What is the meaning of Cashless Economy ?

Cashless economy is needed to reduce the taxes that are charged by the government due to the lack of funds in the government bodies

u can not make cashless economy yet u can make less cash economy but it required more financial literary and financial inclusion with cheap and effective bug proof information technology services

Cashless India is important because it will decrease the tax avoidance and the money laundering cases subsequently resulting in the benefits for the customers

Cashless is needed as 1 out of 7 notes present in the economy is fake which results into a bad image of the economy.

BANKING CARDS: Banking cards are available by the bank by providing the KYC (know you customer) information to the bank. Applying for a card and getting a pin for the same

USSD: You should be handling a bank account and have your mobile number attached to the same. You should register for mobile banking and you will get the MPIN (Mobile PIN) and MMID (Mobile Money Identifier) for the transaction

MOBILE WALLETS: Option to open a zero KYC or a full KYC wallet along with your mobile number and the application to be downloaded to your smartphone.

According to the website of cashless India, the Digital India programme is a flagship programme of the Government of India with a vision to transform India into a digitally empowered society and knowledge economy. “Faceless, Paperless, Cashless” is one of professed roles of Digital India.

BANKS PRE-PAID CARDS: For this service, a bank account should be there with wallet or a pre-paid card and a smartphone to generate the MPIIN

The ambitious mission of government of India to drive India towards a cashless economy was boosted with the announcement of demonetization on November 8, 2016.

MOBILE BANKING: A bank account is required along with a mobile phone application of the bank and internet connectivity to take benefit of this digital service

A system where no physical cash is in circulation is a cashless system. Payments are made through credit and debit cards, bank electronic fund transfers or virtual wallets.

MICRO ATM’s: This type of digital service can be used by the users of low costs devices and would be beneficial to them.

The future of the Cashless India looks pretty promising as the response of the country people towards this move of the government and the support towards it is a clear indication that the government’s move is likely to succeed.

Cost Reduction: cashless system brings down the cost associated with printing, storing and transporting of cash.
Risk Reduction: The risk of money getting stolen or lost is minimal. Even if the card is stolen or lost it is easy to block a credit/debit card or a mobile wallet remotely. It is also a safer and easier spending option while travelling.

The transparency in the economy will increase through the e-commerce transactions and the digital payment gateways which will increase the GDP of the economy.

This will increase the creditability of the country and make a rise in investments. This step of cashless is truly going to create ripples of big success.

Convenient: The ease of conducting financial transactions is probably the biggest motivator to go digital. With the advent of digital modes, one can avoid queue for ATMs, transact 24*7 and save time. Additionally for service providers, with the emergence of e-KYC, it is no longer necessary to know your customer physically as the payments model has overcome limitations related to physical presence.
Tracking spends:

Digital transactions surged over 23%, according to data presented to a Parliamentary Standing Committee on Finance. 2.73 crore transactions were conducted through digital means in May 2017, much higher than the 2.24 crore transactions conducted in November 2016.

However, the trend is not uniform across the various modes of digital transaction. Around 30 million transactions were conducted every day through the Unified Payments Interface (UPI) in May 2017. Compare this to the 1 million-per-day transactions conducted in November 2016. Electronic bank transfers witnessed the second largest jump, with transactions jumping to 22 lakh in May 2017 from 12 lakh in November 2016. Use the use of cards, on the other hand, only increased by 7% over the same period. The RBI’s provisional data too suggests the same.

Many suggest that this significant rise in digital transactions is because of the demonetisation of 500- and 1,000-rupee notes. Currently, transactions amounting to Rs 70,000 crore have been conducted using cards at Point-Of-Sale (POS) terminals. This is an average growth of 25% since March 2016. “If demonetisation had not happened, then only by FY19 the credit + debit cards transactions on PoS terminals would have reached the current level of Rs 70,000 crore,” according to a report by the State Bank of India (SBI).

The volume of digital transactions hit a peak in December 2016. After that month, however, the number of transactions fell on a month-on-month basis. In fact, it fell until February 2017. Many suggest that this fall shows that demonetisation did not lead to the rise in digital transactions. However, it must be noted that transactions have risen over the last few months. This can hint at a more organic growth in digital transactions.

Next time you cross an Octroi or Toll station, you could see a truck or a commercial vehicle zip past without stopping, all thanks to the Digital Payment infrastructure. The sensors would scan a tag and deduct the toll money automatically from a bank account or e-wallet. You could also see many drivers pay using a digital wallet or card. In fact, in June alone, around 82 lakh transactions at Toll booths were digital, according to National Payments Corporation of India data. For the whole year, the number could be as high as 2,500 crore!