RESPONDETS PERCENTAGE (%)

Aadhaar Card 20 32.8
P.A.N. 01 1.6
Bank A/c No 03 4.9
Credit /Debit Card No. 01 1.6
All of the Above 12 19.7
None of these 24 39.3

The Above Pie-Chart shows WHAT CAN BE SHARED WHEN YOU DO ONLINE
TRANSACTION

32.8% of Respondents consider sharing their Aadhaar Card to be safe for Cashless
Transactions, 1.6% of Respondents consider sharing their PAN to be safe for Cashless
Transactions, 4.9% of Respondents consider sharing their Bank Ac No to be safe for Cashless
Transactions, 1.6% of Respondents consider sharing their Credit & Debit Card to be safe for
Cashless Transactions, 19.7% of Respondents consider sharing their All the Documents to Be
safe for Cashless transactions, 39.3% of Respondents Do not want to share any Documents

Q13) Do you access public Wi-Fi from Phone or Laptop?

USE OF PUBLIC Wi-Fi NO. OF RESPONDETS PERCENTAGE (%)

Yes 17 27.9
No 44 72.1

43
The Above Pie-Chart shows us the Use of Public Wi-Fi

27.9% of Respondents Do use Public Wi-Fi to do their Cashless Transactions,

72.1% of Respondents Do Not use Public Wi-Fi to do their Cashless Transactions

Q14) Do you store Card Detail on your phone or Laptop?

CARD DETAIL IN PHONE NO. OF RESPONDETS PERCENTAGE (%)

Yes 40 65.6
No 21 34.4

The Above Pie-Chart shows who Store Card Detail on their Device

44
65.6% of Respondents Do Store Card Detail on their Personal Device (Phone / Laptop),
34.4% of Respondents Do Not Store Card Detail on their Personal Device ( Phone / Laptop)

Q15) Probable time for India to become a cashless economy by the consumers

YEARS NO. OF RESPONDETS PERCENTAGE (%)

1 Year 05 8.2
3 Years 06 9.8
5 Years 19 31.1
10 Years 15 24.6
More than 10 Years 16 26.2

The Above Pie-Chart show us THE YEAR IT WOULD TAKE TO BE COMPLETELY

CASHLESS

8.2% of Respondent Think it would take 1 Year to Go Completely Cashless, 9.8% of

Respondent Think it would take 3 Years to Go Completely Cashless, 31.1% of Respondent
Think it would take 5 Years to Go Completely Cashless, 24.6% of Respondent Think it
would take 10 Years to Go Completely Cashless, 26.2% of Respondent Think it would take
more than 10 Years to Go Completely Cashless.

45
 CHAPTER: 5

Findings, Conclusion & Suggestion

1) FINDING:

 Consumers are not familiar with all the electronic payment facilities available. Even if
they knew, the usage of digital transactions boosted only after demonetization. They
realize that the cost of going digital is high and hence expects incentives and discounts for
using such electronic payment systems. Consumers and bankers believe security and tech
knowhow to be made efficient for effective usage of digital transactions According to the
sample survey, it is revealed that India is not completely ready for cashless economy. The
preparedness required to become a cashless economy are adequate literacy, strong
security, internet facility and effective technical support. The hurdles in the path of India
are illiteracy, public acceptance and poor infrastructure.

 The interviews conducted with bank officials and managers reveal that, India is not fully
ready to become a cashless economy, strong aversion from customer to accept fund
through banking channels.

 A secured structure to be made for clients with good user interface which should reduce
security risks. The bankers feel that, awareness for digital payments should be increased.
Free service should be provided to help incompetent public for usage of the electronic
transactions

 And there should be incentives like discounts/cashbacks which will motivate digital
transactions among consumers and businessman. Technical infrastructure should be
improved to facilitate digital transactions. Educating the lower section of India to increase
the smooth performance. Also, the bankers suggested that tight firewall is required for the
safety of customers, which concerns customers the most as we found the by the survey
conducted.

46
 There is a slow movement towards usage of online applications, and payment modes for
any transactions, this could be due to the ease of internet access and the strong security
features added onto applications, post demonetisation.

 For larger transactions, it was observed that the sample population mostly preferred
online transactions, showing a slow movement towards a less Cash economy.

 For travel expenses incurred abroad, most of the sample population use technology, and
online payment modes for transactions

 From the sample population, it can be observed that half of the individuals make online
payments daily.
 Paytm, PayPal, PhonePe, are the widely used phone applications, by majority of the
sample population.

 More than half of the sample Population agreed to have found the phone applications to
make transactions to be useful.

 Majority of the population find it discouraging to use online payment applications, since
it has a factor of transaction charges, while making the payment.

 Very minute number of the sample population have claimed online transactions are
difficult to implement. Most of the population have agreed to find it simple to make
online payment.

 Acceptance towards a completely cashless economy would cause inconvenience to

majority of the population, as making small payments would be easier with physical
notes. However, most of the sample population are willing to move towards a less cash
economy, if implemented.

 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

47
 countries are already adopted payment system in an economy, India is in its developing
phase and most of the population are dependent on cash-based transaction because of
unavailability of proper internet connectivity, lack of information and knowledge of
financial transaction, charges on card payments and un operational bank accounts. India
needs to come up with the new policies of electronic 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 digitalization of payments in India.

