CASHLESS ECONOMY

The cashless economy is developed based on digital methods or programs towards the vision of digital India. India has faced several challenges to make a cashless economy such as “cash circulation”, “being costly to print”, “withdrawal of soiled currency in a timely manner”, “difficult to carry”, and so on which reduces the growth of the cashless economy. The national priority towards the transition of the monetary value is to empower digital means or a cashless economy. 

Overview of cashless economy 

The cashless economy refers to the use of digital payment methods for transactions through the processes of credit cards and net banking. 79% of Indians are responsible for making a cashless economic society through UPI systems. In order to promote cashless transactions, Banking cards, UPI, Mobile wallets, Internet Banking, Micro ATMs, etc. are mostly used across Indian society. The government of India is aggressively trying to drive the Digital economy to recover less cash flow that took place due to pandemic outbreaks. 

Readiness of India for adopting a cashless economy 

The argument on the readiness of India to adopt a cashless economy refers to the use of digital payments methods for various aspects. The scope for improving the cashless economy has been increased due to the Covid-19 as people are lacking to use physical banknotes for their daily lives. The money circulation across Indian society has declined by 23.31% due to the pandemic lockdown. This also includes that the overall printing volume of banknotes has been attenuated by 13% due to the sudden outbreak of Covid-19. The rate of UPI transactions has been improved up to 11% through private players such as Amazon pay, Google pay, PhonePe, WhatsApp pay, etc. This is also associated with the fact that UPI does not provide any restrictions for a minimum payment that helps for creating a cashless flow in Indian society. The real-time payments within 24*7 are included with the “zero service cost” process that makes it more beneficial for Indian society to adopt a cashless economy. 

Importance of cashless economy in Indian Society for improving GDP growth 

The cashless economy offers multiple discounts to the common people in the form of card transactions. The use of digital cards from multiple aspects allows promoting GDP growth with 0.1% by incorporating the role of the cashless economy in Indian society. Online shopping gets the easy use of digital purchase and payment options from debit and credit cards to net banking. 90% of transactions for digital purchases have a revolutionary move towards the cashless economy from the use of physical banknotes. According to the RBI reports, all the bank branches have increased “card swiping machines”, debit cards, and ATMs by 5% that enhancing the annual growth of GDP across the Indian society. The growth of GDP rate can be enhanced with digital payments through card transactions refers to the significance of a cashless economy. 

Digital payment methods in cashless India 

The digital payment methods that are mostly used in Indian society are Mobile wallets, Internet Banking, Digital cards, and Banking cards for enhancing less cash flow. This often includes that card transactions have been increased by 9.8% which has been controlled by Worldline India. The digital transaction has also been increased through “prepaid cash cards” and a mobile wallet up to 3% is contributed to improving the cashless economy across Indian society. 

Conclusion

The Indian government is required to take all the necessary steps towards the promotion of a cashless economy by policy considerations. Digital transactions have to be secured from any cyber-attacks. The government is required to establish collaborations with UPI systems. This includes the “zero service cost” process which helps to create fair cash flow and improve digital transactions. Access to electronic systems to make digital transactions is most important for improving the cashless economy in India.