It has been said that Cashless Economy may be the purest form

of democracy the world has known. Online payment has seen an

extensive growth due to Digital India campaign and
Demonetisation. India is gearing up for its biggest reveloution
post independence as mutiple Digital payment gateways /modes
are available on different platforms such as Banking
cards,USSD, AEPs, UPI, Mobile wallets, Banks prepaid cards,
Internet Banking, Mobile Banking, and Micro ATMs etc.

These are the following favourable and unfavorable conditions

that the cashless economy will impose on the life of one billion
people.

1. Risk Reduction- An individual does not need to carry

cash with him or her everywhere which in turn reduces the
chances of theft from wallet, inconvenience due to carrying
cash, risk of receiving counterfeit currency and so on. The
crime rate of physical theft in India is one of the highest-
going cashless will extinguish that threat completeley.

2. Tax evasion

Empirical studies show a clear correlation between card

payments and less Value Added Tax (VAT) evasion. The
improved traceability of cashless payments makes it much more
difficult for tax evaders to conceal earnings. Implementing
effective policies aimed at curbing tax evasion is a challenge.
Public opinion is rarely warm to such attempts. The Indian
government tries to tackle the problem through the introduction
of biometric payment systems by the year 2020. They have since
collected biometric data of 1.1 billion people. With biometrics
data tracking each payment, the government hopes to eradicate
tax evasion soon.

3. Rise of Online Payment Modes and other E wallet

apps

India’s digital payments industry is expected to grow by ten

times to $500 billion by 2020, up from current estimates of
$40–50 billion, according to a report by advisory firm IMAP.
Demonetisation has paved the way for the future of digital
transactions in India. Point of sales (PoS) transactions have
crossed the Rs 70,000 crore mark through the use of banking
cards. Prepaid instruments, like m-Wallet, PPI cards, paper
vouchers and mobile banking are leading the way. The popular
mobile wallet operator Paytm alone clocked 68-million
transactions via UPI in February, accounting for almost 40
percent of the total UPI transactions in the country. UPI or
Unified Payments Interface is an instant real-time payment
system developed by National Payments Corporation of India
facilitating inter-bank transactions between 2 mobile phones.
For more information check out cashless.gov.in

4. Inadequate internet connectivity

Broadband connections are still a rare phenomenon in Indian

cities but it’s an even rarer facility in small towns or villages.

The country has 350 million internet users that are still working
with a speed of 512 kbps which is much lower than the global
average speeds ranging above 5 Mbps. India’s average internet
connection speed is 2.8Mbps.Average page load time in India is
5.5 seconds compared to China’s 2.6 seconds.

Wireless medium suffers from a major crunch in bandwidth

which cannot solve the problem of poor connectivity.

5. Huge mass of Uneducated Population

According to the 2011 census, India has a literacy rate of 73 per

cent. The country has come a long way from the 12 per cent
literacy rate since its Independence in 1947 but according to
UNESCO, it still is home to the biggest population of illiterate
adults in the world.

Without the basic knowledge to read and write, introducing a

cashless economy is more of a distant reality for this population.
Despite government’s thorough attempt at inclusive banking,
the lack of basic education discourages the use of technology.
6. Cyber Security

The absence of robust cyber security laws in India is a major

threat to the country’s dream of a cash-less economy. Instances
like the massive security breach of 32 lakh debit cards, just
months before demonetisation, is a strong indication that the
country is yet to develop an efficient cyber-security system.The
lack of an adept checking-mechanism for the modern banking
technologies is an obvious deterrent towards a safe cash-less
econonmy.

Cash is set to lose currency in India, as an explosion in

smartphone usage drives a digital payments boom.

By year 2020, nearly $500 billion worth of transactions in India

will be executed digitally, using online payment modes and
other digital-payment systems. We are open to your views and
comments.
 Yes, India is ready for a cashless economy.
 According to TRAI, as on 30 September 2016, 82 out of 100
citizens in India owned a mobile phone. The evolution of the telecom
ecosystem, with significant reduction in call and data rates, along with
the prices of smart phones, is propelling the shift to a cashless
economy.
 The government of India is working dedicatedly to push India
towards a cashless economy. With major initiatives such as
demonetization, Direct Benefit Transfers, BHIM and many more. The
intent is to streamline the economy and curb corruption.
  The government approved for a proposal, under which there
would be no charge for BHIM, UPI, and debit card transactions up to
₹2000.
 Government also ran a DigiDhan campaign where 16 lakh lucky
winners (users and merchants) were rewarded with prizes ranging
from Rs 1000 to 1 crore.
 Further to incentivize behavior change and bring down the cost
of digital payments, referral and cash back schemes have also been
launched for BHIM where users and merchants receive cash back.
Also, initiatives like USSD and the *99# service have ensured that
non-Smartphone users are also on board the cashless wave.
 Demonetization has given an impetus to e-wallet services.
According to a report “Securing the cashless economy”, by Pwc,
India witnessed
 3X increase in the download of a leading mobile wallet app
within 2 days of the demonetization announcement.
 1 million: Number of newly saved credit and debit cards within
two days of demonetization announcement.
 100%: Day-on-day growth in customer enrolment with leading
mobile wallets after demonetization.
 30%: Increase in app usage and 50% increase in the download
of wallets backed by leading banks.