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Cash has always been and will continue to be in high demand in various industries, including agriculture and allied industries, biotechnology, vehicles, cement, transportation, business, and banking. Nonetheless, a cashless economy is critical for the country’s economic growth because it makes commerce easier, more efficient, and speedier. A cashless economy is when transactions are not largely reliant on actual money such as notes, coins, or other monetary expenses in an economy but are supported by electronic financial services such as credit cards, debit cards, prepaid payment instruments, etc.
A cashless economy decreases the likelihood of black money entering the system and eliminates criminal activity. Money laundering, terrorism, extortion, and other illegal activities are frequently easier to facilitate in a cash-based economy. It can stop counterfeit money notes. Although this infringement can be considerably reduced, it is impossible to avoid paying taxes in a cashless society. The state receives more revenue due to the greater tax value, which can be used to fund welfare programmes.
The Different Types Of Cashless Payments And Modes
Net Banking: Net banking is an online service that allows you to transfer money from one bank account to another, a credit card, or a third party. Money can be transmitted by National electronic fund transfer [NEFT], real-time gross settlement [RGTS], or immediate payment service [IMPS] after logging into the bank account.
Mobile Wallet: A mobile phone’s virtual wallet may be used to make online and offline payments. Cash can be stored in the mobile wallet and transferred with a credit/debit card or Net banking.
Plastic Money: Plastic money is used to make purchases online or at retail locations. Prepaid cards, credit cards, and debit cards are examples of these.
Open Wallets: An open wallet is used directly by a bank or indirectly through a third party. Customers can utilise the funds in their mobile wallet to make payments for transactions or withdraw the amount transferred to the account in cash using open wallets.
Semi-Open Wallet: These wallets do not allow customers to withdraw or return cash, so they must spend what they load into them. Airtel money or Ola money are some of the examples.
Closed Wallets: A corporation offering goods or services can construct a closed wallet for end-users. Close wallet users can utilise their spare funds to do online transactions with the wallet’s issuer. Money from returns, cancellations, and refunds is sent to a secure server accessible through the wallet. Amazon Pay is the best example of a locked wallet available.
Semi-Closed Wallets: End-users can make transactions at designated merchants and places using a semi-closed wallet. Although these wallets are not widely used, they can be used for online and offline purchases. However, retailers must sign contracts or agreements with the issuers to accept payments using mobile wallets.
Advantages of Going Cashless
Keeping track of expenditures
It will be easier for customers to keep track of their spending if all transactions are recorded. It will also aid in filing income tax forms, and people will find it easier to explain their expenditures if they are audited.
Convenience
The convenience of making financial transactions is likely the most compelling reason to go digital. You will not need to carry large amounts of cash, plastic cards, or even wait in lines for ATM withdrawals. It is also a safer and more convenient way to spend when travelling.
Lower chances of Fraud
It is simple to block a credit card or mobile wallet remotely if stolen, but it is impossible to get your money back. In this regard, the digital option provides limited security. It is especially true when travelling, especially internationally, when losing cash can be highly inconvenient.
Conclusion
The future of a cashless society seems bright, as evidenced by the positive response and support offered by the country’s citizens, indicating that the government’s Digital India initiative is likely to succeed. As a result, the country’s GDP will increase. It is more accurate to suggest that India must pursue a cash-light economy rather than a cashless one. The country’s cashless economy results from the country’s march toward a less-cash economy.
