TABLE OF CONTENT

SR. NO TOPICS PAGE NO.

Executive Summary 08
1. Introduction 09-13
1.1 What is cashless economy? 09
1.2 Problems with current Indian 09
economy
1.3 Government initiatives 10
1.4 Challenges of cashless economy 11
1.5 Prospects of cashless economy 12
2. Objectives of study 14-17
2.1 Advantages of study 15
2.2 Scope of study 16
3. Literature Review 18-25
4. Research Methodology 26-29
4.1 Data Collection methods 27
4.2 Sampling methods 27
4.3 Limitations of study 29
5. Impact of Cashless economy 30-36
5.1 Impact on banking sector 31
5.2 Impact on business 32
5.3 Impact on education 33
5.4 Impact on common man 34
5.5 Impact on agriculture and 34
suggestions
6. Digital payment methods: Road to 37-44
cashless economy
7. Future of cashless economy 45-50
8. Data analysis and interpretation 51-69
9. Conclusion 70-71
10. Findings of the Study 72-74
11. Suggestions 75-77
12. Annexure 78-80
12.1 Questionnaire 78

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 LIST OF FIGURES

FIGURE NO. FIGURE EXPLANATION PA

GE
NO.
8.1 Pie chart showing the age group of people 52
8.2 Pie chart showing the percentage og gender of 53
respondents
8.3 Pie chart showing the percentage of ocupation 54
done by respondents
8.4 Pie chart showing the percentage of respondents 55
if they support cashless econonmy
8.5 Pie chart showing the exact reeason why 56
respondents support cashless economy
8.6 Pie chart showing the percentage of respondents 57
the mode they use for online payments.
8.7 Pie chart showing how frequently respondents 58
use online payments
8.8 Pie chart showing most preferred mode of 59
payment by respondents in the case of high value
transactions
8.9 Pie chart showing if respondents think Inida is 60
completely ready for cashless economy
8.10 Pie chart showing the percentage what are 61
hurdles respondents think India is going to face
while its road to cashless economy
8.11 Pie chart showing the best way to have cashless 62
economy
8.12 Pie chart showing if respondents will be 63
comfortable without cash
8.13 Pie chart showing the percentage of respondents 64
they feel are safe while doing cashless
transactions
8.14 Pie chart showing the percentage of respondents 65
change their passwords, PIN
8.15 Pie chart showing if respondents store their card 66
details on mobile, tabs, laptops
8.16 Pie chart showing if people think government 67
should promote more cashless payments
8.17 Pie chart showing if reduce of notes will affect 68
society
8.18 Pie chart showing whether india can become 69
complete cashless when other developed nations
are not completely cashless

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 EXECUTIVE SUMMARY

The topic of project study “Study on cashless economy and its impact on society with
reference to Navi Mumbai” is the study about the cashless transactions which came into
limelight mainly after demonetization where the high currency notes of Rs. 500 and 1000 was
banned from 8th of November, 2016. This gave India a huge boost and very first baby step to
use cashless transactions.

This study focuses on cashless economy like what exactly is cashless economy all about,
what are the ways of achieving it also the study says about the various initiatives announced
by government for cashless transactions and the prospects and challenges of cashless
economy. This report also helps us in understanding the different modes of online
payment/transactions like banking cards, mobile wallets, UPI etc. all the major online
payment methods in details. Also, the impacts of cashless economy is being discussed in
details like what will be the impact of cashless economy on various sectors of the nation and
what is the future of cashless economy in India.

This study also contains research methodology where a survey was done in Navi Mumbai and
its subareas where a total of 100 respondents answered the questionnaire related to cashless
economy and transactions.

At last, findings of the study and suggestions have been provided that what exactly is to be
done to have India as a cashless nation where no. of suggestions has been provided in the
report.

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 CHAPTER: 1
INTRODUCTION

4
 INTRODUCTION

The Government implemented a major change in Indian economy on 8th November, 2016 that
was to ban the complete use of high currency notes of Rs. 500 and 1000 which is popularly
known as demonetization.

Demonetization lead the way of something new on Indian economy the population of 1.2
billion country is moving towards a cashless future is it really possible to convert such a
huge country into cashless we will find it later in this report.

1.1What is cashless economy?

A cashless economy is one in which all the dealings are done through electronic means such
as debit or credit cards, Immediate Payment Service, National Electronic Funds Transfer etc.
The circulation of physical currency in cashless economy will be minimum, the Indian
economy currently continues to be driven through 5% of all payments that happen
electronically, the more and more use of electronic means of transfer of funds, or other things
carries out to be India’s development and modernization of India’s payment system.

The essence of system is to shift the economy from cash based economy to cashless one, the
main aim of going towards a cashless economy is to get rid of corruption, or to make country
more advance where the world is going in many countries cashless transaction is common it
is said that Belgium is the most cashless country or economic in the world with 94% using
cashless transactions. The policy also aims at improving the effectiveness of monetary policy,
managing inflation in the economy, maintaining stable prices

The Government is working on various levels to reduce the dependence of cash Prime
Minister Narendra Modi introduced various schemes for both the customers and for traders to
promote mobile banking and e-payments. To support cashless economy it’s important for the
Government to make the habit of people of using the modes of e-payments. Government
encourages transactions like mobile banking, Ru-pay cards, UPI, USSD these are the means
of digital payments Government has also introduced the aadhar based cash payment system
this is mainly for those who don’t have cards or mobile phones. Reducing cash dependence is
of many reasons one of the main reason is to curb black money, illegal transfers can’t be
made without paper notes, curbs illegal activities all together, also it reduces terrorist
activities in many parts of the country. There are various schemes that the government has
introduced and the incentives done by the Government to increase the use of cashless
transactions and boost the cashless economy in India.

1.2 Problems with Current Indian Economy

 The current Indian economy is quite fragile and unstable.

 A lot of black money is in India, as already said that the main idea is to bring cashless
is to remove all the black money which is being used in many ways to bring better
stability and reputation to Indian market and economy.

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 Improper taxation that is the reason GST was introduced in Indian economy as there
will be only one tax under the country.
 Deteriorating infrastructure is also a problem in current economy in business,
healthcare and infrastructure there has been many reports of power failure in major
cities of the nation which includes the capital of India New Delhi, Bengaluru, Kolkata
etc. With Government moving towards a future of cashless economy, it will be
interesting to see how the Government improves all these sectors of Indian economy,
it is a major challenge to overcome but not difficult.
Education sector is also a major cause of worry as this sector is backward with 72%
literacy rate, with the introduction of cashless transactions it is important for all states
to have a proper literacy rates.

1.3 Government Initiatives to encourage cashless economy

 All cash counters which are there in the Government offices should put up BHIM-UPI
QR codes for accepting digital payments which will boost the digitalization and
minimize the use of cash in Government offices.
 Cash counters can send an indent to customers phone to enable payment through UPI.
 UPI is one-touch transaction which is used for transaction of money between the
parties through a ‘unique virtual address’, since its launch UPI is adapted by various
banks fintech companies. The BHIM (The Bharat interface for money)is an extension
of UPI it is a technology which was launched in December 2016, one month after
demonetization
 Cash counters at the Government offices are major sources of payment , by use or
putting of QR codes requires face screening of the customer as well as user, the idea
is to minimize the use of cash and use digital payments to boost the cashless
transactions and economy.
 POS machines in villages expansion of the digital payment in rural or village areas,
the Government through NABARD extended financial support to enable 2 POS
devices each in more than 1 lakh villages with the criteria of population of less than
10,000. These POS were deployed at cooperative societies, milk societies etc. This
benefited the farmers of more than one lakh village covering more than 75 crore
population who will benefit to transact cashlessly in their villages.
 Rupay Kisan Cards for farmers the Government also introduced the scheme for
farmers through NABARD which supported Rural Regional Banks and Cooperative
banks to issue “Rupay Kisan Cards” to more than 5 crore Kisan Credit card holders to
enable them the facility of cashless transactions at POS machines or Micro ATMs.
 Government announced discount of 5 per cent for paid services for railways
passengers which included was catering, accommodation, retiring rooms etc if these
all accommodation was booked by digital means, all the passengers travelling through
railways availing these services got benefitted.
 Government gave discount on the policies which were sold online which meant that
public sector insurance companies provided incentives, by the way of discount or

6
 credit upto 10 per cent of the minimum in general insurance policies and 8 per cent
policies in new life policies of life insurance corporation customers availed benefit
through the use of online policies which sold through customer portals, and the
payment was made by digital means.
 Government cancelled out the transaction fee on digital payments to use of digital
means and boost the cashless economy of the nation. Government ensured that that
there is no transaction fees for consumers and all expenses should be borne by
Government offices or departments.
 There is no service tax on digital transactions for transaction upto RS. 2000.
 Railways passengers which bought the tickets online, Government gave them free
accidental insurance cover upto Rs. 10 lakh. It is now common that many passengers
are buying online tickets for railway journeys, almost 65% of them are buying online
tickets.
 Government gave 0.75% discount on government fuel if the price reduced or increase
customers paying through digital means will get that discount, although many
customers are still buying fuel by using cash system, this is area where Government
needs to bring more iniatives
 Getting more vehicles to adopt FASTag.
 Push to National common mobility card in metros to cover common transport and
schemes to entertain the customers, continual digital evolution is the key to success
for cashless economy.
1.4 Challenges of cashless economy

Government’s decision of demonetization drive is supposed to benefit the country, but there
are certain challenges that needs to be dealt properly if the nation has to see a change in the
economy of the country, some of the challenges of cashless economy are as follows:

 Digital literacy: Only the high class or elite class people has a good knowledge of the
digital means like how to use, when to use, implications etc,half of the country do not
know how to use computer, so digital literacy improvement is major challenge before
going to cashless economy.

 Improvement of infrastructure: Government needs to improve the infrastructure in

many areas which includes in public and private sector both, which includes 24*7
internet, free WiFi everywhere, proper electricity in rural areas as well as urban areas.
Without, proper infrastructure it is difficult to get digital transactions and going with
cashless as what will happen if in the middle of transaction there is power failure or of
the digital means are not working.
 Security: Security is the matter of concern in cashless transactions, as there are lot of
cyber attacks in India, so the government needs to adapt proper security for cashless
transactions, especially in the banking sector.
 Resilience: This is a big issue, if a country does not have a cash payment option then
what to do if the cash supporting system will be unavailable if the connectivity fails
then there is a risk of whole system shut down without a proper backup options.

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 1.5 Prospects of cashless economy

 The JAM infrastructure is reaching every remote corners of the country or to every
citizen of the country to help going cashless transactions, almost more than 24 JDY
jan dhan yojana accounts a government scheme,127 Aadhar identity cards, 90 million
mobile phone users are in India so JAM infrastructure can be used to promote
cashless transactions.
 Number of credit and debit cards holders are to be increased to 25.5 million and
almost 654 million respectively, demonetization drive has forced people to learn
online transactions.
 More people have started using RuPay debit cards and Aadhar for digital transactions,
this will help to facilitate a less cash economy.
 With increase of mobile banking applications, various applications of different banks
the use of these applications are growing and is expected to minimize the use of cash.
 A large number of government transfers are made through JAM mode which will help
to get people about the awareness of digital transactions.
 NPCI has promoted Aadhar based payment system which has people in cashless
transactions and newly scheme launched by the Government Unified Payment
Interface(UPI) is expected to give cashless economy a huge boost.

