Page 1 of 9
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 03
March 2019
Available online: https://ejbss.org/ P a g e | 553
Cash to Cashless Economy
SONIKA SHARMA
Assistant Professor, Faculty of Commerce
S.D. (PG) College, Panipat
ABSTRACT
In this decade, the economic environment of India has witnessed significant changes. Many
policy reforms were introduced by the government of India to accelerate the growth rate of
the economy in the last decade and demonetization was one among them. On 8 November
2016, our Prime Minister Sh. Narender Modi Ji took a reformative step by demonetizing the
high value currency notes i.e. 500 & 1000 rupee notes. There are various objectives behind
this reformative step and “A Cashless Economy” was among them. A cashless economy is
one in which all transaction are settled down without cash. But it doesn’t mean that we’ll
shift to the barter system, where goods were exchanged with goods. A cashless economy is
one in which all transaction were taken place through e-payment or digital payment system.
But in India, less than 5% of all payments happen electronically. The main reason behind this
is the low literacy rate along with the lack of infrastructure facilities. The present research
paper highlights the meaning of cashless economy, various modes of e-payment, its various
benefits and also various obstacles in the implementation of it. It also includes the views of
different people of Panipat region towards demonetization and cashless economy. This
survey was conducted with the help of structured questionnaire.
Key Words: Cashless economy; E- payments; demonetization; Black economy
Page 2 of 9
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 03
March 2019
Available online: https://ejbss.org/ P a g e | 554
INTRODUCTION
The government of India has made a significant change in the economic environment of India
by demonetising the high value currency notes of rupee 500 and rupee 1000 from 8
November 2016 & push India towards cashless economy. For a minute, this decision shakes
the whole nation because this was beyond the thinking of a common man that it can ever be
happened in Indian economy. But it happened, a very daring & also a reformative decision by
our PM for the good of the economy. The declaration created confusion across the nation, as
these high value notes constitutes around 85% of total currency circulated in India.
However, this step compliments another campaign “Digital India”. A report by Goggle India
revealed that around 75% of transaction in India were cash based, while in developed nations
such as the US, Japan, France, Germany etc. it was around 20-25%. The shortage of cash due
to demonetisation has pushed e-payments to the forefront; debit cards, credit cards, e-wallets,
e-banking.
Even the RBI has also recently unveiled a document –“Payments and Settlement system in
India: Vision 2018”- setting out a plan to encourage electronic payment and to enable India to
move towards a cashless less society. Government of India also working to reduce the
dependence on cash by launching various apps and schemes like Lucky GrahakYojana,
DigiDhanVyaparYojana, BHIM app of SBI for customers and traders to promote e-payments.
OBJECTIVES OF THE STUDY
To study the concept of cashless economy.
To study the various modes of payment in cashless economy.
To study the benefits and challenges of cashless economy.
To know weather the India is ready for cashless economy.
To study about the various initiatives taken by the goverment to make India cashless.
CASHLESS ECONOMY
A cashless economy is one in which all transactions are done using electronic payment
system. This e-payment mode can be debit card, credit card, e-wallet;immediate payment
Page 3 of 9
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 03
March 2019
Available online: https://ejbss.org/ P a g e | 555
services (IMPS), Real Time Gross Settlement (RTGS), and National Electronic Fund
Transfer(NEFT). By going cashless, we mean that the use of cash should be minimal. It
doesn’t fully eliminate the use of cash from the economy.
The cashless economy is a system in which transactions are not done predominantly in
exchange for actual cash ( Akhalumeh&Ohiokha, 2012), It is essentially a mobile money
payment system which allows users to make payment through GSM phones with internet
facilities. This system increases convenience, create more service options, reduce risk of cash
related crimes and provide cheaper access to banking services and access to credit(Yaqub, et
al, 2013).
VARIOUS MODES OF E-PAYMENTS
MOBILE WALLETS
A mobile wallet is a way to carry your credit card or debit card information in a digital form
on your mobile device. It is basically a virtual wallet available on mobile phone. A person
can make payment by using his/her smart phone instead of using plastic cards or cash. For
using it, user have to make an account on any mobile wallet and transfer money from bank
MOBILE WALLETS
BHIM
PAYTM
JIO MONEY
PLASTIC MONEY
DEBIT CARD
CREDIT CARD
STORE CARDS
NET BANKING
RTGS
NEFT
IMPS
