CASHLESS ECONOMY

(DIGITAL INDIA)
CASHLESS ECONOMY?

 A Cashless Economy is an economy in

which all types of transactions are carried
out through digital means. It includes e-
banking (Mobile banking or banking
through computers), debit and credit cards,
card-swipe or point of sales (POS)
machines and digital wallets.
“We want to have one mission and target:
Take the nation forward –Digitally and
Economically”
-NARENDRA MODI(PRIME MINISTER OF
INDIA)
PRACTICAL IMPLEMENTATION FOR
MOVING ON PATH OF GOING CASHLESS
(IN CONTEXT OF INDIA):
• Payment banks
• Electronic Fund Transfer Systems
• Mobile Wallets
• Internet Banking
• Banking cards
• Banks pre-paid cards
• Point of sale
• Mobile Banking
 2.Electronic Fund
1. Payment Banks
Transfer Systems:

3.Mobile Wallets 4.Internet Banking

5.Banking Cards 6.Bank Pre-Paid cards

7.Point of Sale 8.Mobile Banking

GOVERNMENTS RURAL PUSH FOR
CASHLESS ECONOMY
 In an attempt to encourage poor and illiterate
people in rural areas to make digital payments, the
government is promoting Aadhaar Pay which
ensures financial transactions by just using
fingerprint.
INDIA IS TAKING A STEP ON THE ROAD
TO CASHLESS ECONOMY:
 The government has been working hard to
promote digital payment systems. So far, it seems
to be working: the government has reported a 400-
1,000% increase in digital transactions since the
demonetization

 The National Payments Corporation of India,

together with the RBI, has launched UPI (“united
payment interface”)
• The “Digital India Initiative” has been set up to
provide internet access and comprehensive
mobile phone coverage across India, helping
over a billion people to get online and utilize
digital payment techniques.

• The RBI has been promoting a biometric

authentication system for banking.

• The Aadhar Enabled Payment System (AEPS)

can be used to open a Bank Account using just
an identification number and fingerprint.
 ACHIEVING A CASHLESS ECONOMY ON
RURAL AREAS:
• Rural areas are home to
two thirds of the
country’s population.

• Number of connected
rural consumers is
expected to increase
from 120 million in 2015
to almost 315 in 2020.
• Over 93% of people in rural India have not done
any digital transactions.
• The government has taken steps including
announcing zero balance accounts for people. but
growth of Bank branches has been low.
 STEPS TAKEN BY RBI AND GOVERNMENT
TO DISCOURAGE THE USE OF CASH:

Government is also promoting mobile

wallets. Recently, the RBI had issued
certain guidelines that allow the
users to increase their limit to Rs 1,
00,000 based on certain Know your
customer verification.

Various incentives offered by government to

promote digital India on Cashless India:
• On digital transactions up to rupees 2000,
Service Tax of 15% waived off
• Digital purchase of fuel through credit cards,
mobile wallets or e-wallets, discount of 0.75%

• Free accident insurance worth rupees 10

lakh on account of online ticket buyers

• On purchase of new LIC policies online via

its site, 8% discount is offered.

Government has introduced various technologies

like BHIM (Bharat Interface for Money) app to
transact between each other as well as with other
merchants.
In addition to government or RBI, Companies are
also participating in combating of cybercrimes.
Microsoft opened full scale cyber security Center
called Cyber security Engagement center (CSEC)
in India.This centre monitors how viruses are
spreading , from where cyber attacks are
originating and helping customers to tap pool of
security specialists.
CHALLENGES IN INDIA MAKING A
CASHLESS ECONOMY:
There are a number of obstacles in making India a
cashless economy. Some of them are as under:-
 Currency denominated economy:
 Transactions are mainly in cash:
 ATM use is mainly for cash withdrawals and not for
settling online transactions
 Limited availability of point of sale terminals. (pos
machines)
 Mobile Internet penetration remains weak in rural
India
• Though bank accounts have been opened through
Jan Dhan Yojana, most of them are lying
unoperational

• The low literacy rates in rural India & lack of

infrastructure

• In India, there are approx. 350 million internet

users. The internet penetration rate is just 27%
which is very low ,It has to be at least 67% which is
global median

• Since, India is dominated by small retailers; therefore

they don’t have enough resources to invest in
electronic payment infrastructure.
STEPS SHOULD
BE TAKEN TO
FOCUS
CASHLESS
ECONOMY ON
RURAL AREAS:
• The Jan Dhan
Aadhaar Mobile
(JAM) can
encourage digital
transaction culture.
A large number of
government
transfers are made
through JAM
mode.
• A tax rebate (of say 1% to 2%) on payments made
by households as salary to unorganized sector
can boost cashless payments.

• The 5 A's of promoting financial inclusion through

cashless payment instruments.

• Government should assure basic necessities in

rural areas and focus on developing infrastructure.

• Financial literacy is a must for bringing more and

more people to the digital platform.
• Linkage of all welfare activities with bank
accounts is a very strategic step.

