As a consequence of the cancellation of

As a consequence of the cancellation ofthe tender character of recent  five hundred and  one thousand notes, there has been a surge within the digital transactions through use of credit/debit cardsand portable applications/e-wallets etc. To  additionally  accelerate this method, the CentralGovernment has begin with varied incentive packages and measures for promotion ofdigital and cashless economy within the country. Digital Indiacouldbe a  programme initiated  to  arrange  India for a  better  future.

 The Digital India  programme could be a leading programme of the Govt of India with a vision to remodel Indiainto a digitally authorized society and data economy.”Faceless, Paperless, Cashless” is one in every of expressed role of Digital Republic of India. As an aim of promoting cashless transactions and  changing  Republic ofIndia into less-cash society, varied modes of digitalpayments are  out there like Banking cards, USSD (the Unstructured SupplementaryService Data), AEPS (Aadhaar Enabled Payment System), UPI, Mobile wallets,Banks Pre-paid Cards, Points of Sale, Net Banking,Mobile Banking and small ATMs. ( Sunaina Jhingan, 2016). IndianGovernment is aiming to create the country a cleaner, more transparent economy byadopting digitalization as a mode  tocreate an amicable climate for foreign trade, boost economic activity, andultimately lead the country to the another level of heights amongst emergingeconomies.Source : NPCIELECTRONIC PAYMENTS (APRIL 2017)   Volume (Billion) Value (Rs. Billion) RTGS 9.5 88512.

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2 NEFT 143.2 12156.2 CTS 95.3 6990.

6 IMPS 65.1 562.1 NACH 212.6 905.2 UPI 6.9 22.

0 USSD 188.9 301650.5 DEBIT & CREDIT CARDS AT POS 231.1 431.4 PPI 89.2 22.

3 MOBILE BANKING 61 1443.8 TOTAL 853.1 109602.2 Source:NPCI MOBILEDIGITISATION-  A  BOOST FOR CASHLESS ECONOMYWith the result of ban of INR  one hundred and lesser denomination notes previously in circulation,  India  Government  has suddenly felt anincrease in  on-line transactions by the people in the form of card payments and mobile wallets to handle their daily expenses.

 However in contrast to rest of the economies where card payments or plastic money  are the major  source of payment modes  used for daily use, card payments havestruggled to scale-up  due  to the fragmented nature of theretail sector. In such a state of affairs, mobile as a platform, features a distinctive set of capabilities that may overcome the challenges expose by the Indian payments landscape. Mobiles provide a cheap means that to make money access and payments. It will extend the last-mile reach of banking services either throughbusiness correspondents or  on to the tip shoppers., enhancements within the  telecommunication infrastructure, access to web  property and cheap  smartphones can eliminate the necessity  for hardware supported mounted line connections. Mobile may be a platform that unambiguously combines digital identity, digital price and digital authentication to make cheap access to money services.

  FUTURE OF MOBILE WALLETS IN INDIAAccording to research analystsby 2018 , the country can witness an upsurge in mobile wallet market thatis expected to grow at a CAGR of 140%, while the global mobile walletmarket will manifest a  growth of  CAGRof 34% by 2020. The reason for  thefact is  that India is one of thefastest-growing markets for smartphones in the world. It is expected to reachat the level of the second largest market by the end of  2017 – replacing the United States. The numberof mobile internet users in India is expected to touch 314 million by 2017, upfrom 280 million now.

According to a recent reportby GrowthPraxis, the market for mobile-enabled payments in India grew morethan fifteen times between 2012 and 2015 to reach its current size of $1.4bn.Interestingly, nearly 60% of users accessed the internet for the first time ontheir mobile phones – in marked contrast to many other countries, where desktopand laptop are the first web-enabled devices that people use.CHANGING TRENDS In the comingtimes, Cash is all set to lose its existence in India, due to increase insmartphone usage among masses in the country driving a boom in the digitalpayments system. By 2020, it is expected that nearly $500 billion worth oftransactions in India will be processed digitally via online  and mobile wallets and other digital-paymentsystems which is 10 times the current level, according to a report by GoogleIndia and The Boston Consulting Group.        Number of Transactions (inmillions)Source:  Reserve Bank Of India  LEADIMG M-WALLET PLAYERS AND THEIR USER BASE (MILLION)2016                                                                                                             (in millions) Pay Tm 120 ITZ Cash 40 Mobikwik 30 Citrus Pay 21 Oxigen 20 Vodafone M-Pesa 5.

4 Airtel Money 1.7 ICICI Pockets NA Source:  M-Wallets Assocham Report MARKET SHARE OF PAYTM Paytm also recorded a whopping 1 billion transactions in 2016, which so far has not been achieved by any of its competitors.147 million transacting users in 2016 200 million unique visitors on the app and the web combined 2 billion user sessions 80 million monthly active users in December 2016Paytm hasalso 89% of the mobile share in the market, with 70% coming from Android, 4%from iOS, 11% from desktop, 14% from mobile web and 1% from Windows OS.Compared to last year’s 72%, the share has increased a lot.The company is nowwitnessing about 7 million daily transactions worth about Rs 120 crore, helpingit cross $ 5 bn Gross Merchandise Value (GMV) sales, four months ahead of itstarget. Last year, Paytm’s GMVwas at $3 bn.   GOVERNMENT INITIATIVESFOR MAKING INDIAN ECONOMY CASHLESSTherehas been a increase in the digital transactions through use of credit cards, debitcards and mobile phone applications, e-wallets etc. To further accelerate thisprocess, the Central Government has decided to launch a group of incentives andmeasures for promotion of digital and cashless economy in India.

Theseincentives/measures include:1.     TheCentral Government Petroleum PSUs have decided to give an incentive by giving adiscount of 0.75% of the sale price to consumers on purchase of petrol/dieselif the payment isbeing done digitally. 2.      For the enlargement of digital payment systems in rural areas, the CentralGovernment unitedly with NABARD can providesupport to any or all the eligible banks for preparation of two POS devices every in one large integer villages with population ofbut ten,000. {this can|this may|this can} profit farmers of 1 large integer village covering a complete population of nearlyseventy five large integer UN agency will have facility to interact cashlessly in their villages for his or her agri desires. 3.

No service tax are going to be chargedon digital dealings charges/MDR for transactions upto Rs.2000 per dealings. 4. Unified Payments Interface has been launchedby National Payments Corporation of India (NPCI) to any RBI’svision of transitioning towards a “less-cash” and a lot of digital society. a collection of ordinary applicationprogramming interfaces (APIs)give AN practical system for seamlesstransfers, and it’s been designed on high of the cash service (IMPS)platform.5. NITI Aayog Committee- The Centre has setup acommittee headed by NITI Aayog corporate executive Amitabh Immanuel Kant, to formulate a technique to expedite the method of reworking India into a cashless economy.

The committee has been asked to spot and operationalise within the earliest doable time-frame easy digitalpayment choices all told sectors of the economy. this can be AN integral part ofthe government’s strategy to remodel India into a cashless economy.6. The Central Government through NABARD will support RuralRegional Banks and Cooperative Banks to issue “Rupay Kisan Cards” to four.32 large integer Kisan mastercard holdersto modify them to form digital transactionsat POS machines/Micro ATMs/ATMs. 7. For paid services e.

g. catering,accommodation, retiring rooms etc. being offered by railways through its connectedentities/corporations tothe passengers, it’ll give a reduction of fifty for payment of those services throughdigital means that.All the passengers traveling on railways availing these services could avail the profit.8.

The Central Government Departments andCentral Public Sector Undertakings can make sure that transactionsfee/MDR charges related to payment through digital means that shallnot be passed on to the customers and every one such expenses shall be borne by them. StateGovernments ar being suggested that the StateGovernments and its organizations ought toconjointly envisage to absorb the dealings fee/MDR charges associated with digital payment to them and shopper mustn’t be asked in grips it. 9. Discount on policies sold-out online- Public sectorinsurance corporations can give incentive, by approach of discount orcredit, upto ten percent of the premium normally insurance policies and eight per cent in new life policies of life assuranceCorporation sold-out through the client portals, just in case payment is formed through digital means that.10. Public sector banks ar suggested that merchandiser mustn’t be needed to pay over Rs one hundred permonth as monthly rental for PoS terminals/Micro ATMs/mobile POS from the merchandisers to bring tiny merchant on board thedigital payment eco system. Nearly 6.5 large integer machines by Public Sector Banks are issued to merchants UN agency are going to bebenefitted by the lower rentals and promote digital transactions.