8
CHAPTER: 2 OBJECTIVES OF STUDY

9
 OBJECTIVES OF STUDY

RESEARCH OBJECTIVES

 To study about cashless economy

 To study the impact of cashless economy on society of Navi Mumbai.
 To study the challenges and prospects of cashless economy.
 To make awareness to people about various cashless schemes introduced by
the Government of India.
 To study about the digital modes of payment which India is going to adopt.

2.1 Advantages of cashless economy

As the country moves towards cashless environment after demonetization, the

government came up with various schemes but will it be able to influence people in the long
run only time will tell.

But, to clear public doubts about cashless economy what it holds in future, here are some of
the advantages of cashless economy.

 Saves time and money: Government and companies will get efficient and they can
reduce costs if they are no longer required of manual accounting work to be done. The
costs which are related to accounting and handling of cash is very high, so cashless
transactions can help to save both time and money.
 Taxation: Taxation will help in economy growth of the country as with less amount
of cash at home and more in bank will have no scope for hiding income and evading
taxation and where there is more tax payers, the country will get benefit as there will
be less rate of taxation.
 Reduce illegal activities: When people will be cashless, there will be less chance of
getting involved in theft, crimes there will be no option for indulging cash into illegal
activities, crubbing illegal activities is one of the major reasons to go cashless.
 Leads to transparency and accountability: With cashless, it will be lot easier to
track the flow of amount of money with every transaction which the users are doing to
track them, this will make the system more system and compliant. This will benefit in
the long run as it will have a positive impact on business and economy as a whole.
 Safety to people: Cashless can bring safety to people as there will be less chance of
robbery and people can feel safe when they are doing transactions, also people don’t
need to carry bundle of paper-notes as well along with them as only having a pack of
cards will be sufficient for them to carry out the transactions or required amount.
 Easier to track black money: This is one of the most important take for cashless
economy of the Government as to stop black money and corruption going cashless is
very much needed, while going cashless it will be easier to track black money and
illegal transactions as all the records of the transaction will be transparent to the banks

10
 which have been recorded for the transactions done by an individual which will lead
to fall in corruption level of the country.

2.2 Scope of study

Cashless transactions are one of the fastest growing things in the world today so in order to
match with today’s world the government of India announced demonetization as a result in
which people were banned the complete use of Rs. 500 and 1000 high currency notes, this
also resulted in digital transactions as government made the first move towards cashless
economy.

This study will also know to find out what is the scope of cashless economy in today’s world
also related to India.

When demonetization was announced then the whole nation was taken aback as the use and
dependce of notes was high for people and the people were tensed as what to do now as notes
have banned from using, however amid all these tensions one sector was there who was
gaining huge profits this was mobile wallets sector companies like PayTm mostly came into
limelight after demonetization and many street vendors, hawkers and small income people
started to use PayTm as a transaction medium. It is expected that mobile wallets has a great
scope and is expected that by 2020, more than 80% people even in rural areas will also start
using digital transactions with the help of mobile wallets.

Scope of study on cashless economy are:

 The main and overall scope is to make all Indians aware of the benefits of cashless
transactions and also the ways of doing transactions digitally which will help India
become a cashless economy.
 To make change there will be need of lot of efforts from public and the government
which we see as a cashless economy in near future which will lot depend on digital
India programme as well.
 On being transformative which means that to realize tomorrow’s India which is
cashless transactions and lot of work to be done in IT sector and for that many jobs
will be given to the youths to make India cashless.
 We can get to know that the government will introduce many more schemes to argue
people to use cashless transactions as it will curb black money in future and will also
have great impact on Indian economy.
 The cashless India/economy puts together a large number of ideas, thoughts process
which will come together into a single, compressive ways so that the ultimate aim of
cashless economy can be achieved in long run.
 Many job opportunities will be created as Digital and cashless India project are
coordinating each other so in order to get the target there will be many jobs in IT
sector up for grabs in future.
 According to economic times, a English newspaper cashless/digital India will help the
nation to increase GDP by 20-30% by year 2026.

11
CHAPTER:3 LITERATURE REVIEW

12
 LITERATURE REVIEW

Cashless economy is not the complete absence of cash, it is an economy setting in which
goods and services are to be brought and paid through electronic media.

Woodford(2002), Cashless economy is as one in which it is assumed to have no transaction

frictions that can be diminish through the use of money balances that accordingly provide a
reason for holding such balances even when they rate of return.

According to 2015 report, India’s unbanked population was 233 million. Even for people
with access to banks, the capability to use their debit or credit card is imperfect because
wallet users had provided the no. of mobile banking users and 3 times the no. of credit card
users.

Roth(2010), realistic that developed countries of the world, to large extent are moving away
from paper payment instruments towards electronic ones, especially payment cards, some
aspects of the execution of cashless economy are improved by e-finance, e-money and e-
exchanges.

According to another report in 2017 after demonetization, there was report that Indian
economy is cash based, so much that MNCs like Amazon had to incorporate cash on
delivery just to tap into the Indian market.

L Dawson(2016), in his report on the critic of the Government, ample arrangements should
be made in all parts of the country, especially the Government should send their volunteers in
the rural areas of the country to talk with low income people that how the cashless economy
of the country will work, also adequate safety measures to guard online transactions against
fraud which is very common in India.

The critics further argued that due to unavailability of cash many people died and lost their
jobs, so it’s the responsibility of the Government to ensure that everything goes according to
a well-planned system, as in country like India it is tough to deal with proper electricity in
some areas of the nation, 24*7 internet etc.

Former RBI Governor Raghuram Rajan said that, “post –demonetization, e-transactions
volumes reverted back to earlier trends.” He also added that rise of digital transactions is a
blip which is hard to understand because in such a vast country like India you need to have
proper vision to have cashless transactions.

(Team, 2016), paper clarifies the impact of Demonetization on the accessibility of credit,
spending, level of activity and government finances. The impact of the shock in the medium
term is a function of how much of the currency will be replaced at the end of the replacement
process and the scope to which currency in circulation is extinguished.

Santomero (1996) analyzed the various choice forms of money such as prepaid cards, cash
cards electronic purse, smart cards etc and their demand for medium of exchange with the
help of Baumol-Tobin Model. It was found that range of use of asset decreases with the fall

13
in household income, usage patterns of medium of exchange differ with the same income but
different allocation of income among consumption of goods and households tend to use the
higher interest medium of exchange to buy the good that constitutes the largest amount of its
income etc.

P Manivannan (2013) in his research paper "Plastic money means less payment and the use
of more card payment system. It was then, when in his review of cashless economy he choose
that this economy will be more beneficial in the long run for the country or every state, but it
will take more time to reach out to people in rural areas rather than urban areas, as in rural
aeras people will find it difficult to understand the basic needs of the country, or the
necessary items which might be used for the cashless economy and for digital transaction.
However, today, with the development of banking industry, fixed income group also begins
the use of plastic and electronic money payment systems and especially credit cards.

(Subhani 2011) conduct a study on the "plastic money / credit cards for kudos between now
and then." The study was based on information of the magnetism of plastic and its impact on
the choice for the use of money. The research found that the preference for the use of plastic
money / credit card has several pros and cons although it is easy to use and affordable.
According to the consumer behavior it is stated that plastic money is a form of inspiration for
a consumer to spend. The study suggest that the preference to use plastic money to have a
positive relationship with the easiness of use because the principle of a credit card has been
linked to usage with psychosomatic phenomena that people lean to spend less with a credit
card and spend more with the same amount of cash in hand. She also had a say on the
multiple usage of both the cards as well as cash which has been used by many people in
different ways but also had a good number of card used in earlier days as India was always
ready for a cashless country, but for that like all others Shubhani also said in her review that
it will take along time for a country of 1.2 billion people to become cashless country.

Manyul (2016) in his article mentions various of the benefits of cashless transactions to
nations like increased GDP by using cards and reduced social cost, increased in financial
inclusion due to acceptance of e-payments, reduce the shadow economy, reduced in cash
payment enables e-commerce growth and facilitated trusted transactions online. He says that
at 1.7% of GDP, India incurs a much higher cost of cash compared with most developed
economies. Every changing digital world had a huge impact on Human resource. It had
created an impacts on their jobs and their workplaces. He mentions five challenges that the
human resource has to in the present as well as in the future. The five challenges are- (i)
figure out when processes should be automated, versus when a human face or voice is the
best route, (ii) healthier communicators in order to efficiently leverage the digital space, (iii)
simplify the data and provide a clear picture of their up to date workforce as the data are
spotted among various systems and acquired in varied formats, (iv) fear from the legal
department of using social media and (v) HR has to estimate what function can be automatic
and provide beloved level of services.

He, basically had to say about the main challenges and impacts and advantages which the
country is going to face in growing upto cashless economy, he also clearly stated that how the

14
country’s GDP is going to increase or decrease that is not the matter, but the fact is to make
India a cashless country that is really big chance and challenge as well, also after
demonetization the country has already seen so much changes in the nation’s economy so
now after 2-3 years that the country will settle down and after that the government should see
as making India as acashless nation by introducing diverse schemes.

Bharath (2018) in his review he mainly said about the future prospects of being cashless
advantages, limitations and the use of digital transactions in the country like how much it is
ubeen used, what to use and how many types of digital transaction can take place , Bharath
also mentioned the challenges like the digital inadequancy of people, inability to use the
modern technologies in many parts of India and much more, he also come up with the report
that almost half of the people till the start of 21st century didn’t know how to use the
computer, so it is going to be difficult for the country to adapt soon the upcoming
technologies and standards of using digital transactions. So far, the government has done a
good job by making up a very good run of schemes like giving discounts on many items like-
railways tickets, petrol and diesel etc. But, now the job of government has just begun in his
article he had mentioned that how the illiterate people just use cash in order to get some
resources fulfilled. The BPL(Below Poverty line) people also are living in the nation so for
them it is very difficult to get digital transactions as they will find difficult to use mobile and
ATM cards, so for these type of people Government has opened various schemes and various
accounts for these people. To make country like India a cashless one it is a big question mark
and it is almost impossible to make such a huge country cashless.

Srinivas, N. (2006) in his study ―An examination of the default in credit card payments‖,
has tried to analyse the socio-economic profile of the defaulters of credit cards, to identify the
set of factors which contributed to such defaults and suggest relevant measures to minimize
the default cases. Analysis of reasons indicated that economic adversity is the major reason
acknowledged by majority of the sample units follows by strict payment structure and loss of
job/business. The main proposal is that the banks concerned ought to redesign the payment
structure of credit card defaulters in a flexible and affordable installment.

(Shendge & Shelar, 2017) paying attention on impact and importance of cashless policy in
India. According to Government of India the cashless policy will increase employment,
reduce cash related robbery thereby reducing risk of carrying cash. Cashless policy will also
reduce cash related corruption and be a focus for more foreign investors to the country, leads
to modernization of payment system, fall in the cost of banking service, diminution in high
security and safety risk and also hold back banking related corruption. The financial shelter
over the digital payment channel is important for pushing the cashless economy idea. The
retail sector still has large number of cash transaction and payment through cash is yet to pick
up and card is the one of the most secure, convenient mode of cashless payment in retail
market. Digital transactions are traceable, therefore easily taxable, leaving no room for the
circulation of black money. The whole country is undergoing the process of reconstruction in
money communication, with e-payment services gaining first-time momentum. With the
speed on which the Government is getting with cashless economy, it is time for India to
fasten seat belts and be ready to live with cashless transactions and be used to get up with

15
digital transactions, government has ensured many services to people and is ensuring that
people don’t face difficulties while doing digital transactions that is going to be more
important, they also mentioned about the speed upon which the current government is
working to make india cashless country after demonetization there is more chance that
government will put more iniatives like these to boost up digital economy and digital
transactions of the nation.

