Less-Cash to Cashless Economy

Why Cashless?

The first thing that comes to my mind is that it will not allow you to hide cash. as we all know corruption is a long time wound ever for many countries and Cashless economy might be the permanent medicine for the wound. we do have many other benefits too.

As you can see the above graph cashless is an Eco-friendly and people friendly in very large scale. And it's a permanent solution for corruption and fake currency issues. It was reported that Pakistan earns 500 crores annually just because of fake currencies. Demonetization is the biggest and secret operation ever done from a democratic country ever for both to destroy the fake currency and Black money, even it's not a permanent solution for corruption. Most of the frauds prepared the new fake currencies.

Cashless race within the Countries

Most of the countries are on the list. Countries like Kenya going cashless using M-Pesa the mobile money. So I don't think it's the right time to move on from cash currencies. We do have nearly 78 to 80 Crore smartphones in India where among them 28 to 30 Crore are smartphones. India given Adhaar enabled transactions even for normal feature phones. Remaining people can use their Kissaan rupay cards or debit cards from their Jan Dan accounts.

Central Government Move

Payments made easy

To promote cashless transactions Govt. and few other organizations gave discounts which are mentioned below. however, it may change with time.

Apart from this USSD transactions charge 50 paise per transaction and all other transactions charge based on the respective banks T&C. BHIM App avail on Play store, iOS, and Windows. So we can download and connect our bank account to transact for free. you can visit http://cashlessindia.gov.in/index.html to know more about cashless payment methods.

The government trying to pay the scholarship amount, Vidhava pension etc directly to the account of the user. RBI approved payment banks for Airtel, paytm and many other companies. Now we do have a 2 lac capping for cash transactions, which means we cannot transact more than 2 lac in cash.

So, by promoting cashless transactions and capping currency note transactions government of India trying to move towards the cashless economy.

How we can reduce pressure on Banks

RBI's desirable step for infrastructure financing, wholesale banking and retail banking might helpful to reduce the pressure on banks. It approved 11 payment banks including Paytm, Airtel and Vodafone M-Pesa. If we look into deeper nowadays the smartphone giants like Apple, Google and Samsung announcing Mobile pay which can grow up rapidly. Since we cannot transact more than 2 lac rupees, it is necessary to know about cashless transaction more. So there are lot of chances to Indians to go cashless as soon as possible. May be as Modiji says we can achieve new India with cashless economy by 2022.

Obstacles

Literacy

State wise Literacy in India according to census 2011

As we can see above, we have only 3 states which achieved more than 90% literacy across India. To educate the mass population may be the biggest challenge but compared to 2001 it's grown from 65% to 74%. India set a target to achieve 95% literacy within 2015, However yet see the results. We can say it might be the biggest trouble to achieve cashless economy. But if the educated take an initiative to guide others.

India the worlds second largest country in terms of population. The literacy achievement so far given below based on Gender and Location.

Assuming that we can bring up all urban people to the cashless economy with minimal effort still, we have huge numbers in the rural area where only 69% on an average were counted as educated. So by putting maximum effort on these 21% rural people we can achieve the goal very easily.

Poverty

State wise poverty published from RBI in 2013

On an average 21% of Indians were lies in below poverty line(Red bars in above indicates poverty). Most of them don't have even normal feature phones. To penetrate the internet to these poor mass might be a tough challenge. As an alternative Govt. of India offered Adhaar enabled payment and debit card payments. Even though for the people who were struggling for 3 times meal won't even think about it.This also leads in lack of smartphone penetration in India.  

Hacking

Evolution happens not only for humans but for their problems too. We still remember ransom ware virus attacked over 150 countries and Zomato hacks stolen 17 million users account information. So it's better to keep our money safe. Even we cannot trust the bank apps and most secured software.

Zomato hacker may try to login to your bank account using your zomato password. So it's better to keep separate passwords for our different accounts. Or we can use apps such as google authentication etc for more safety.