India is on the road to a cashless economy. The government has been pushing for electronic payment in a bid to combat counterfeit currency and black money. It will be a good while before the country reaches this goal but there has been progress. However, for many, the question remains, how exactly does cashless payment help? What are the benefits to the common person?
Making payments online can qualify individuals for discounts. The government has pushed for this so that purchasing rail tickets or fuel, for example, can help consumers save money. Mobile recharge online is another instance. Offers may include extra talktime, mobile data or free SMS with an online recharge. Customers can also collect reward points that they can redeem later.
Cashless transactions are extremely convenient. Individuals don’t need to carry wads of cash or wait in line to withdraw money. Since the payments are made online, customers only need to know their user IDs and passwords. The use of payment apps requires users to set up an account using their mobile phone numbers. They then add money directly using the app or by the virtual debit card provided. The next time they need to make a payment, they can do so by scanning a QR Code that debits the money from the eWallet.
It’s easy to spend when there’s cash in hand. However, with cashless payment people can keep a good track of their spending and learn to stick to their budget. Not having small denomination currency or change also keeps people from spending on things they don’t really need and also avoid getting paid candies instead of cash. They can redirect their money to more important spending, such as quick recharge on mobile phones, paying utility bills and household supplies.
Cashless payments are not without risk. For example, cards can always get lost or stolen as can mobile phones. However, it’s much easier and faster to block access to debit/credit cards and even mobile wallets. Stolen or lost cash, however, is a lot tougher – if not impossible – to recover.
Track Illegal Transactions/ Black Money
Since cashless transaction leaves a record, it’s risky for people to make illegal transactions and move black money around. Banks and governments can track transactions, which in turn help pinpoint criminals and bring them to justice. Transparency is extremely important if the issue of black money is to be tackled effectively. A cashless economy can facilitate this and speed up the process.
Enjoy Efficient Welfare Programmes
Beneficiaries of welfare schemes are more likely to enjoy the benefits since money is wired directly into their bank accounts. Payments are easily tracked and there’s a lower risk of misuse of funds. Beneficiaries also don’t need to visit the respective departments and wait for their money. Bribery is also eliminated.
Availability of Banking Services
India is a huge country and a majority of people live in rural areas. Banking services can be limited and people aren’t able to enjoy the full benefits. Now users can enjoy banking transaction through mobile apps in India. With a cashless economy, this gap can be narrowed since physical establishments aren’t necessary.
Awareness programs and training to go cashless can hasten the transition and alleviate fears that some people may have about cashless transactions.