Devlin (2007) “An Analysis of main and subsidiary credit card asset and spending.” This
study seek to scrutinize why most various credit cardholders have a “main” card (i.e. a card
used more often than others) and “subsidiary” cards (i.e. cards used less often or only in an
emergency) and the spending pattern connected with main and subsidiary cards. This study is
a qualitative in nature, using a survey which contained open-ended questions to acquire data.
Response were subject to content analysis to categories the reasons given for having a main
and subsidiary card. Results show that 85 per cent of the 141 respondents indicated that they
had a main card and the most commonly quoted reason for having such a card was the
superior discount and promotions which were presented by the card issuer. Not surprisingly,
main cards were used for the broadest range of transactions while subsidiary cards were used
for a more restricted range of transactions, a majority saying that their subsidiary cards were
held for “stand by purpose”. The results suggests that managers who market credit cards
should aim to ensure that, in all times, the discount they offer, the promotions they put
together and their trustworthiness schemes are superior to those offered by competitors. By
meeting these aims, higher number of consumers, who are numerous cardholders, are likely
to use their card as a main card, thereby generating more income for their credit card holders
which will have a great impact on both the customers and the economy of the country as well,
in his research he also said about the collision and benefits the country he is going to get on
the basis of cashless economy.

Bartopia (2016) studied cash less payments in India. He developed a academic model
of payment decisions made by consumers and sellers. He found that the expediency of cash
and was of importance that it will be beneficial for both the sellers and buyers but in the long
run, he came up with the winding up in his review that after demonetization by the
government since it was the way to stop black money and prevent illegal cash flows in the
country, but at the start it failed but promoted a way of digital transactions in the country like
people literally started using digital means of payment in India which is like net banking,
PayTm small vendors and daily hawkers started using this means of transaction, this will
result in the long run and will have a positive impact on the country with the positive use of
digital payments in India.

Dhanrajetal (2016) The authors attempt to portray the role of Regional Rural banks (RRBs)
in shaping the rural economy and rural credit structure. The RRBs were established in the
year 1975 to shape the rural economy by providing credit to the needy segment. These
segments were excluded by the formal banking systems due to their inability to access to
loan. The capital requirements were exclusively predestined for small and marginal farmers,
rural small scale producers, labourers. These unbankable populations were able to improve
the income generating activities with the help of the capital that they received from RRBs.

16
But very soon the bank becomes sick due to poor repayment and mounting NPAs. The banks
were not planned properly and failed to understand the real need of the capital. Also there
was no follow up for the loans provided to the needy segment. The traditional production
approach also led to huge loss for most of the small time producers. This is a kind of
realization that only providing finance will not be adequate, the banks should guide to make
them understand the essential demand supply conditions as well as market need. But neither
the banks nor the implementing agencies are able to see the gap and as a result of the same
the outcome are below the expectation level. He also in his review had a very positive impact
of the regional rural banks had to play in the country to increase the use of digital transactions
and to boost cashless economy in India therefore, it is important for these types of banks to
play the role of volunteers in the case of digital transactions as to promote cashless
transactions and also to stick with people to train in rural areas like how to use digital means
and how to do digital transactions.

Bhatnagar (2017) The author describes the awareness and adoption of new age banking
facilities by the rural poor. It has been witnessed that after reforms of financial sector, most of
the banking sector. Services are widened their operations by expanding the banking
operations in unbanked areas. But even after the initial momentum most of the banks are not
able to retain the expansion of the services due higher cost of serving the rural customers.
Since, the earnings are less, providing a basic banking service is a challenge. The traditional
banking services may not be able to provide the services are often become more complicated.
As the technology started playing an important role, the costs of delivering the services are
also reduced drastically. But the system is not full proof. Lack of awareness and trust on the
system are the major hindrance for the proper implementation of the system till date. As long
as the consumers are not going to enjoy trust, it becomes difficult for the service providers to
adopt the technology based services which is the new mechanism for financial inclusion and
other value added services. Serving rural areas in a cost effective manner is surely an
important and uphill task for the service providers and this should be shorted out through
proper implementation mechanism.

Ruksan (2017) in her study she had to say about the various card payment system in India
different card payment system in the country which includes MobiQuick a digital transaction
net banking debit or credit card system in her review she found that there is amore need of
safety and banks or the government also need to put more emphasis on security and needs or
urges people to stay alert as there are lot of spams, fraud and various things going on while
doing digital payments, so it is the task of banks to tell people to never ever share there
password or the other information on any platform. As India is gearing up for the cashless
transactions it is an important step to tell the citizens of the country to be aware of the
demerits of digital modes of payment in a positive way like how to stay alert, how to report
the technical team if there is any problem in digital payments. She observed in her study that
more than half of the country daily are witnessing the online frauds or cyber attacks in their
accounts while are facing lots of problem in their different types of payment system as well.
It is important to take baby steps to encourage digital payments but to hold special seminars
in such a way that all people in the country are aware of the flaws of digital payment system

17
and also it is responsibility of the government to clear the flaws in digital transaction to boost
the cashless economy of India.

Midha (2018) The author discussed the issue of digitalization process and effectiveness of
digital India campaign. The programme is a good initiative but it has certain barriers which
need to be overcome. Digital India campaign aims to create a cashless society which has its
own advantages. Implementation phase is surely problematic as the concept is new but over
the time period this has to be seen from the perspective of customers. It is high time to
discuss the relevant issues with the customers so that the existing barriers may be removed.
As if the barriers continue to be in this system then it is very difficult to achieve the goal of
the government the digitalization process has many problems still in 2018 when the study had
been done there are many cyber attacks still taking place in the country so it is very important
to curb those issues and the people related with those issues or the government come up with
some innovative ideas to take action against those cyber attacks on the use of digital
transactions or it is very difficult to achieve cashless transactions or to have cashless
economy as digitalization will paly a vital cog in cashless economy.

Bappaditya Mukhopadhyay (2016) These selection are a unit prejudiced by the handiness
of cashless transactions weigh against the appeal to evade taxes. Significantly higher
proportion of people builds cashless payments currently (12.61% in 2014 as compare to
three. 47% in 2011); Most growth in cashless payments has been through itinerant payments.
The variables in addition to also the price of cashless transactions have a CAGR of nineteen,
91% and 24.14%, respectively. A compartmentalization of amendment agent roles in a very
industrial context, acknowledging the distinctive relationship that club staff has with
customers. It highlights, however his could be leveraged to boost new development and client
adoption. In specific, sturdy bonds exist between agents and clients because of the frequency
of customer visitation, and trust is expedited by their membership standing. Employees
during this study incontestable a capability to be familiar with and answer consumer want in
related ways that, and mirrored in some detail on the consequence of client adoption of the
cashless card on their role and responsibilities.

Rachna & Singh (2013) Study expected to spot the issues and challenges of electronic
payment systems and offer some solution to progress the e-payment system quality. With
respect to the payments method they have analyzed, it is unworkable to say that any one of
them is perfect, although each one of them has reward as opposed to others. If the client
wants to maintain space to yourself then they choose those payment methods which
guarantee a higher level of privacy such as e-cash or Net Bill Checks. If the main concern is
security, they should use, smart cards. The study conclude on the note that, successful
implementations of electronic payment systems depends on how the security and privacy
scope perceived by consumers as well as sellers are popularly managed , in turn would pick
up the market assurance in the system.

18
CHAPTER:4 RESEARCH METHODOLOGY

19
 RESEARCH METHODOLOGY

Research methodology is the method of doing or finding the best way of doing a research on
a specific topic, there are different types of research are done on different types of research
topic.

It is defined as’’the process used to collect information and data for the purpose of making or
deciding business decisions or other decisions.” The methodology includes public research,
questionnaire, interviews or surveys.

This particular topic research methodology has been taken by questionnaire where list of
questions were given to respondents and they had to answer those questions.

4.1 Data collection methods

There are various types of data collection methods are involved while doing research study,
basically there are two types of data-primary data and secondary data.

 Primary data: Primary data are those data which are collected fresh and for the very
first time and are said to be original in nature is known as primary data. Observation
method which is collected from field by observing is type of primary data, interview
method, questionnaire method, case study method, panel method, survey method
these all are the methods of collection of primary data.

 Secondary data: Secondary data are those data which has been collected by someone
else and is not original in nature or which had been passed through statistical process
is known as secondary data.

In this particular project study the data collection method has been primary data with the
help of questionnaire with respondents given questions to respond with which is truly a fresh
data based on questions which respondent has to answer.

4.2 Sampling methods.

Sampling helps a lot in the research work which you do, it is an area which determines the
area of the research work which has been done it helps to describe the best way or the prefer
output which a researcher wants to put in his research work. If something goes wrong in the
sample work then it will definitely affect the final result of the research work which
researcher has done, there are lot of methods of sampling techniques which helps us in
getting the final size or sample, there are lot of sampling techniques but are mainly
categorized in 2 main categories which are probability and non-probability sampling.

Probability sampling technique uses randomization to make sure that every element gets an
equal chance to be a part of that sample, this sample is also known as random sampling.
Types of random or probability sampling are:

20
  Simple random sampling: It is type of random sampling where every elemnt had an
equal chance of getting selected in the population.

 Stratified sampling: This techniques divides the elements of the population which
has been taken into sub-groups and which is known as strata based on similarity in
such a way that elements within the group is homogeneous and heterogeneous among
the other sub groups which are formed, we need to have prior information about the
population to create or have sub-groups.

 Cluster sampling: The whole population is divided into cluster or groups then the
clusters or sections are selected randomly. Clusters are identified by sex, age, size etc
it can be done by single stage cluster sampling, multi stage cluster sampling.

Non-probability sampling is the method of sampling which does not rely on randonnization,
this technique is mostly used or reliable on the researcher’s ability to choose elements for a
sample, the results for sample may be biased and will make difficult for all part of population
to come under it, this type of sampling is also known as non-random sampling. Types of
non-random or non-probability sampling are:

 Convenience sampling: This type of sampling is based on the samples which are
available it is costly method and also when the samples are available.

 Purposive sampling: This type of sampling is based on the purpose of the study of
the researcher, it is a type of sampling only when the purpose will be suited for
sampling.

 Quota sampling: It represents the representative of the population, it is more a type

of pre-set standard type, proportion of trade should be same as population size in this
type of sampling method.

 Snowball sampling: This type of sampling is used when the entire population or
quantity is unknown to researcher or rare. Therefore we will take help from the first
element of population which the researcher wants to select in his sample and then ask
him to recommend other elements who will fit for sample size.

21
 4.3 Limitations of study

Every research work which is to be done has some flaws, limitations in the research therefore
in this particular research study there are some limitations.

The study is done to to minimal sample size of 100 respondents which was taken in the
survey and the survey was done in Navi Mumbai, so there is a chance that the response odd
people may not reflect the entire population, as the sample size was restricted to 100
respondents and was done in the city of Navi Mumbai or suburban areas.

Suggestions given at the end of study are purely based on the survey and the secondary and
primary analysis done in the research.