• Targeted financial education programs can

improve financial skills and Credit Management,
and increase account ownership in rural India.
A STEP ON THE ROAD TO CASHLESS
TRANSACTIONS TOWARDS FARMERS:
 The Indian Farmers Fertilizer Cooperative Limited
(IFFCO), the world's largest fertilizer cooperative, has
initiated a pan India outreach programme to educate
farmers.

 Through live demonstrations

and interactive sessions.

 Separate stalls will be set up in

each of the Rural locations to
conduct live demonstrations
and also answer the queries
posed by farmers regarding
the same.
To expand digital payment infrastructure in rural
areas,

The Central Government through NABARD will

extend financial support to eligible banks for
development of 2 POS devices each in 1 lakh
villages with population of less than 10,000.

This will benefit farmers of one lakh village

covering a total population of nearly 75crore

who will have facility to transact cashlessly in

their villages for their agriculture needs.
MEASURES TO BE TAKEN FOR
DEVELEPING CASHLESS INDIA:
 Basic cyber hygiene
(Better access to control techniques with strong
authentication measures should be implemented by
mobile e-wallet companies.)
 Bank accounts
 Abolishment of government fees
 Tax rebates for consumers and for merchants who
adopt electronic payments.
 Making Electronic payment infrastructure
completely safe and secure.
 The Reserve Bank of India too will have to come
to terms with a few issues.
DIGITAL PAYMENT METHODS:

 The Digital India programme is a flagship

programme of the Government of India

“Faceless, Paperless, Cashless” is one of professed

role of Digital India.

As part of promoting cashless transactions and

converting India into less-cash society, various
modes of digital payments
are available.
INTERNET BANKING:
Internet banking, is an electronic payment system.
Different types of online financial transactions are
here
 National Electronic Funds Transfer (NEFT)
NEFT is a nation-wide payment system facilitating
one-to-one funds transfer.
NEFT operates in hourly batches - there are twelve
settlements from 8 am to 7 pm on week days
(Monday through Friday) and from 8 am to 1 pm on
Saturdays.
2.Real Time Gross Settlement (RTGS):
RTGS is defined as the continuous (real-time)
settlement of funds transfers
The RTGS system is primarily meant for large value
transactions.
The minimum amount to be remitted through RTGS is 2
lakh.

3.Electronic Clearing
System(ECS):
ECS is an alternative method for effecting payment
transactions in respect of the utility-bill-payments
such as:
telephone bills, electricity bills, insurance premier, card
payments and loan repayments, etc.
4. Immediate Payment Service (IMPS):
IMPS offers an instant, 24X7, interbank
electronic fund transfer service through mobile
phones.
CAPACITY BUILDING AND AWARENESS
FOR CASHLESS ECONOMY:
 1. Impart education related to the digital payment
ecosystem, its tools, benefits and processes

 2. Inform and educate citizens about Digital India

- cashless, faceless and paperless

 3. Encourage citizens especially in rural and semi

urban areas to use digital payments as well as
other products and services offered by Digital India

4. DigiShala Programme Portfolio.

Digital Finance for Rural India: Creating
Awareness and Access through Common
Service Centers (CSCs):
 2 lakhs Common Service Centers (CSCs) to
provide capacity building,
 Awareness access for digital payments methods to
around1 core rural citizens and 25 lakhs
merchants across India.
 Each CSC would reach out to 40 households in
the catchment area, covering one person from
each household.
 It also targets 10 Merchants per panchayat
(for getting POS machines or digital
payment mechanism.)
HOW COME LOW-WAGE EARNERS ADAPT
TO CASHLESS DIGITAL SYSTEM:
 Open a Jan-Dhan account

 Get valid ID proof

 Use e-wallets to transact

 Save for emergencies

 Invest in small instruments

CYBER SECURITY FOR DIGITAL
PAYMENTS:
 Digital payments are likely to cost more if the
National Democratic Alliance (NDA) government
decides to impose a token 'security fee' or cess on
each online payment.

 According to several media reports, the

government is contemplating imposing a cyber-
security cess on e-payments companies.

 This 'security fee' or cess like the Swachh Bharat

cess, could be used to create better infrastructure
for secure digital transactions.
ADVANTAGES OF GOING CASHLESS:

 Convenience
 Discounts
 Tracking spends
 Budget discipline
 Lower risk
 Small Gains
DISADVANTAGES OF CASHLESS
ECONOMY:
 Higher risk of identity theft

 Losing phone

 Difficult for tech-unsavy

 Overspending
SURVEY AND ANALYSES REGARDING
CASHLESS ECONOMY
CONCLUSION:

 . A cashless economy is secure, it is clean. We

have a leadership role to play in taking India
towards an increasingly “digital economy”.
 Thus, as citizens and youths of India it is in our
hands to promote this magnificent India
encouraged by our PM Mr. Narendra Modi who
has a bright vision towards the upcoming of future
India. Big success and it will help to attain vision of
“DIGITAL INDIA”
“Coming together is a beginning; keeping
together is progress; Working together is
success”