 If we look at the overall situation of progressing India toward a new era of technology
application, these findings identify several opportunities and also challenges in favouring
or opposing the inevitable consequences of shifting to a cashless economy. For proper
quantitative research, it is necessary to work through factual data with no personal biases.
Various papers reviewed are purely theoretical; their disadvantage is that the real picture
of the study needs to come out, which is very difficult to achieve in a theoretical paper.
The originality of this research is based on the collection of data from consumers who are
actually using the services. So, considering all the points, the structure of this paper is
based on using quantitative research methods.

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 2) CONCLUSION:

The future of the cashless India looks pretty promising as the response of the country
people towards this move of the government and the support towards it is a clear indication
that the government’s move is likely to succeed. The transparency in the economy will
increase through the e-commerce transactions and the digital payment gateways which will
increase the GDP of the economy. This will increase the credibility of the country and make a
rise in investments. This step of cashless is truly going to create ripples of big success and it
will help to attain vision of Prime Minister Modi’s vision of Digital India

If we look at the overall scenario of establishing the cashless economy, it is beneficial 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. Parity between cash and digital money is probably impossible
to achieve, but there are means of getting closer to it by creating an incentive structure for
that switch, and that involves making cash more expensive than cashless, and better
enforcement of digital economy. It will be better to say that India at this point of time has to
go for less cash economy rather than cashless economy. The continuous march towards less
cash economy will lead to cashless economy in the country in near future

A less cash economy is feasible, practical and much more efficient than a cash-based

49
economy and a completely cashless economy. It can be observed that people are open
towards the concept of a less cash economy and find it easier to adapt to. A less cash
economy would boost the Nation’s economy as the cost of making and handling paper money
will be reduced. A less cash economy reduces terrorist activities as most of the terrorist
activities are fuelled by unaccounted money in hard cash and helps control the problem of
fake money. India is one of the largest markets for smartphones and mobile applications,
providing a easy transition towards a less cash economy. The local markets have already
accepted the transition into paperless transactions. Banks and Payment Gateways are soon
shifting towards payments through smart phones. Therefore, it can be observed from the
research that both at the individual and national level, there is a conscious effort to move
from a cash-based society towards a cashless economy

The study concludes that cashless transaction economy is one of the good and strong
decisions of government of India. Many people accept the concept of cashless transactions
system. It helps to fight against major illegal or unethical activities in the economy like
terrorism, corruption, money laundries etc. But main problems are the working of cash less
transaction in India is cyber-crime and illegal access of customer’s data. Therefore, it’s
important to strengthen internet security from protection against online mischievous.
Customers and small retailers are faced the high degree of risk and problems in the
application of cash less transaction. The main reason is low literacy rate in rural area.
Government should be educated towards cash less transactions services. Government tries
to promote customers mind towards the risk factors. Cashless transaction helps to develop the
Indian economy is stronger. Hence, each and every one should access and use the digital
based transaction. The Government to need more efforts financial literacy campaign time to
time to make population aware of benefits of electronic payments.

50
We can conclude from the study that the recent trends in technology and supportive Indian
government are driving India toward a cashless economy. In the past years after
demonetization, mobile payment services’ popularity has significantly increased. Two types
of amenities have been trending over the years. These are wallet-based and UPI based
platforms. The online pattern is generally stronger in metro cities, but the Indian government
is focusing on extending the rural implementation to the urban environment. Modi’s
government focus is toward greater use of technology and consequent reduction in cash
usage, which will lead to a decrease in corruption. The new system will not only reduce the
flow of ‘black money’, but will also be efficient for tracking taxable entries over time. The

electronic wallet stores money in digital format for immediate transactions, while UPI makes
the use of interbank connections in which payment gets directly debited from the account of
the consumer

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3) Suggestion:

1) Equitable improvement of infrastructure for bringing in effective changes and thus

decreasing the disparity in the development of rural and urban regions.

2) Mere launching of schemes and campaigns regarding cashless doesn’t seems to be

worthwhile. To make these schemes more impactful, some sort of marketing tools like Bank
Mitra or exhibition and camps in rural areas should be set-up to make these schemes fruitful.

3) Online transactions should be made as cheap as possible, eliminating all sort of extra
charges so that more and more peoples switch from cash based to cashless economy.

4) Adequate security mechanisms should be put in place to safeguard the interest of

consumers against dubious and fraudulent practices of fraudsters.

5) Giving an indirect tax rebate for using cashless methods of payment, which brings parity
between cash and cashless. Even online, merchants can be incentivised to charge less for
digital payments, and more for cash on delivery.

6) The movement towards a less cash economy is slow, but the country is getting there. The
Government should take proper initiatives to make the transition smoother and faster.

52
7) Further simplifying payment applications on the phones, and online payment methods will
help the senior members as well as individual’s illiterate to technology, participate and
contribute towards a less cash economy, or a cashless economy.

8) Since travelling has become an extensive and an expensive affair, if payments could be
made online, tracking the same would be easier. Also, the Tourism Departments of all states
can contribute to a changing economy by encouraging online payments and making a
comprehensive mobile application for facilitating simpler transactions.

9) Transaction charges should be minimized to encourage online transactions.

53
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