22
CHAPTER: 5 IMPACT OF CASHLESS ECONOMY

23
 IMPACTS OF CASHLESS ECONOMY

Impact of cashless economy on economy growth

Cashless economy is termed as an economy where there is no use or limited use of cash while
doing transactions, mostly transactions are done through online payment methods. Cashless
economy has come into India after the government’s decision to ban high currency notes of
Rs. 500 and 1000 respectively, which is also known as demonetization, in this chapter the
topic is the possible impacts of cashless economy on various sectors.

Possible impacts of full cash abadon

 Banks will be in favor of cashless economy as there will be less cost of printing of
currency notes which involves huge costs, storage or security of paper money which
will be welcome move for banks.
 Possiblity is high that cashless economy will reduce the black money and thus, will
have huge impact on corruption and bribe takers.
 Restriction of using cash will also impact on the movements of criminals or terrorists
organizations in country and other important places in the country.

Now, let us look in detail about the various sectors in which cashless economy can have
its impact on different sectors of the country.

5.1 Impact on banking sector

Banking sector plays an important role especially in printing and storage of cash or
currencies, RBI which is an apex bank of india will have a major relief of printing notes
but there are some of the impacts on banking sector because of cashless economy they
are:

 If we look at immediate ways with no cash, there will be no need or requirement

of ATMs or cash management services which banks spend a lot on security of
protection of cash, so this all will go away. Result of which jobs will be lost of
security personnel.
 With the rise of electronic payment, there will be more demand of digital banking
platforms and investment on these areas of banking sector, as a result it will rise in
popularity and critically.
 If we look at longer picture, transactions done by customers can be easily tracked
down and the richer data set by banks and others to help develop future products
and services.
 If there is going to be cashless then people will spend on e-payment that means
the speed or velocity of money movement will increase at more consistant rate
which will have a positive impact on banking sector.

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 5.2 Impact on business

The impacts of cashless economy on business sector are as follows:

 Businesses will be really strong that means while having an cashless economy it
means that companies or organizations can deal while doing online transactions or
transactions through digital means which will be beneficial for both organizations and
customers, for small businesses like peddlers, hawkers this will be a little problem at
the star but cashless transactions might do wonders for them also because customers
for small trasactions do PayTm, or payment through digital means as well.
 Another positive impact of cashless economy that the business sector will have that
there will be proper audit in big organizations that means that everything will be clear
and no transparancy while doing auditing of organizations, this will be positive
impact of cashless transactions or society for big organizations.
 There will be more use of e-payment as there will be limited or no use of cash so this
means that organizations will use more and more digital means of payment this will
also have a positive impact for the boost of cashless economy in India.
 Wallet holders in business will get benefits of cashless economy this means that small
traders or manufacturers can also have a little influence on the boost of cashless
economy that means little or small vendors need to adopt quickly the means of digital
transactions also after demonetization the impact of cashless economy on vendors was
huge as for small purchases people were not buying goods from them due to lack of
notes or exact changes, this resulted initial loss of these types of businesses, but later
they adopted the cashless transaction and had positive results after that.

So, basically business sector is going to have a positive impact of cashless economy
as a whole and they are ready to adopt cashless economy as it will be beneficial for
them in long run for both small and big enterprises.

5.5Impact on education

The impact of cashless economy on Indian education sector till now is minimal or in future
is expected to be minimal, impact after demonetization or cashless economy are:

 The verdict of the central government to remove high-value bank notes to curb
unaccounted cash will hurt education institutions that consider donations or capitation
fees for admissions. Accepting as well as accounting donations will become difficult
because of the demonetization drive.
 Education sector was not resistant to the Indian theory of 'you can buy everything
with money'. This shift of demonetization will positively restrain this mentality of
many in the country.
 Nursery admission, private education institutions and professional higher education
together with medical and engineering are the segment which recognize donations
widely. For the first time, these segment are going to feel the impact in a big way.

25
 Private educational institutions take colossal amount of offerings in Cash which is
40% to 50%.
 More than the fees of the course. We look forward to that demonetization will impact
the recipient. Admissions in private educational institutions and medical college
admissions comes tagged.
 The length of donations without a glitch. The donations in medical colleges is
typically more than 100% of the fees. Demonetisation will contact both admissions
and also the receipt. MBBS seats is some colleges goes for Rs40 lakh to Rs60 lakh,
while MD seats has a variety of Rs 2 crore price tag on it. Similarly, engineering and
management watercourse seats have a price tag between Rs 2 lakh to Rs 10 lakh each.
This shift can alter the course of luxurious education which can be made more
reasonable devoid of the capitation fee.

5.4 Impact on common man

Common man means aam aadmi in hindi this common man tag or word is very important in
context of India whether related to politics, economics or bollywood. As common man or
people are one who decides the fate of nation, so here are some of the impacts by cashless
economy on common man:

 At the initial stages of demonetization when the issue of high currency notes of Rs.
500 and 1000 were banned by the central government which led the first stage of
being cashless India were totally negative as after demonetization many people lost
their lives standing in long queens for note exchanges in banks, ATM machines etc
there were many reports of many people died during this process so the initial stages
was very negative for this iniative by government.
 There is many positive signs of cashless economy or society with respect to common
man i.e many people have welcomed this move from the government as being
cashless will reduce crime rates, corruption, terror funding and also easy track record
of money.
 If we look at the lower sections of our economy i.e below poverty line people based
on income or low castes there the impact of cashless economy is not so positive as
many people living in below poverty line category had troubles and inconvenience
while doing online transactions or payment of digital means as these kind of people
are used to using cash so it is difficult for them to use digital means of payment.
 Also, in rural areas of the country which includes village areas there there is no proper
electricity, or proper internet connection so people there are suffering most till now
even after 2 years of demonetization, people in those areas blame the government for
not providing suitable facilities or providing them good infrastructure.

5.5 Impact on agriculture

Agricultural activity is said to be the most encouraging activity in India, many people is
involved in agricultural activity and lot of thm are professionals in these activities ,
agriculture or farming is the source of livelihood in those areas.

26
Agribusiness is broad term used for agriculture which involves all agricultural production,
distribution and processing. It includes food, forestnad also fiber production or their by-
product utilization and agricultural chemicals. Impacts of cashless economy on agricultural
are not so positive.

Rural & deprived ample he big one is that poorer people are less likely to have access to
financial services, and are more likely to use cash in their daily lives. Unless they were
contracted free or cheap entrance to financial services, they’d be at a disadvantage in being
able to purchase things in a cashless economy.

 Big farmers and business traders who have unaccounted cash as well as the product
traders, artisans and commission agent in the mandis who deals on cash will of
necessity feel the pain.
 Resurgence of loan dues when payments are made in the course of cashless
transaction, most of the farmers and agribusiness people are actual fatalities because
when their amount/payments are directly credited to their account.When they have
loan toll in the bank, it is easy way for the bank to remove loan amount from their
account. It benefits the banks and it disbenefits the agriculturists and traders.
 Income of commission agents comprise both farm and non-farm. The shift will lead
to show separate declaration to banks while depositing cash.
 Agricultural income whether the amount is Rs 500000 or  Rs 1crore, they will not
have any problem as agricultural income is exempt from income tax. However, they
may face problem during declaring non-farm incomes,” Commission agents include
huge cash transactions and earn benefit on lending. They contract in real estate, rent
machinery, and have petroleum pumps among various other activities.

Suggestion for agricultural Cashless economy

First and principal thing is to set up more number of rural banking with digital mode of
system alongside with swiping machine and other infrastructure to provide easy contact by
the farmers and agribusiness people.

 To include the gate to gate knowledge and working out program for both rural heaps
and rural business people campaign through representatives of the government
organization. further organizations like college students plus NCC, NSS, Rovers &
Rangers and other Volunteers Including Teaching staff.
 Maximum utilize of media for awareness and safety measures to use Cashless Rural
economy.
 To formulate use of both Government and Non-Government Organization to form
alertness and also remove their fear of cyber fraud and hacking mind set to safety of
Cashless economy. Government should pledge the safety and security, when
anything/any transaction went erroneous and quick motion of the problem through
Grievance Redressal Mechanism.
 Internet connectivity with lofty speed at low-priced rates, more bandwidth
availability, high cyber security support by strong and dominant laws against

27
 cybercrimes. Before deduction of loan dues, banks should let somebody know and
inspect their repaying capacity, without their knowledge banks are not suppose to
deduct the loan dues. There is a need to increase rife knowledge and put to rest the
fears amongst the public to use these facilities. Government of India has already
initiate major drive for sensitizing civic to make most use of these avenues.
Simultaneously, issues like connectivity, security and simplicity of transactions, data
protection and user charges are also being addressed. In the long run, this would offer
a large boos.

Let’s have an understanding about digital transactions now. Did India become a cashless
economy in two years of demonetization. India has not completely adopted the method of
digitalization. Indians still prefer holding cash in hand. Not many regions especially the rural
areas, have been comfortable in using digital portals. But it would not be wrong to say that,
demonetization in fact did boost the country’s digital platform.

RBI releases monthly data of payment system on its website, and looking at the digital
performance, India has seen expansion in that section. But remember so has cash.Data given
by RBI reveals that, NEFT transactions were at 123.05 million in November 2016 month
value up to Rs 8,807.88 billion. This rise to 186.7 million by end of March 2017, aggregate to
a massive Rs 16,294.5 billion. The growth increased further to 212.01 million transactions in
volume terms in March 2018 worth Rs 22,540.77 billion. In the first half of FY19, NEFT
transaction stands at 181.01 million in volume terms already by end of September, having
worth Rs 18,015.5 billion. Meanwhile, transactions using IMPS stand at 36.17 million in
November, 2016 value Rs 324.81 billion, which increased to 67.41 million valuing Rs 564.68
billion in March 2017. It does not end here, IMPS transaction further rise to 110.15 million in
volumes worth Rs 1,038.04 billion by end of March 2018, and by end of September 2018,
this stands at 135.74 million worth Rs 1,256.4 billion.Usage at Point of Sale (POS) has also
seen growth, as it was at 236.47 million in November 2016, rose to 271.17 million in March
2017, further to 318.9 million in March 2018 and to 362.75 million in September 2018 in
volume terms.In value terms, transactions at POS stood at Rs 321.74 billion in November
2016, then moved up to Rs 356.99 billion in March 2017 to Rs 418.57 billion in March 2018
and now stands at Rs 458.41 billion by end of September 2018.

