Cashless economy is the term that is used to describe the situation wherein the flow of cash doesn’t exist within the economy. All the transactions are undertaken through electronic channels. For eg: money transfer through credit and debit cards. There are multiple factors that need to be taken into consideration when transitioning into a cashless economy, such as, awareness on different banking and e-transactions, technological tendencies to help the cashless economy and government interventions to promote the transition.
India has taken several measures to transition into a cashless economy such as demonetisation. This measure was originally meant to curb black money but was unsuccessful. However it did help India move towards becoming a cashless economy. After this measure, Paytm’s average users had increased by 2 million and Ola money also saw a 1500% increase in its e-wallet. Another measure was the introduction of the UPI (Unified Payment Interface) system. This system powers multiple bank accounts into a single mobile application. For eg: Google pay.
The Pradhan Mantri Jan Dhan Yojana was another initiative which made the transition easier. This was considered the most important monetary inclusion projects in the world. This project aims to result in complete monetary inclusion and offer banking offerings to all families in the country. This scheme guarantees admission to more than a few monetary offerings like availability of fundamental savings, financial institution accounts, get admission to need-primarily based totally credit, coverage and pension.
During this transition India may face some issues such as lack of adequate infrastructure and technology within the Indian society, limited usage of credit/debit cards and other issues. India being a heavily cash dependent economy and people being unaware of different online payment methods can make this transition bumpy but with the right resources and using social media in order to raise awareness and encourage people to make non-cash transactions, India will be well equipped to adapt towards the cashless economy.