Cashless India (2024)

FAQs

Is India going to be cashless? ›

In 2022, 46 per cent of real-time global digital transactions took place in India, and the nation has become the second-largest digital market in the world, closing in on China in first place. As the globe continues to move towards a cashless existence, Indian software could come to dominate the financial world.

A cashless economy is one in which the liquid transactions through the system happen with the exchange of plastic currency or through digital currency. ATM debit and credit cards are plastic currency and online payments come under digital currency.

PM-JAY provides cashless cover of up to INR5,00,000 to each eligible family per annum for listed secondary and tertiary care conditions.

In a country with a huge informal economy, dependent on cash transactions, demonetization was a big political gamble, too. The immediate fallout was chaos, as the country scrambled to cope. There was a rush at banks and ATMs to exchange old notes and withdraw new currency.

Sweden's switch to electronic cash started after a surge of armed robberies in the 1990s, and by 2022, only 8% of Swedes said they had used cash for their latest purchase, according to a central bank survey. Along with neighboring Norway, Sweden has Europe's lowest number of ATMs per capita, according to the IMF.

Many hotels, upmarket restaurants, and shops allow you to pay by credit card. Smaller sellers only accept cash, so it's best to keep some rupee as a backup option. The most widely accepted cards In India are MasterCard and Visa. American Express is generally accepted by major hotels and restaurants.

Advantages. A cashless economy brings advantages like enhanced transparency, reduced black money circulation, improved convenience, and increased economic growth.

In recent years, payment in China has undergone a remarkable transformation, evolving into an almost cashless society characterised by mobile solutions. While this payment method has not yet arrived in Germany, it is ubiquitous in China and simplifies people's everyday lives.

Cashless society: disadvantages

Elderly people may be less comfortable with tech and less able to make the switch from physical currency. Rural communities could also be left vulnerable, because of poor broadband and mobile connectivity. People with low income or debt tend to find cash easier to manage too.

What are the disadvantages of cashless policy? ›

The downsides of going cashless include less privacy, greater exposure to hacking, technological dependency, magnifying economic inequality, and more. Credit and debit cards, electronic payment apps, mobile payment services, and virtual currencies in use today could pave the way to a fully cashless society.

The advantages to cashless societies might include reduced physical crime (since there's no tangible money to steal), lower transaction costs, and the convenience of not needing to carry cash. However, cashless societies have challenges, too.

Similar rates have been recorded across other Scandinavian nations, while Hong Kong predicts cash will account for only 1.6% of point-of-sale (POS) transactions by 2024. But despite this global shift away from tangible currency, the US isn't likely to transition officially any time soon.

But seven years later, cash continues to hold ground, casting renewed doubt on the necessity of the controversial currency ban. According to the Reserve Bank of India (RBI), cash in circulation in the economy grew by over 16.6% in 2020-21 compared with average annual growth rate of 12.7% over the previous decade.

Cash is king across the country

For the most part, you can't go wrong with cash in India. Despite continued efforts to go “cashless” (especially during the pandemic), it's rare for places not to accept cash.