 Cash withdrawn Now, let's have a look at the cash withdrawn from ATMs. Debit
card usage at ATM was at 561.36 million in November 2016 worth Rs 1,234.52
billion, that rose to 710.11 million worth Rs 2,259.46 billion in March
2017.Performing a debit card transaction at ATMs has been rising consistently, as
transactions stood at 774.94 million by end of March 2018 valuing Rs 2,663.50
billion.
In first half of FY19, debit card usage at ATM already has reached to 798.65 million
transactions worth Rs 2,690.60 billion as on September 2018.Rise in cash transactions can
also attributed to increase in currency-in-circulation (CIC) of India India's  CIC which

28
declined to Rs 9,383.78 billion in December 2016 (as demonetised cash came back), RBI
continued the remonetisation task at full speed, and the Indian currency chest then stood at Rs
13,352.66 billion by end of March 2017.As per data of RBI, India has already been
remonetised by end of March 2018, where CIC was at Rs 18,293.48 billion, and now stood at
Rs 19,252.44 billion in September 2018.Latest data of RBI suggests that, India's CIC has
already reached to 19,612.63 billion as on October 26, 2018.Despite, having ample cash,
India still faces cash crunch and ATMs running dry scenario every now and then. From the
exceeding, Demonetisation definitely did gave a push to digital transaction, however, if
Modi's vision of Digital India really needs to be successful, then a rigorous method must be
brought in.UPI  transactions have grown from Rs. 0.5 billion in October, 2016 to Rs. 598
billion in September, 2018. BHIM Pay transactions using UPI is currently being used by 1.25
Crore people. BHIM transactions has gone awake from Rs. 0.02 billion in September, 2016 to
Rs. 70.6 billion in September, 2018.RUPAY Card is used both at the Point of Sale (PoS) and
for e-commerce. Its transactions have enlarged from Rs. 8 billion before Demonetizations to
Rs. 57.3 billion in September, 2018 for PoS and from Rs. 3 billion to Rs. 27 billion in e-
commerce. Well, looks like India is still far away from becoming a cashless economy

29
CHAPTER:6 DIGITAL PAYMENT METHODS:ROAD TO
CASHLESS ECONOMY

30
 Digital payment methods: Road to cashless economy

The digital India programme is the programme of the government to promote various
methods of digital means of payment it is a flagship method or programme which comes
under the Government of India with the vision to convert India into the digital empowered
society and knowledgeable economy which will lead to cashless economy which is an
ultimate aim of the government.

To promote cashless transaction which will boost India to become cashless economy various
modes of payments are there in digital payments they are:

1. Banking cards
2. Micro ATMs
3. Mobile banking
4. Mobile Wallets
5. Point of sale
6. UPI
7. AEPS
8. USSD
9. Internet banking
10. Banks pre-paid cards

These all are some of the means or mode of digital payments which will encourage more and
more people to use these payments for cashless transactions and to give a major boost to
cashless economy in India. We will look each of the modes of payment one by one in this
particular chapter.

1. Banking cards: Banking cards include plastic money which means debit cards, credit
cards, cash or travel etc. these cards offer consumers more security and convenience
or easy method to use more than any other payment method, these cards mainly
requires 2 step or 2 factor authentication for safety of payments which includes secure
PIN and OTP(one time password). MasterCard, Visa are some of the examples of
banking cards These cards gives customers power to buy from online websites’,
stores etc with the help of banking cars, it also saves customers time and is also very
quick on response.
To get these banking cards customer has to provide Know your customer(KYC)
information, then after that customers must choose option of cards which means credit
or debit cards, last step is to get PIN number. Transaction cost in these banking cards
icon choose freely without paying any money for transaction costs, but for first time
user you will have to visit nearby ATM to activate PIN which can take upto 7 days
and after than you can freely use these cards, banking cards are available in more than
700 banks in India.

2. Micro ATMs: Micro ATM is a device that is mainly used for business
correspondents which helps to deliver basic banking services, it is used for local shops
to conduct instant transactions , this is new technique or tool in which micro platforms
31
 will be enabled by micro ATMs to connect the banks across the country. This would
help people to deposit or withdraw funds regardless of the bank which a particular
person is associated with. This device will be enabled on mobile phones so that it is
available on every business correspondents.
Basic things which are supported by micro ATMs are deposit of funds, transfer of
cash, balance enquiry and withdrawl.

3. Mobile banking: Mobile banking is service provided by banks or other financial

institutions which will allow their customers to conduct transactions with the help of
mobile phones, tablets etc. Mobile banking uses an application which is provided by
different financial institutions or given by banks to their customers for some purpose.
Every bank has its own mobile apps for example SBI has YONO app etc for different
types of platforms like Android, iOS mobile platforms.
4. Mobile wallets: It is new way to carry cash in cashless era or digital form. It is a very
good way for digital means of payment as customer can link debit or credit cards
information in their mobile device to mobile wallet applications, customers can also
transfer the money from mobile wallet. Customers will get benefits in using mobile
wallets as in place of plastic payment options they can directly pay through tablets,
smartphones etc. Customers account is needed to link to digital wallet to have money
in it. Some of the famous mobile wallets include PayTm, mobiquick, freecharge,
SBI buddy app, Jio money, ICICI Pockets etc are famous mode of mobile payment.
To get mobile wallets an application is must to be downloaded from play store in your
Android phones.

Requirements for Transaction:

 Smartphone / internet

 Use MPIN

 Self-service and/or Assisted mode

Cost of transaction
 Customer pays for remittances to bank a/c @ 0.5%-2.5% of fixed rates..

 It may pay for data charges in self-service types.

5. Point of sale: Also known as PoS is the venue or place where sales are done or
made, if we take it on the macro level point of sale may be a mall, city or markets. On
micro level retails take point of sale to be an area where customers do transactions
which is also known as point of purchase.
Conditions for service

32
 Handheld Device with card and /or bio-metric  reader

 Merchant Bank a/c

 Internet connectivity GPRS/ Landline

Activation of service
 Paper work with Bank for merchant bank a/c

 Deposit certain amount

 Collect device

 Configuration and training to operator

Required for Transaction:

 Whichever Card

Resident for bio-metric authentication (AEPS)

 assist Mode

Limit of funds transfer

 No edge for regulator

 MerchAnt’s Bank and payee Bank may set limit based on its own discretion.

6. UPI: Unified payment interface is the system which helps multiple banks account
into a single mobile apps, it helps in banking features to merge several features of
banks , payment of merchants and routing of fund all thes comes under one root,
every banks provide their own UPIApp for windows, android and iOS platforms.
Balance enquiry, history of transactions, account management , add bank account are
some of the services offerEd by UPI.

Activation of service for UPI

 Download the App for UPI

 Do register online on the App with a/c details

 Form virtual ID

 Set MPIN

33
 Required for Transaction for UPI
 Smartphone by means of internet facility

 Registered device only

 Use registered MPIN

 Self check Mode

7. AEPS: Aadhar enable payment system is payment method which permits financial
transaction at point of sale(PoS) with help of bank agents with any bank.
To gt this system customer needs provide KYC information to open new account ,
aadhar number must be linked up with bank accounts, transaction cost in AEPS is nil
but yes bank correspondents might get charged for the transactions. Cash deposit,
withdrawl of cash, aadhar to aadhar transfer of funds are some of the basic services
provided by APES. Banks decide the limit in this model, otherwise there is no such
limit set by RBI.
8. USSD: Unstructured supplementary service data is unique and innovative payment
method which works on *99# it works on this channel, USSD allows transactions of
mobile banking by the means of basic or simple feature of mobiles, one of the most
important thing is that no mobile data is required for using this service.
*99# service the main aim of this is to take the banking services to every remote
corner and person in India, services provided balance inquiry, mini statement, services
offered by every GSM providersand is available in 12 different languages which will
help to reach in regional rural areas also including Hindi and English. Rs. 0.50 is
charged to customer, to get USSD customers have to provide KYC information for
new account, link mobile no. with bank account, register for mobile banking, get
mobile PIN.
9. Internet banking: It is also knon as e-banking or online banking where it is an
electronic payment system which offers customers of the bank to do various financial
transaction with bank’s website or URL. There are different types of transactions
done online they are:
 National electronic funds transfer; National Electronic Funds Transfer is a nation-
wide payment system facilitate one-to-one funds transfer. Under this Scheme,

34
 individuals, firms and corporates can electronically transfer funds from numerous
bank branch to any individual, firm or corporate having an account with any other
bank branch in the country participate in the Scheme. Individuals, firms or corporates
sustain accounts with the bank branch can transmit finances using NEFT. Even such
individuals who do not have a bank account can also drop cash at the NEFT-enabled
branches with instructions to transfer funds using NEFT. However, such cash
allowance will be limited to a greatest of Rs.50,000/- per transaction. NEFT, thus,
facilitates originator or remitters to begin funds transfer transaction even without
having a bank account, right now, NEFT operate in hourly batches - there are twelve
settlements from 8 am to 7 pm on week days (Monday through Friday) and six
settlements from 8 am to 1 pm on Saturdays.
 Electronic clearing system: ECS is an substitute method for shipping out payment
transactions in esteem of the utility-bill-payments such as telephone bills, electricity
bills, insurance premia, card payments and loan repayments, etc., which would
prevent the need for issuing and management paper instrument and thereby help out
superior customer tune-up by banks, companies, corporations, government
departments, etc., collecting / being paid the payments.
 Immediate payment system: IMPS offers an instant, 24X7, interbank electronic fund
transfer overhaul in the course of mobile phones. IMPS is an reverberating tool to
transfer money directly within banks through customers through India through
mobile, internet and ATM which is not only safe but also economical both in financial
and non-financial perspectives.
10. Bank pre-paid cards: To transfer or transaction of money the customer need to
have smartphone or internet, use MPIN in assisted or self-service mode, on loading of
pre- paid cards customers might have to pay service charges, or fixed rates in as per
transaction cost. Enquiry of balance, acceptance and payment of money or add money
in bank accounts are some of the services provided by bank pre-paid cards. Fund
transfer limit for users is Rs. 1,00,000 and for merchants like self-declared is Rs.
50,000 per month.
So, basically these 10 are the most used modes of digital means of payment the
government has introduced in their aim to bring India under cashless category.

35
Digital Payments challenges and growth aspects

 The Indian economy continue to be heavily dependent on cash

 Digital payment systems are heavily dependent on smartphones that are

enabled with data connections, NFC, Bluetooth etc.

These continued faiths on cash persist due to certain challenges deeply rooted in the digital
payments ecosystem in India. These ingrained issues can be largely attributed to a lack of
adequate infrastructure. In the current scenario, digital payment systems are like mad reliant
on smartphones that are enable with data connections, NFC, Bluetooth etc. Out of India’s 800
Mn mobile phone users, only 200 Mn use smartphone. Of these phones, only 6 Mn are NFC-
enabled.

An even smaller percentage of users has access to QR code mechanisms. This translates to
approximately 85% Indians who do not have access to the infrastructure essential to accept
the current digital payment system that are heavily dependent on smartphones. There is a dire
need, therefore, for a more interoperable and collective process of digital payments in the
country.

 New startups for digital future:While the government and digital payment
companies push for a cashless economy, the pitfall maybe lies in the lack of a
procedure pertaining on the road to the execution of digital payment methods. While
technologies are abundant, their penetration is lagging plus while innovative startups
that can reduce the cost burden on users are present, adequate bear for their growth is
scarce.

The solutions available now are cookery to individuals who are already well versed with
cashless transactions through credit/debit cards and net banking. Innovative startups that
disrupt the not taken digital payments backdrop with payment technologies entail small cost
adoption models, will level the playing field and promote financial inclusion. There are some
inventive solutions that are currently looking to decide this technology-utility gap to make
digital payments accessible.

Self-motivated startups are leveraging advanced technologies which use other means of

communication – like sound, for instance – to help digital payments. Since all mobile phones
are skilled of producing sound, they can be used for digital 

36
CHAPTER:7 FUTURE OF CASHLESS ECONOMY

37
 Future of cashless economy

India is assumed to be the fourth largest cash user in the world, GDP rate of cash is 12.40%
in India, cash is in motion to provide the ratio by utilization of use which is 20% and in India
card transaction amount to 4% of personal expenditure of people. Most of the people in India
are not so highly educated, illiterate, poor, and also use less banking transactions to avail
internet services which is provided by respective banks. For these type of people cash is the
most common and convenient use of medium of exchange.

