Cashless Economy

SYNOPSIS
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 banking through computers), debit and credit
cards, card-swipe or point of sales (POS) machines and digital wallets.
Cash may no longer be king. 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. Digital transaction or cashless transaction brings in better transparency, scalability and
accountability. This paper focus on concept of cashless economy, pros & cons and to know the
modes of cashless transactions. The digital India is a leading programme of the government of
India with a vision to convert India into a digitally authorised society and knowledge economy.
“Faceless, Paperless, Cashless” is one of the declared rules of digital India. Cashless economies, as
the name suggests, are those that run frequently on plastic or digital money.
The main objective of this study is to find out if India is actually ready for a cashless society and to
know what are the challenges, benefits and effect of cashless society on the Indian economy.
INTRODUCTION
India is an enthusiastic effort to move towards a cashless transaction economy by minimising the
use of corporal cash. Digitalisation 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, 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 carries 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 other
individual without having cash accessible. Square is an innovation that allows primarily small
business to receive payments from their clients.
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. A cashless economy is secure, it is clean.
OBJECTIVES OF THE STUDY
 To know the challenges of cashless economy in India
 To know the benefits of cashless economy in India
 To find out if India is ready for the change from cash to cashless society in India
 To find the advantages and disadvantages of cashless society in India
 To know the modes of cashless economy
 To study the concept of cashless economy
RESEARCH METHODOLOGY
In order to conduct this study, 33 respondents were interviewed Random sampling method was used to
select the sample. All the data required for this work is obtained from primary and secondary sources.
Primary data collected from interview and mainly structured questionnaire has been used as a primary
instrument. Secondary data have been collected from the websites on the internet.
DETAILED INFORMATION ABOUT THE TOPIC
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.
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.
ANALYSIS AND INTERPRETATION
The main purpose of Analysis and Interpretation is to present the financial data in such a manner
that is easily understandable and self explanatory. This not only helps the accounting users to assess
the financial performance of the business over a period of time but also enables them in decision
making and policy and financial designing process.
TABLE 1: cashless payments reduce the risk of fake currency
Opinion No. of respondents percentage
Strongly agree 21 65.6
Agree 7 18.8
Neutral 3 9.4
Disagree 1 6.3
Strongly disagree 0 0
total 32 100
Nearly 66% of respondents say that they strongly agree, nearly 19% say that they agree, nearly
10% have a neutral opinion, nearly 7% say that they disagree and none of them strongly disagree
that cashless payments reduce the risk of fake currency
Table2: cashless payments prevent money laundering
Agree 10 31.3
Neutral 3 9.4
Disagree 3 7.1
Strongly disagree 1 6.3
total 32 100
Nearly 47% of respondents say that they strongly agree , nearly 31% say that they agree, nearly
10% have a neutral opinion, nearly 7% say that they disagree and nearly 6% of them strongly
disagree that cashless payments prevent money laundering
Table3: cashless payments reduce corruption
Agree 4 12.5
Neutral 11 34.4
Disagree 5 15.6
total 32 100
Nearly 31% of respondents say that they strongly agree ,

nearly 12% say that they agree, nearly 35% have a neutral
opinion, nearly 16% say that they disagree and nearly 6%
of them strongly disagree that cashless payments reduce
corruption
Table4: stimulate economic growth
Agree 5 15.6
Neutral 10 31.3
Disagree 1 3.1
total 32 100

opinion, nearly 3% say that they disagree and nearly 3% of
them strongly disagree that cashless payments stimulate
economic growth
Table5: transactions of funds get easier
Agree 7 21.9
Neutral 4 12.5
Disagree 2 6.3
total 32 100
Table6: reduced cash related crimes
Agree 7 21.9
Neutral 1 3
Disagree 6 18.8
total 32 100

cash related crimes
Table 7: ease of international transaction
Agree 9 28.1
Neutral 4 12.5
Disagree 4 12.5
total 32 100

cash related crimes
Table 8: reduced cost on currency production

Agree 9 28.1
Neutral 8 25
Disagree 2 6.3
total 32 100

opinion, nearly 6% say that they disagree and none of
them strongly disagree that cashless payments reduce cost
on currency production
Table 9: less time consuming
Agree 10 31.3
Neutral 3 9.4
Disagree 0 0
total 32 100

opinion, none of them disagree and none of them strongly
disagree that cashless payments are less time consuming
Table 10:cyber security

Agree 7 21.9
Neutral 7 12.5
Disagree 4 12.5
total 32 100

them strongly disagree on cyber security
Table 11:rise in public expenditure
Agree 9 28.1
Neutral 7 21.9
Disagree 2 6.3
total 32 100

opinion, nearly 6% say that they disagree and 3.1% of
them strongly disagree that cashless payments rise public
expenditure
Table 12: identity thefts
Agree 10 31.3
Neutral 3 9.4
Disagree 5 15.6
total 32 100

them strongly disagree that cashless payments create
identity thefts
Table 13: illiteracy

Agree 6 19.4
Neutral 7 22.6
Disagree 5 16.1
total 32 100

opinion, nearly 16% say that they disagree and 3% of them
strongly disagree that cashless payments is a challenge for
illiterate people
Table 14: charge on payments
Agree 15 49.9
Neutral 5 15.6
Disagree 1 3.1
total 32 100

strongly disagree that cashless payments is a challenge
because of the charges on payments
Table 15:inconvinienced population

Agree 7 21.9
Neutral 4 12.5
Disagree 7 21.9
total 32 100

opinion, nearly 30% say that they disagree and 10% of
them strongly disagree that cashless payments is a
challenge because of the inconvenienced population
Table 16:fear of losing control

Agree 9 28.1
Neutral 5 15.6
Disagree 4 12.5
total 32 100

because of the fear of losing control
Table 17:low connectivity in some areas

Agree 6 18.8
Neutral 3 9.4
Disagree 2 6.3
total 32 100
Nearly 60% of respondents say that they strongly agree , nearly 19% say that they agree, nearly
9% have a neutral opinion, nearly 6% say that they disagree and 6% of them strongly disagree that
cashless payments is a challenge because of the low connectivity in some areas
Table 18:online frauds

Agree 8 25
Neutral 2 6.3
Disagree 2 6.3
total 32 100

because of the online frauds
Table 19:lack of trust in electronic transactions

Agree 9 29
Neutral 4 12.9
Disagree 2 6.5
total 32 100

because of the lack of trust in electronic transactions
Table 20:extreme dependency on cash

Agree 5 16.1
Neutral 10 32.3
Disagree 2 6.5
total 32 100

because of the extreme dependency on cash
Conclusion
In conclusion, the concept of a cashless economy in India is an inevitable transition that holds
immense potential for the nation's economic growth and development. While the adoption of
digital payments offers numerous benefits such as convenience, transparency, and efficiency,
it also comes with its fair share of challenges. The government's push towards a cashless
economy has witnessed significant progress, with increased digital transactions and a
growing infrastructure of online payment platforms. However, to fully realize the benefits of
a cashless economy, it is essential to address issues like digital literacy, cybersecurity, and
inclusivity. Additionally, promoting interoperability between different payment platforms and
ensuring robust technological infrastructure will further accelerate the country's shift towards
a cashless society. Overall, a well-executed and inclusive transition to a cashless economy
has the potential to reshape India's economic landscape, enhancing financial inclusion and
promoting a more transparent and efficient system for both businesses and individuals.
Images
Bibliography
1) @Monei.com
2) @wikipedia.com
3) Mahima pmjdy eco project
4) www.byju’s.com
5) www.civilsdaily.com
6) www.statista.com
7) www.jetir.com
8) www.google.com
9) www.indianera.com
10) www.tranzact.com
11) www.eletimes.com
12) www.civilsdaily.com
13) www.marketingweek.com
14) www.google.com
15) www.byjus.com

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Cashless Economy

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SYNOPSIS

Nearly 31% of respondents say that they strongly agree ,

Nearly 47% of respondents say that they strongly agree ,

Nearly 47% of respondents say that they strongly agree ,

Nearly 44% of respondents say that they strongly agree ,

Table 8: reduced cost on currency production

Nearly 40% of respondents say that they strongly agree ,

Nearly 60% of respondents say that they strongly agree ,

Opinion No. of respondents percentage

Nearly 44% of respondents say that they strongly agree ,

Nearly 41% of respondents say that they strongly agree ,

Nearly 44% of respondents say that they strongly agree ,

Opinion No. of respondents percentage

Nearly 40% of respondents say that they strongly agree ,

Nearly 31% of respondents say that they strongly agree ,

Opinion No. of respondents percentage

Nearly 34% of respondents say that they strongly agree ,

Opinion No. of respondents percentage

Nearly 38% of respondents say that they strongly agree ,

Opinion No. of respondents percentage

Table 18:online frauds

Nearly 31% of respondents say that they strongly agree ,

Table 19:lack of trust in electronic transactions

Nearly 45% of respondents say that they strongly agree ,

Opinion No. of respondents percentage

Nearly 50% of respondents say that they strongly agree ,

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