Cashless Transactions and Its Impact - A Wise Move Towards Digital India

Abstract

Cashless transaction is the system where the transactions are done without using the physical cash or the means of hard cash. The RBI and the Government of India are making several efforts to reduce the use of cash in the economy by promoting the digital payment devices including prepaid instruments and cards. RBI’s effort to encourage these new varieties of payment and settlement facilities aims to achieve the goal of a ‘less cash’ society.  This paper focuses on the benefits, prospects and security threats relating to the cashless transactions. It finds that there are several benefits of going cashless like convenience, easy financial transactions, more availability of discounts, decreases money and time etc. Different modes are used for doing cashless transactions. The technology has spread internet banking, mobile banking, prepaid instruments, e-wallets, mobile wallets, credit and debit cards etc., and at the same time, electronic payments system is fast growing. It is expected that its impact will be felt in modernization of payment system in various sectors viz. education, business, economy etc. However, the threat of cyber attacks is the red alert which coincides with the evolution of cashless economy. It seems that while people are getting comfortable with cashless payments, some kind of negative perceptions like security problems, poor network coverage, and lack of merchant willingness, high transactional costs, lack of users’ knowledge on technology etc. are holding back many from adopting the new system. Though there are some serious threats in the pathway of the implementation of cashless system, but its actual impact is far far-reaching.