Is Cashless India Actually Possible?

 

In the current decade, the shift towards online transactions, UPI Payments, Cryptocurrency rather than cash and coins is quite evident. This shift was further and is still getting the push over conventional cash due to the current pandemic and recent trends. 

These methods have a vast market and every prospect is exciting, but we are still a long way from seeing these trends replace cash completely and enter everyone's life effortlessly.

For a country like India where going digital has been in mainstream media for a while, going digital comes with a lot of advantages for us. Why do we still have to deal with cash and coins more often than not ?

What Does It Really Mean to Go Cashless ?

Cashless Transactions surely are the current trend in the economic sector and have widely affected everyone in a way.

Cashless Transaction can be defined as a situation in which the flow of cash within an economy is non-existential and all transactions must be through electronic channels such as direct debit, credit cards, debit cards, electronic clearing, and payment systems such as Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT) and Real-Time Gross Settlement (RTGS) in India.

Trends of Cashless Transactions in India

Post Demonetization, the Centre is making a big push for online and card-based transactions in the country to achieve its target of becoming a largely cashless economy.
The rapid growth of e-payment startups in the country.

Launch of Unified Payments Interface (UPI) 

The Covid-19 pandemic fueled a massive shift towards digital transactions in India aligning with the prime minister’s vision of a Digital India. 

In fact, according to the National Payments Corporation of India (NPCI) data, payments on UPI in June 2020 hit an all-time high of 1.34 billion in terms of volume with transactions worth nearly Rs 2.62 lakh crore despite all the current trends and the advantages i don't think cash will be replaced anytime soon 
 

Why Can't We Go Cashless Just Yet ?

The most important character for any technology or resource to become a mainstream sensation is the ease of use and accessibility for the user. In India due to lack of a vast amount of educated audience it will be difficult for cashless transactions to completely take over.

The Government 

Governments produce money to pay public spending, and this increase in printing is the primary driver of inflation. Cryptocurrencies, like as bitcoin, have a unique software acceptance requirement for offering: under no circumstances does anyone have the authority to manufacture bitcoin. 

The bitcoin offering is based on an existing algorithm that is dependent on the number of certain transactions. We should wait till cryptocurrencies are widely accepted as long as there is money today. On the other hand, despite the hostility to bitcoin and cryptocurrencies, many supporters and aficionados believe in their future.

The Ease 

Customers consider mobile payments to be more convenient than cash or credit cards. Accessing your wallet for cash or swiping a credit card currently takes seconds. It's no longer necessary to open an app, scan a QR code, or type in a recipient's email address to make a payment. 

Apple Pay's ease of use may help to address this issue, but new iPhone 6 penetration remains low, and major box shops such as Home Depot, Wal-Mart, Rite Aid, and CVS have refused to accept Apple Pay until they build their own payment options.

Economists Views 

While Economists believe that the future of money will be cashless, they recognise that reliance on digital payments will not always result in a faultless system.Though they see digital payments as a means to democratise finance, they believe they may also add to income and wealth inequality.

The wealthy may be more capable than others of capitalising on new financial opportunities and earning greater rewards,Because the economically disadvantaged have low internet access and financial awareness, some of the improvements may harm as well as aid particular portions of the community.

This could further consolidate economic and financial power in the hands of the major economies."
 
According to thim, physical cash has a variety of advantages, including confidentiality in financial transactions and privacy.As a result, they feel that the future of money should be carefully considered.The end of cash is on the horizon, and the time has come for a broad public debate about what will replace it.

After all, it will have an impact not only on money but also on the economy, finance, and society.Furthermore, they believe that smaller economies' central banks and currencies will be swept away or become less relevant. 
 

Cryptocurrencies may not have enough capacity to accommodate more users in their current form. According to the findings, cryptocurrencies are now too volatile and constrained to be a trustworthy mode of payment for worldwide commerce.

However, this complaint is somewhat perplexing; it is difficult to find anyone who sees cryptocurrencies as a viable alternative to the US currency in their current state. 

Many cryptocurrency supporters refer to these currencies as "digital gold." They predict that, at least for the foreseeable future, cryptocurrencies will be utilised as a pre-transaction before being used for day-to-day transactions alongside ordinary cash. Value reserves will continue to exist.
 
Written By: Greeshma Chowdary 
Edited By: Nidhi Jha