Transaction by cash is immediate and do not require huge formalities unlike online payments,
one also don’t need to worry about power failures, system downfall etc while using
completely cash as a medium of exchange also use of cash unlike banking cards i.e debit/
credit cards doesn’t involve extra charges so for lower income people they think that using
cash is a much better option rather than going cashless, this is big area where the government
has to work to generate awareness among the poorer sections of the society that using
cashless transaction is also good and safe while doing exchanges. If we look at the global
picture countries like France or Netherlands with more than 50% cashless, still uses cash as a
medium of transactions so it is quite clear that we cannot completely rule out cash from our
economy.

Yes, it is true that most countries are going cashless as a modern form of payment or recent
trends and also many countries have made recent progress under this, but if we look at India
lot of work is to be done in every sector before going even 50% cashless economy. Since,
India is such a vast country that we have already seen in the introduction of this report that
various incentives has been introduced by the governments for people of using cashless
payments and also introducing digital means of payment as we seen in the modes of payment
digitally, which comes under the project of the government “Digital India”.

Current position of cashless economy/ India

 When demonetization was introduced in 2016 the agricultural and industrial sector
was one which was affected the most, but now we come fast forward in 2019 things
are slowly coming back to track which was expected as people are getting used to
cashless transactions also government has also introduced schemes for agricultural
activities and the experts say that after 2020 and beyond that cashless transaction will
be used mostly in these cases and will give long term positive impacts of going
cashless.
 Since demonetization economically India suffered because let’s take it a reality this
was one of the complete failure by the central government idea of demonetization, the
main aim of the government was to make free India from corruption which didn’t
happen so this was a complete failure so economy also drop a bit but now things are
slowly changing GDP is back on track of India and is expected to be around 7.4 in
financial year 19-20 so it is a good sign and government is also making a lot of effort
to bring cashless transaction to every Indian in every corner of the country.

38
  World bank back in 2010 estimated India’s black money to be around one-fifth of the
GDP. So, in a country like India where almost transactions are done by cash it was a
historical move to transform from cash to cashless transactions. With every passing
time that means in 2019 india is doing very well in its road to become cashless
economy in its initial stages and lot of work is still to be done.
 Under the cashless transactions where many schemes and incentives introduced by the
government lots of bank accounts have also been opened, which was the ultimate aim
of the government to have evry person account which famously also had schemed
name Jan Dhan Yojana in this scheme government has also announced that amount
of 200000 will be given to the account holders as of accident insurance which has
gain fruitful results as of 2019.
 All these data has shown that India is now ready to become a cashless economy and
India can create history by becoming the first ever cashless country but there are lot of
loopholes to overcome.

The big question is society ready for transformation?

With recent data we can that India is ready for transformation and to become a cashless
economy.

 As of 30 September, 2016 80 out of 100 citizens hold smart mobile phone data
according to TRAI, the evolution of significant reduction in data and call rates,price
of the phones shows that the country is willing to shift towards a cashless one.
 The government of India is working very hard towards making India a cashless
economy with major initiatives including BHIM and many more.
 The data came after demonetization that more than 1 million people had new debit or
credit cards and bank account which gives hint of movement towards a cashless one.
 There has been many reports of more than 30% use of apps which includes digital
means of payment like PayTm has been used by people and more than 50% people
have downloaded and are using e-wallets.

The above data are clearly showing that society is now also supporting the government of
making it a cashless economy and also the smart phone revolution had made many
emergence like e-commerce, m-commerce and other services included and also the value
added services which are there such as cashback option, payback, bill payment options
has resulted a positive sign of these smart phones and also gave India a huge boost to
become cashless nation.

Future is very important in the cas and the government needs to keep up the good work
on its iniatives provided by them, but what the future holds for cashless economy in
india?

39
 Future of cashless economy

India when banned the high currency notes of Rs. 500 and 1000 then it was noted that
almost 85% of currency has been banned in circulation, this was also known as India
stack. But more than that happened it is expected that India is likely to become the first
cashless or digital society. Here, is the future and welcome to modern India.

 Start of new financial system: If we look 10 years before like till 2009 more thn
half of the Indians didn’t have any kind of identification or even they didn’t have
their own birth certificate, due to lack of these certificates people could not access
the services of banking or insurance or even they can’t get driving license. In
2009, the government launched Aadhar it became one of the most successful
schemes of the government and most successful IT project that was ever done in
India. Till 2017, almost 93% of people has digital proof of identity.
 Aadhar has taken to new dimension: In 2016, India launched another part of its
digital world known as India stack. In this, it is the series of secure and connected
system which citizens of the country can store and share their data which includes
address, bank statements and tax findings this all can be done via Aadhar too.
India stack also allowed people to open bank accounts, brokerage accounts, helps
to buy mutual funds can be done anywhere in India with a fingerprint or scan from
Aadhar. India stack could help in achieving India success of cashless economy in
future and future is very bright in this case for cashless economy.
 Cashless India is possible and the future; Let’s go back to 2016, when
demonetization was introduced back then it was termed as an isolated move by
many people , however the demonetization was an event which has forced people
to move towards cashless society or digital world. Since, when Aadhar has been
introduced almost 270 million bank accounts have been opened in India. A report
in 2015 by MasterCard has said that india was one of the least interested countries
to move towards Digital world, but see now India is the fastest growing digital
market in the world. This is the future because if digital transactions can happen in
India where many people are only rely on cash, then it can happen anywhere.
India stack is the future as the move towards digital payment it can help to achieve
that for whole world and put an end to cash system
 Investment options: A big barrier of growth in the country is been continuous
nm- performing loans in the banking system of India which is been huge rise since
2009. Demonetization has recapitalized the Indian banks more than $80 billion
has been flown into the banks after demonetization, this speaks the volume itself.
Since, the start of 2017, nifty bank index which represents the 12 biggest banks in
the nation is over 30% India is already known for its IT sector and
telecommunications area cashless economy will help them achieve more in future
and will be more beneficial for these sectors in the future.

But, the government work is not over here smooth , properly secured payment process will
help to increase the number of digital payments option sin the nation, so for this the
government needs to tighten their seat belt and work upon this area . As, India is still heavily
40
dependent on cash in rural areas as cards only 8 per cent of the consumption expenditure
personally. If we see in the developed countries more than 50 per cent people uses card as
option of payment rather than using cash.

The continuous growth of smartphones, internet and e-commerce have seen the growth rate
per year and as as a result more people are using digital modes of payment, we are expecting
this growth rate to continue and expected the rise of banking cards i.e debit and credit cards
increase every year

New market payment options like PayTm are only expected to increase as the time progresses
and is expected to reach in rural areas to every people very soon. This will also be exciting
time for payment companies and stakeholders for these companies an time by time it is
expected to increase and eventually all stakeholders and regulatory authorities will come
together to achieve the target of cashless economy.

As it is already been said by Prime Minister Narendra Modi that India is ready to taste the
new journey of world and is ready to get into the footsteps of other countries into digital
world people of India will witness new technologies with upcoming innovative ways of doing
transactions or the transfer of funds. Although, the current system of payment is more
dependent on banking cards which includes debit and credit cards it is expected to grow in
more numbers in come years and will also give major boost to the economy of the nation as
transactions without using cash will be upliftment towards cashless era.

Now, it’s the work of the government to ensure everything goes according to the plan not
only for government but is the duty of the citizens of the country to help the government in
each steps on its way to digitalization or cashless era. The schemes which had been launched
by the government is essential and vital for the public to make use of it as to increase the
innovative ideas of the government and also to help them suggest the ways of cashless
economy it’s not just the duty of the government but the duty of the citizens of the country as
well to gel with he government and ensure that everything goes according to the plan.

As, we are going or advancing to next stage it is becoming quite clear that people are also
interested in doing cashless transaction reason of doing cashless transaction is simple-it is
convenient and saves time of people rather than doing cash transactions which takes lot of
time so it is very different from cash using system and people in rural areas are also
entertaining the government efforts of digitalization as there will be less crime rates or it’s
absolutely true that atleast corruption which India is bearing from more than 70 years will be
less and less corruption means that everyone will get equal rights in all areas of the
environment be it jobs, education sector, political etc. So, definitely people will get benefits
from cashless economy but it will take time and is a long term process.

The inclusion of PayTm, Google Pay is also expected to grow in the coming years which will
be huge boost for cashless era, since demonetization the use of these apps including PayTm,
Google Pay, Phone Pe Applications nis being used widely by lot of people for doing
transactions. Infact, small shopkeepers or local hawkers immediately after demonetization

41
started using PayTm which had a huge effect on both customers and sellers as well. So, it is
expected that these payment facilities of mobile wallet will only increase from here on.

As a conclusion, it can be said that the cashless era is going to be very fruitful for people and
it will not just provide convenience to people but also will be much better while going
forward and India is ready for it but surely it will take some time.

42
CHAPTER:8 DATA ANALYSIS AND INTERPRETATION

43
 Data Analysis and Interpretation

Data analysis and interpretation is an area where we can get the complete idea of what
common man in India has a philosophy of cashless economy, so the research was done in
Navi Mumbai and sample size of research study was of 100 people.

1. Which age group you belong to?

Age group No. of

people
20-30 37
31-40 21
41-50 26
51-60 10
60+ 06

6%
10%
20-30
37%
31-40
41-50
51-60
26% 60+

21%

Figure 8.1: Pie chart showing age group of respondents.

Interpretation:

 37 % that means 37 respondents out of 100 belong to age group between 20-30
 21 % 21 respondents out of 100 respondents belong to age group between 31-40.
 26 % that means 26 respondents out of 100 respondents belong to the age group
between 41-50.
 10% respondents that means 10 people out of 100 belong to the age group between
51-60.
 6 % respondents that means 6 respondents out of 100 people are over 60 years of
age.

2. Gender

Gender No. of people

Male 64 44
Female 36
 36%

Male
Female

64%

Figure8.2: Pie chart showing gender of respondents.

Data Interpretation:

The sample size of questionnaire and research was of 100 people so the total no. of people
which has respondent are 100 and the above pie-chart makes easier to understand in a better
and easier way of the research study done, and more male category of respondents were keen
to respond rather than female in the research done, so the results of gender is given below.

 64% that means 64 respondents out of 100 are male.

 36% that means 36 respondents out of 100 are female.

3. Occupation

Occupations No. of people

Student 28

45
 Government Job 31
Private 12
Business 14
Homemaker 12
Others 03

3%

12%

28%

student
Government Job 31
14%
Private
Business
Home maker
Others

12%

31%

Figure 8.3: Pie chart showing different jobs done by respondents.

Data interpretation

 28% that means 28 respondents out of 100 are students they are still studying.
 31% that means 31 respondents out of 100 are employed in government jobs this
includes jobs in banks like State Bank of India or other government jobs.
 12% that means 12 respondents out of 100 are doing private jobs which includes
private companies.
 14% are doing business which is 14 respondents out of 100 business includes all types
self-employed, working in big organizations etc.
 12% are homemakers which means 12 respondents out of 100 are housewives whch
all are obliviously ladies.
 3% are others which means 3 out of 100 are not in these jobs mentioned above.
4. Do you support cashless economy?

Category of response No. of people

Yes 77
No 08
Maybe 15

46
 15%

8%

Yes
No
Maybe

77%

Figure 8.4: Pie chart showing respondents supporting or non-supporting cashless economy.

