By Lyla Shroff
The transition from cash to digital forms of money has brought about a significant transformation in our financial landscape. Traditional cash transitions are increasingly being replaced by convenient and efficient digital alternatives. The rise of mobile wallets, online banking, and smartphones has called for the public to embrace the new digital revolution as it provides easy and quick transactions. The adjustment to a cashless society has not only revolutionised the way transactions are carried but has also led to the demand for physical currency to reduce significantly. Digital payment options eliminate the hassle of carrying tangible cash and decrease the risk of theft and misplacement.
The Advantages of a Cashless Society
Digital transactions offer enhanced security, improved financial accessibility, and greater transparency. Digital payment platforms like Google Pay, Paytm, Apple Pay, PayPal, and more have made financial transactions seamless and quick, allowing users to manage their finances, check their financial status, transfer funds, and make purchases with just a tap. Additionally, digital money offers a superior level of security and traceability that cash transactions cannot match, as the use of digital money leaves a digital trail that can be easily tracked and monitored. Digital payment methods also provide real-time and accurate control of your expenses.
The Disadvantages of a Cashless Society
It would be impossible to study the state of an economy without weighing out the negatives against the positives. Although a digital and cashless society provides several benefits to its users, it also comes with a few disadvantages. The most obvious disadvantage of a digital economy would be its accessibility to all—the elderly may find it difficult to use technologically driven commodities and digital facilities; the rural community is also left vulnerable due to the lack of mobile connectivity and accessibility. The expansion of technology proves to be a boon and a bane. Abandoning cash may reduce the chances of theft but the digital space is also undoubtedly a threat to our security. The rate of cybercrimes has increased rapidly throughout the years. The digital footprint may leave you vulnerable to cyber criminals who are looking to access your personal information.
Digital Payment Platforms and Cryptocurrencies
Online or digital payment apps allow people to make transactions without paper currency and access their financial information from the comfort of their homes. In the past few years, the world has seen an influx of digital payment platforms to aid seamless transactions. Some such apps that are popular in India are Google Pay, Paytm, and Apple Pay.
Furthermore, the growing popularity and impact of cryptocurrencies such as Bitcoin and Ethereum sheds light on the future of finance and its role in the future financial ecosystem. Cryptocurrency acts as a medium of trade, means of investment, and a unit of account for its users. The rise of this form of currency was unexpected as it took the world by storm. It provides a digital means of investment with users having easy access to information and data online. Although traditional investors are unsure of the future of cryptocurrency, it is certainly a force to be reckoned with.
A Cashless Society in India
The 2016 demonetisation in India opened the gates for a cashless economy. Since then, the government has devised several initiatives to establish a cashless system in the country. The sudden event of demonetisation left the public devoid of liquid cash which eventually pushed them towards digital and cashless payment modes.
Cashless India is an initiative that is part of the Digital India Programme, a flagship programme of the Government of India. It aims to make the country a digitally empowered society. Another well-known initiative, Pradhan Mantri Jan Dhan Yojana, offers banking facilities to households who may not have access to banks. It has been received well as it addresses the lack of financial inclusion in India and seeks to eliminate challenges of financial accessibility and inclusion by allowing citizens to obtain services such as pensions, credits, and bank accounts. India can only transition to a digital and cashless economy once everybody has appropriate banking facilities, and this initiative is a step in that direction.
Although the government has made way for a lot of progress towards a cashless society, it is still a distant dream for the country. Digital knowledge is still scarce in several parts of India. The government must continue to provide facilities to spread information and awareness about evolving technologies. Digital banking and online payment methods should be made easier to access and transaction fees must be controlled in order to transition into a cashless economy.
