“Cashless Society” is a word that seems fiction till Nov. 2016 and all of us think that online payments are not for day-to-day transactions. But in 2016 two major things happened first Jio brings the revolution in the digital space of India by making the internet cheaper. Which makes the use of online payment accessible to almost 80% of mobile users. Second, the government of India announces demonetization in Nov. 2016. At that time almost all Indians were facing the problem of doing financial transactions. Online payment apps like Paytm , phonepe, and google pay found opportunities and start serving the Indian market on a bigger scale.
The Indian economy is growing at a rapid pace and most educated Indians prefer doing online payments. We are heading towards a society where the use of hard or physical money will become less. Online transactions, especially after the UPIs, make the flow of money seamless but they also cause many scams. Hundreds of people lost their money daily in Online transactions. According to an article published in the Times of India,” India lost a minimum of 100 crores every day in various online payment scams.” Let’s dive deep into this topic and find out what is cashless society and what are the advantages and disadvantages of having it.
What is a Cashless Society? What does it look like?
A cashless Society is a phenomenon where all the financial transactions will be done via digital mediums like UPI, net banking, plastic money (Debit/credit card), or e-wallets. In the world of a cashless society, the use of paper money or hard cash will completely eliminated. Many countries are heading toward becoming an economy that is completely electronic and reilable. In the upcoming 10 years, almost 90% of financial transactions will become digital.
Online Payments Stats
- According to the reports of Statista, “India’s digital transaction value will touch the mark of 385 trillion rupees in 2026.”
- 1.5 Trillion Indian rupees transactions were done in the year 2021 through mobile wallets.
- Over 2.8 billion digital payment transactions were done by UPI in June 2021.
- Almost 46% of people use phones to pay, 35% of people use google pay, and 12% of people use Paytm for UPI transactions.
- Sweden almost opts for the “cashless society”. More than 98% of people use online transactions there.
Pros of Having Cashless Society
- A cashless Society will eliminate the use of paper money and it will be a great initiative toward the betterment of the environment.
- Since all the online transactions are traceable so it will minimize the big scams such as – 2G and commonwealth games.
- Internation transactions become easier than ever. If a person traveling in abroad they can pay through their mobile without facing any problems.
- Not only internationally but digital payments also help many local vendors. It increases the seller by making the use and access of the money easy.
- All the costs related to the management of cash money will be eliminated.
Cons of Having Cashless Society
- Most Indians are not that well aware of the technology and online scammers can target them. Scammers can transfer all the amount from their accounts.
- Ease of Money Supply creates demand means when a person has easier access to the money then they spend their money on unnecessary things. According to some reports, many people started to spend 20% more amount after owning a credit card.
- If we have a completely cashless society it becomes impossible to do any transactions for the people in case of a technology glitch.
- People without a bank account and access to the internet will have to face many difficulties. It becomes impossible for them to survive in the cashless economy.
- It is also possible that in the future the online payment platform start charging fees for online money transfers.
All of us need to accept the fact that online payments make our life easy. Earlier we used to go to the atm for withdrawing money from a bank account. It is fast, convenient, easy, and reliable for all people who have knowledge of technology. But in a nation like India where 288 million people are illiterate and 50% of people without access to the internet it is impossible to convert into a fully cashless economy. Not only now but in the future also opting cashless economy is not a feasible option. Because there are lots of issues related to scammers, hackers, and technology infrastructure associated with it. Using a hybrid economy will be a feasible option where people can perform financial transactions accroding to their convenience.