Is India Moving Towards Cashless Economy

Introduction In this computer and digital era, we are very fastly moving towards the digital platform in all fields of our life, the financial sector is not an exception. We all are using currency notes in almost all financial transactions since the beginning of the marketing era, but from the past few years, financial transactions are shifting to the digital platform very fastly.

- Satish Kumar Pathak

The use of the digital platform is promoted by users, regulators and Govt. An economic system where no/less physical cash is in circulation is known as a cashless economy. Payments are made through a digital platform such as credit and debit cards, bank electronic fund transfers, or virtual wallets instead of the cash payment system.

Nowadays, in India, the payment system is rapidly transiting to a digital platform. In the past, the retail transaction was entirely dependent on cash, but now the retail transactions are very rapidly shifting from cash to digital platform. India has one of the highest Cash to GDP (Gross Domestic Product) ratios in the world, and lubricating economic activity with paper currency has costs. According to the study of Tufts University, the total cost of cash handling in India is Rs. 21000 crore annually. This is a huge amount for our economy. Apart from that, digital transactions have many benefits over cash transactions, So Govt. and RBI are trying to move to a cashless economy.

The tools of Digital Transaction: