After announcing the demonetization of Rs 500 and Rs 1000 currency notes in November, 2016, a cashless and digital economy has been one of the key focuses of the present-day government. Since then, there has been a steep rise in cashless transactions.
Data from RBI and other government sources reveal that the aggregate digital transactions using Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT), Immediate Payment Service (IMPS), Cheque Truncation System (CTS), mobile wallets, Prepaid Cards (PPI), Unified Payments Interface (UPI)and the Point of Sale (PoS) transactions using credit and debit cards for 2017-18 was at 15.83 billion. Even though it is still much less than the cash which goes around, it is a good start.
Challenges for a cashless economy
To become a cashless economy, India needs to focus on certain areas like setting up high-speed internet connection nationwide, a wide mobile network coverage, and an apt financial structure in banks that support digital transactions, such as the Bajaj Finserv EMI card that lets people shop cashless.
As per a research report titled Cashless Economy – Challenges and Opportunities in India, published in Pacific Business Review International in 2018, India is still lagging behind when it comes to electronic payments. A large section of the Indian population is still dependent on cash due to the unavailability of an adequate internet connection, and the lack of awareness about online transactions and the internet, in general.
The government has taken several measures to promote cashless transactions in India, such as the introduction of Bharat Interface for Money (BHIM) UPI) app, which acts as a universal gateway for all online transactions. It has also introduced several budget incentives, such as making it mandatory to have digital payments as a checkout option at all the major merchant points.
Benefits of going cashless
Numerous benefits around various sectors come with going cashless. If the economy heads towards a cashless state, the real estate prices will come down as most of the unaccounted black money is invested in real estate. With EMI loans gaining strength, shopping will also become a more acceptable practice.
It is also said that going cashless will enable banks to not rely on a physical structure, and sending and receiving funds globally will be much easier than it is now with transaction costs coming down significantly.
One of the primary factors of going cashless is that the unaccounted money will go out of circulation as all the transactions will be recorded digitally. With the digitization of cash transactions, the RBI will also have to spend less on the cost of designing, developing, printing, storing, transporting, placing, et cetera — an amount otherwise significantly huge. Example, RBI spent Rs 27 billion in the financial year 2015 for currency issuance and management.
What is the future of cash?
According to Bloomberg’s New Economic Form Survey, there is a global consensus forming around getting cash is on the way out. Globally, 52 per cent of respondents strongly agree or agree that the G-10 nations (Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, the United Kingdom, the United States and Switzerland) will no longer use cash as a medium of exchange in 2035.
For Indians, it means adapting to newer forms of payments, such as the Bajaj Finserv EMI card on Finserv MARKETS. The Bajaj Finserv EMI card allows the benefits of cashless transactions along with a host of new features.
An EMI loan available on Finserv MARKETS allows you to repay for your product with flexible tenors ranging from 3 – 24 months.. For getting an EMI loan, a one-time submission of KYC documents is sufficient for you to purchase your products on EMI. Post that, you need not produce any documents — just the EMI card would do.
You can use the EMI Network Card to shop for all your favourite products like TV, AC, fridge, smartphone, laptop, cooler, washing machine and much more on EMI from top e-commerce platforms such as Amazon, Flipkart, MakeMyTrip, Yatra, Paytm, Samsung, Pepperfry, and others.
Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!