   Benefits of cashlesstransaction It is very obvious that everythinghas its pros and cons. Cashless transaction do has some. Some of them are.

1.Control over BlackMoney-Black cash has become a hazard currently a day’s cashless dealings become important to manage the black cash. Whenever wehave a tendency to purchase anyproduct, the distributer don’t disclosetheir financial gain to the govt. and thus throw off given the tax {that cash|that cash|that money} don’t return underneath government police work thus contemplate black money. Any properties that aren’t underneath government police work and also the tax haven’t been acquired that’s the black cash.

 2Controlover fakenote It is not possible to form pretend noted if the cashless dealings is employed by each individual within the society as a result ofnotes becomes useless. during this state of affairs all the dealings are done on-line. 3.

No funding to act of terrorism Funding to the act of terrorism is completed by the unaccounted cash by the black cash holders. however cashless dealings caneradicate black cash similarly as pretend currency thus no support to act of terrorism. 4. Tax payment No one will store cash with themselves as all the dealings are done on-line.

So, everyone must pay tax for what they need. 5. illicit politicalfunding Political donation is that the majorconcern within the country.Majority of the funding within the party is unaccountable that isn’tdisclosed by the party similarly because the donor.All that sort of illicit dealings would be stopped if a government follows cashless dealings.

 6. price of printingand distribution of currency – The price ofprinting and distribution of currency would be zero for the cashlessdealings as no paper notes toprint and distribute.   CHALLENGES IN THE PROCESS OFCASHLESS TRANSACTIONS-As per TRAI thetotal telephone subscriber (in million) are 1058.

85 sill it is not in the rangeof all the people. The existing telephone infrastructure is not covering allthe area. Insufficientinfrastructure isadditionally asignificant barricade forcashless group action. For an outsized country like Asiancountry,there area unit solely two.3 100000 ATMs and fourteen 100000 POS terminals area unit terribly low.

Countries like Brazil, Australia, France and therefore the United Kingdom of Great Britain and NorthernIreland have POS terminals 3 or fourfold that ofAsian country. additionally the client awareness drive is just about missing. The regulative framework for card payment is sound.

the present business model of card payment is additionally struggling • Illiteracy is one in every of the foremost issue within the pathof cashless group action, as per United Nations agency reportAsiancountry presently has the most important population of illiterate adults within the worldwith 287 million . India’s illiterate population largest within the worldsays United Nations agency report. • Hacking is one in every of the problems for cashless group action as per the Economic time three.2 million debit cards info were compromised of the foremost banks like SBI, HDFC, affirmative andAXIS .• Universal money Inclusion – Despite the success of January Dhan Yojana in rising money inclusion, it’s beenfound that the majority accounts are dormant. twenty third ofPMJDY accounts lie empty and are tagged as zero-balanceaccounts.

• Low Penetration of Mobile Banking: The impactof mobile wallets in fast thetransition to a cashless economy is clearlyexaggerated. Merely26% of Asian country has web access, and there area unit solely two hundred million users of digital payment services                                  CONCLUSIONThecurrent scenario across the country is a mix of cash and cashless transactions.Many efforts are being made in this direction towards turning the economy intoa cashless and paperless economy. Despite of the big initiatives that are beingtaken towards becoming a cashless economy; it will take more than a decade toshift from cash to cashless economy. Rushing the economy into a cashless statewithout adequate planning and infrastructure will be disastrous for the countryand its consequences will be bad. A gradual approach towards cashless societyas proposed by the Prime Minister is the right way to achieve the goal. Ifwe look at the overall scenario of establishing the cashless economy, itsbenefits and uses in the present system ,it can be said that cashless economyis the need of the hour.

It has become not only important but necessary for thecountry to go cashless for the systematic development in the economy. 

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