Data interpretation:

 77% that means 77 people out of 100 or respondents are supporting cashless economy
these respondents responded in favor of cashless economy.
 8% that means 8 out of 100 respondents are not supporting the idea of cashless
economy they find it difficult to handle digital transactions so these people are not in
favor of cashless economy.
 15% that means 15 out of 100 respondents are confused they are in maybe category so
they are confused about this idea and are not fully confident that country like India
will adopt cashless economy and they have not decided whether they are in favor or
against cashless economy.

This result shows us that majority of people are ready for cashless economy and is just a
matter of time for them to adopt .

5. If you are supporting cashless economy, why would you like to adopt cashless
transactions or cashless economy?

Categories for supporting No. of people

cashless economy
Convenience and easy to use 42
Discounts 13
Rewards for cashback 08
Easy to track your spending 15

47
 Shortage of cash 14

15%

easy to use
16% 46% discounts
cashback
easy track
cash short

9%

14%

Figure 8.5: Pie chart shows why people have supported cashless economy.

Data interpretation

 46% of the total sample size which means 42 out of 92 respondents supports cashless
economy because it is convenient and easy to use.
 14% supports because it provides discounts and coupons for using cashless
transactions.
 9% i.e, 8respondents out of 92 supports cashless economy because it pays cashback
options while doing digital means of payment options.
 16% i.e, 15 out of 92 respondents supports cashless economy as there is easy tracking
of funds.
 Remaining 15% supports cashless economy which is 14 respondents out of 92
because of shortage of cash.
6. Which mode of online payment you mostly use for payment?

Payment modes No. of people

PayTm 22
Net Banking 20
Credit/ debit cards 39
Mobile banking 11
Others 08

48
 8%

22%
11%

PayTm
net banking
credit/deb.
mobile banking
others
20%

39%

Figure 8.6: Pie chart showing most famous modes of online payment]

Data interpretation
 22% that means 22 out of 100 respondents are using PayTm as online mode of
payment out of 100.
 20% are using net banking as mode of payment up of 100 that means 20 people out of
100.
 Credit and debit cards are used by 39% that means 39 respondents are using it as a
payment option and is most famous.
 11% are using mobile banking which means 11 out of 100 respondents are using it as
a digital mode of payment.
 8% are using others which means 8 respondents out of 100 are using other means of
digital payment which includes Google Pay, PhonePe apps as a payment option.

7. How frequently you refer to online payment?

No. of times used No. of people

Once in a week 18
Twice in a week 28
Daily 31
Once in a month 23

49
 23% 18%

once inweek
twice inweek
Daily
once inmonth
28%

31%

Figure8.7: Pie chart showing frequency of use of digital modes of payment.

Data interpretation
 18% that means 18 out of 100 respondents only uses once in a week digital
modes of payment.
 28% that means 28 out of 100 respondent uses the online modes of payment
twice in a week.
 31% which is 31 out of 100 respondents uses daily to do transactions with the
help of online payment which is a good sign moving towards cashless India.
 23% that is 23 out of 100 respondents uses only once in a month these
payment which does not mean they are not interested, rather they are in the
categories of student or homemakers who doesn’t need much transactions.

8. What has been the most preferred mode of payment by you in the case of high
value transactions or exchanges?

Preferred mode of No. of people

payment
Cash 10
Credit or Debit cards 29
Net banking 31
Cheques 8
PayTm 16
Others 06

50
 6% 10%

16%
Cash
Credit/debit
net banking
29% Cheques
8%
PayTm
Others

31%

Figure 8.8: Pie chart showing preferred mode of payment in high transactions

Data interpretation

 10% are using cash which means 10 out of 100 respondents prefer cash in case of
high value transactions which is decrease in using of cash when compared to previous
years.
 29% are using credit/debit cards which is 29 out of 100 respondents are using these
cards which is the most common.
 31% are using net banking in case of high value transactions and is highest when
respondents were asked to mention their preferred mode of payment.
 8% are using cheques in the case of high value transactions which means only 8 out of
100 respondents are using cheques in case of high value transactions which is also
rare nowadays.
 16% of the respondents which mean 16 people out of 100 is using paytm.
9. Do you think India is completely ready for cashless economy?

Views No. of
people
Yes 28
No 48
Maybe 24

51
 24%
28%

Yes
No
May be

48%

Figure 8.9: Pie chart showing if respondents think india is ready for cashless economy.

Data interpretation

 28 % that means 28 out of 100 respondents think ad are very sure that India is ready
for cashless economy and will have a huge impact on many areas.
 48% which is 48 out of 100 respondents think that the country is not ready for
cashless economy.
 Rest 24% of the respondents which is 24 out of 100 respodents ate 50-50 which
means that they are not completely sure whether india is ready for complete cashless
economy.

10. According to you, what are the hurdles India is going to face in its road to
cashless economy?

Hurdles India going to face No. of people

Infrastructure 20
Poverty 15
Security issues in online 21
transactions
Digital literacy 44

52
 20%

44%

Infrastructure
poverty
15%
Security issues
Digital literacy

21%

Figure 8.10: Pie chart showing hurdles India will face in its road to cashless economy

Data Interpretation

 20% which means 20 out of 100 respondents think that infrastructure will be the main
hurdle for India to have complete cashless economy.
 15% thinks which is 15 out of respondents say that poverty will be hurdle in road to
cashless economy.
 21% say security issues will be main hurdle which includes scams, frauds etc cyber
crimes the main hurdle India will face in its road to cashless economy.
 Remaining 44 % say that digital literacy is the main hurdle country will face which is
44 out of 100 respondents as many don’t understand how to use digital payment
methods so government needs to work upon digital literacy.

11. What is the best way to achieve cashless economy?

Ways to achieve cashless No. of people

economy
Improve infrastructure 44
Proper internet connection 11
Free WiFi at public places 09
Promotion of digital means 36
like PayTm

53
 36%

44% infrastructure
internet facility
free WiFi public places
Promotion of digital means
PayTm

9%

11%

Figure 8.10: Pie chart showing ways to achieve cashless economy.

Data interpretation

 44% which means 44 respondents out of 100 had to say about infrastructure to
improve infrastructure.
 11% which is 11 out of 100 respondents had to say to improve the speed, network
range and internet facility.
 9% which is 9 out of 100 respondents had a say to have free WiFi at all public places
which will help people to transfer the data without having their own mobile data.
 36% of people which means that 36 out of 100 respondents think that promotion of
digital modes of payment will be a better option to achieve cashless economy as it
may put an end to cash transactions methods.

12. A cashless economy could eliminate the need of bringing cash with you in
many areas including college, your offices, going to malls etc will that be
good for you?

Opinions No. of people

Yes 60
No 10
Maybe 30

54
 30%

Yes
No
Maybe
60%

10%

Figure 8.12: Pie chart showing opinions of people if they are not able to use cash in their
work areas.

Data interpretation

 60% of people or respondents which means out of 100 respondents 60 are

comfortable with non-availability of cash and they are comfortable with cashless
economy.
 10% of the respondents which means that 10 out of 100 respondents are not
comfortable with non-availability of cash in their work areas and may not appreciate
this move.
 Rest 30% which means that 30 respondents out of 100 are not so much in against the
move if they are in a situation when cash will not be available to them then they can
be fine with that move but they are not in complete favor of non-availability of cash.

13. Do you feel safe while using digital means of payment?

Opinions No. of
people
Yes 62
No 21
Maybe 17

55
 17%

Yes
No
21% maybe

62%

Figure 8.13: Pie chart showing percentage of respondents feeling safe while using digital
means of payment

Data interpretation

 62% which means that 62 out of 100 respondents feel safe when they use digital
means of payment which includes banking cards that is debit and credit cards, UPI etc
or PayTm.
 21% of the respondents don’t feel safe when they use digital means of payment they
aren’t secure when they use these sites or applications for payment of bills, money
etc.
 17% of the respondents which are 17 respondents out of 100 are neither very
comfortable and secure or safe while using digital means of payment nor they are
afraid of being looted via cyber crime yeah, but these are people who wants more
work to be done on the payment method of digital means.

14. How often do you change device passwords, PIN of debit or credit cards?

No. of times changed No. of

options people
Once in six months 22
Once in a year 21
Every Month 31
Never 26

56
 22%
26%

once in six months

once in year
Every month
Never

21%

31%

Figure 8.14: Pie chart showing the percentage of the passwords, PIN changed by
respondents.

Data interpretation

 The pie chart shows that 22% respondents that means 22 out of 100 respondents
change their PIN, or passwords of their debit/ credit cards every six months.
 21% of the respondents which is 21 out of 100 respondents change their passwords or
PIN once in a year.
 31% of the respondents which means that 31 out of 100 respondents change their
passwords or PIN in every moth because they are more secured.
 26% or 26 out of 100 respondents never change their passwords this is one fault that
even if there is 1 % chance that your account is getting hacked you should
immediately change the passwords these 26 respondents were very carelessly talking
about their accounts as if they have no care of money or whatever happens to the
account.
15. Do you store your card details on your tablets, laptops or mobile?

Opinions No. of people

Yes 26
No 74

57
 26%

Yes
No

74%

.Figure 8.15: pie chart showing the percentage of respondents who save their card
details on laptops, mobile and tablets.

Data interpretation

 26% of the respondents that is 26 of the total out of 100 respondents save their card
details on the laptops, mobile or tablets but in my opinion this is the new way of
creating trouble for yourself as some times some fake websites could read and spread
the details crimes or online frauds.
 Remaining 74% that is 74 out of 100 respondents have never shared or save the
details of their card on any of the platforms like tablets, mobile or laptops these 74 out
of 100 can be said as smart people as they are not sharing their card details or saving
them to their desktops.

16. Do you think that the government should do more to promote cashless
payment?

Opinions No. of people

Yes 78
No 06
Maybe 16

58
 16%

6%

Yes
No
Maybe

78%

Figure 8.16: pie chart showing the percentage of respondents opinion if government
should promote more cashless payment

Data interpretation

 78% of the total respondents which means that 78 out of 100 respondents which is
majority of people think that the government should promote more cashless payment
options which will boost the vision of the government to bring the country under
cashless economy, so majority of the respondents had to say that the government
should promote more cashless payment system.
 6% that is only 6 out of 100 respondents had to say that there is no need of promotion
as the existing [payment system are only out of control and government is wasting its
time in investing these rather should create job opportunities, these are opinion of
those who has not supported cashless economy.
 16% of respondents are not totally sure what is to be done, they think that government
should first work on existing modes of payment system.

17. Do you think that to reduce the notes will have positive impact on society and
decrease crime rates?

Opinions No. of people

Yes 39
No 17
Positive impact on society, 37
but will not reduce crime
Reduce crime, but will not 07
have any positive impact on
society

59
 7%

39%
Yes
No
Positive impact on society, but
37% will not reduce crime
Reduce crime, but will not have
any positive impact on society

17%

Figure 8.17: pie chart showing the percentage of respondents opinion on the impact on
society provided by cashless economy

Data interpretation

 39% i.e, 39 out of 100 respondents think cashless economy will have both good
impact on society and reduce crime rates.
 17% i.e, 17 respondents out of 100 has to say that nothing will happen when cashless
economy will be implemented.
 37% i.e 37 respondents had to say that there will be positive impact non society of
cashless economy, but will not reduce crime.
 Remaining 7% i.e, 7 out of 100 say that it will reduce crime, but no positive impact.
18. Countries with lesser population and high literacy rates also are not
completely cashless, so do you think India can become completely cashless?

Opinions No. of
people
Yes 22
No 45
Maybe 33

60
 22%
33%

Yes
No
Maybe

45%

Figure 8.18: Pie chart showing the percentage of respondents whether India can become
cashless when other developed and high literacy countries are not completely cashless.

Data interpretation

 22% of the total respondents say that yes India can become completely cashless and
can have a good future in cashless era.
 45% of the total respondents had to say which means that 45 out of 100 respondents
said that India cannot become completely cashless as more advanced countries than
india are not completely cashless.
 33% of the people which means that 33 out of 100 respondents had to say that it is
possible that India can become cashless and create history to become the first
complete cashless country of the world. However, these maybe category of
respondents are just hopeful.

61
CHAPTER:9 CONCLUSION

62
 Conclusion

The research study titled”Study on Cashless Economy and its impact on society with
reference to Navi Mumbai” is all about the report of a study on cashless economy and also
it’s impact on society and various sectors of nation. This study helped us in finding what is
cashless econom, we also came up to know the various initiatives provided by the central
government to the people to use more and more cashless transactions to boost the vision of
Prime Minister Narendra Modi of becoming India a cashless nation.

We came up to know about the challenges and prospects which lies ahead of the nation to
become a cashless nation, there are more opportunities and obliviously India can become a
cashless country and create history by doing it so, but for that there are various challenges
that lies ahead for us .

We also came up to know about the different types of digital payment methods for cashless or
online transactions the government has provided for safe and secure transactions the different
and new initiatives of online payment by government like BHIM, UPI etc, what is the future
of cashless economy in the nation is quite safe and secure and the country is moving towards
a better tomorrow where cashless is the future and india is moving towards it.

In the data analysis where total sample size was 100 in the area of Navi Mumabi research was
done on the payment methods, whether public supports cashless transactions, they want to
have cashless transactions and guess what the results were positive and research says that
everyone almost wants to live in cashless era.

63
CHAPTER:10FINDINGS OF THE STUDY

64
 Findings of the study

In this research study we have came to know many new things about the cashless India
project or the future cashless economy era in nation. We came up to know about the various
initiatives provided by the government for the cashless payment system, how many people
are interested in cashless economy etc.

Here, are some of the list of major findings of research study:

 Government has introduced many schemes since demonetization and are encouraging
people to use cashless economy. In survey also with reference to Navi Mumbai area
we came to know that many people are in favor of cashless economy and are
supporting cashless transactions/economy.
 Public are willing to adopt cashless transactions as in survey we found that many
people find it easy and convenient to use the cashless transactions, but there are some
who are still not convenced and only use cashless transaction due to shortage of cash,
so this is the area where government needs to work and should promote cashless era
where all are supporting it.
 In this research study we found that banking cards i.e, debit and credit cards are most
used online payment modes in digital transactions as we have seen the different types
of digital means of payment in which debit and credit cards are mostly used and after
demonetization, more than 2 million accounts have been opened in India. Also,
PayTm was a source of transaction after demonetization as the most used mobile
wallers by local vendors, shopkeepers etc.
 We also came to see that many people are still dependent on cash as a medium of
exchange as many people still uses cash as exchange medium value in case of high
transactions. Although, this mainly happens in the rural area where the digital
transactions are yet not up to the standards. So, in these areas people still refer cash as
a medium of exchange so government still needs to work a lot in these areas.
 We have seen that what is the future of cashless economy be like that wise many
people didn’t agree that India is completely ready for cashless economy as many thing
need to be done this is true in some sense but we have also seen what is the scope of
cashless economy in future , economy and GDP of India will have a very good impact
as now GDP is expected to grow 7.9 in the Financial year 19-20.
 Challenges are very big and large to overcome for India to achieve the ultimate aim of
cashless economy for this we came to know the major challenges like to improve or
reduce cyber crimes, improve infrastructure, internet facility to whole nation 24*7
which is a distant dream now it looks like but in the survey which was conducted
many people who supported cashless economy had to say is digital illiteracy is the
major cause of worry and government should do more than infrastructure to digital
illiteracy to promote it and have a good impact on rural sections or areas of the
country which will boost cashless economy.
 Many people as in the survey which we came up with we found that many people
will feel good while not having cash at their work areas which is Colleges, offices etc.

65
 but many of them are dependent on cash so they think that using cash is the best way
to act as medium of exchange.
 We have came to know about the online scams, frauds, cyber crimes in detail in this
research study as so we found in survey that there are many people who don’t feel
safe while using digital means of payment as they are scared of frauds or cyber crimes
to reduce this fear in the mind of users government need to take some extreme steps
but also users should also be very careful while using the digital modes of payment.
 The result of cyber crimes are so high in India is very simple as in the survey we
came to know that many people store their card details or many secret things on
mobile, laptops etc. This is the reason as many cyber crimes are taking place in the
country there’s a suggestion that people should never ever store their card details on
their laptops, tablets etc as there is huge possibility of frauds or scams.
 We had a survey on whether reduce of notes will have a positive impact on society
and will reduce the crime rates or reduce crime rates, but will not have any positive
impact on society or whether both positive impact and crime reduction will take place
or neither positive impact nor reduce of crime rates will be there we had a very
interesting response from respondents where majority of them had to say that there
will be positive impact on society, but will not reduce the crime rates, but who didn’t
supported the idea of cashless economy had to say that neither there will be any
positive impact nor reduction of crime rates in the country. Some said that yes there is
a chance of both, what we came up with this question is that it is 100% sure that
people are expecting something out of this cashless idea, whereas some exceptions are
in every cases.
 At last there is a big find about the possibility if India can become completely
cashless as many other well systematic countries with less populations are still not
completely cashless, so we found that many people are supporting it, but some experts
are completely ruling it out as it in never possible to become completely cashless and
rest are in doubt over the shadow of what the future holds.

66
CHAPTER:11 SUGGESTIONS

67
 Suggestions

Every work which is being done has some of the suggestions to uplift the work or to do a a
much better work next time or further. Every research study has some suggestions, findings,
limitations etc which is very common in the research study.

Here, are some of the suggestions or recommendations to Indian government for the
betterment or upliftment of cashless economy:

 The central government first of all to provide cashless economy, needs to built a
proper infrastructure have proper facilities and most of all government should send
their volunteers in every corner of the country to provide digital literacy.
 To have a huge impact of cashless India or economy is a suggestion to the
government that to have a open problem solving session in every area to have a
proper problem solving sessions to have a huge impact of cashless economy on the
nation.
 To use digital payment as a payment option to remove cash from the society, there is
a proper need of backup options as there is need to have a proper IT infrastructure,
good smart moves will make the difference and there should be no frauds, scams
these all should be removed and for this to happen we need to have a really very good
IT infrastructure.
 The central government is having a long term strategy for cashless and digital India,
but what we now expect from the central government is that there is a proper need of
plan there should not be the case of demonetization where the government announced
its decision without having any proper backups and plans.
 Central government needs to have more and more promotions of cashless schemes
and they should not stop here by having one step towards the promotion of cashless
economy rather there should be continuos promotion of digital means of payment to
sack cash from the society.
 Central government needs to have a proper plan how to reduce the crime rates also as
if there will be no cash in the society, then the dacoits will automatically will not have
any money for them to do crimes, so in order to make India a peaceful country there is
a proper plan that how being cashless can also reduce crime rates at least what we see
during the election times or what we are seeing in Kashmir.
 The central government also needs to aim that before having digital transactions in
rural area proper facilities, training of how to do transactions should be provided to
rural or poorer sections of the nation to use digital transactions.
 This is suggestion for every person living in this country that to make India a digital
country or cashless should not be the only dream or objective of the government but
also common people should also make all their efforts to have a cashless economy as
it will benefit the nation in long run.

 More bank accounts should be opened as much as possible, as more bank accounts
will lead to more cashless transaction via banking cards or mobile wallets so the

68
 government should promote every person to open their bank accounts and more
schemes like Jan Dhan Yojana should be opened.

 The government should create tax rates on ATM withdrawls which will restrict people
of withdrawing cash from ATMs.

 This should be the primary aim of the government to make electronic payment
completely safe and secure so that people could trust electronic payment
infrastructure.

 RBI will also have to play a big role in making the nation cashless economy as they
have to make sure that what digital payments from across the border will mean for
RBI’s capital control and how the new types of payment will affect their monetary
variables.

It is expected that huge country like India will take time to reach towards a digital/cashless
economy/ India but what we know that even in the next 10 years India achieves 90% of
cashless transactions that will be a great achievement overall.

69
 12.Annexure

12.1 Questionnaire

1. Name:
2. Age
o 20-30
o 31-40
o 41-50
o 51-60
o 60+
3. Gender
o Male
o Female
4. Occupation
o Student
o Government job
o Private job
o Homemaker
o others
5. Do you support cashless economy?
o Yes
o No
o Can’t say
6. If yes, why would you like to adopt he cashless transactions or system?
o Convenience
o Discounts
o Rewards for cashback
o Easy to track your spending
o Shortage of cash
7. Which mode do you mostly use for online transactions?
o PayTm
o Net Banking
Credit/ debit cards
o Mobile Banking
o Others
8. How frequently do you refer online payment?
o Once a week
o Twice a week

70
 o Once in a month
9. What has been the most preferred mode of payment by you in the case of high-
value transactions?
o Cash
o Credit/debit cards
o Net banking
o PayTm
o Cheque

10. Do you think India is completely ready for cashless economy?

o Yes
o No
o Can’t say
11. According to you, what are hurdles India will face in its road to Cashless
economy?
o Poverty
o Security issues
o infrastructure
o Digital literacy problems
o Others
12. According to you, what is the best way to have cashless economy in India ?
o Internet connection in rural areas
o Free WiFi at public places
o Improve internet connection
o Improve infrastructure
o Promotion of digital means like Paytm, net banking etc.
o Others

A cashless system could eliminate the need to bring cash to your work areas like
offices, colleges will that be good for you?
o Yes
o No
14. Do you feel safe while using digital means of payment?
o Yes
No
15. Do you think that the government should do more to setup the cashless
payment infrastructure?
o Yes
o No
Maybe

71
 16. Do you think that to reduce the use of notes will reduce crime and have a
positive impact on society?
o Yes
o No
o Positive impact on society, but will not reduce crime
o Reduce crime, but will not have positive impact on society
17. Countries with lesser population also and high literacy rates are also not
completely cashless, do you think India despite such challenges will become
cashless?
o Yes
o No
o Can’t say

12.2 Bibliography
1. Woodford (2002); A report on cashless economy and future impacts of cashless
transactions in India.
2. Roth (2010) A study and review on various sections of the society of cashless
economy.
3. L. Dawson ( 2016) A report on the cashless era: Areas which needs to work
upon”.
4. Team (2016) A study on demonetization and how India is shaping up for the
future of cashless era.
5. Subhani (2011) A study on plastic money via debit/credit cards and how India is
doing under these cards.
6. Bharath (2018) A study on the review of cashless economy: advantages, impacts
limitations of cashless economy.
7. Midha (2018) Digital India : Aims, difficulties and challenges.
8. https://www.researchgate.net impact on cashless economy on banking sector,
economy, growth of GDP and agricultural sector.
9. Cashlessindia.gov.in
10. Businesstoday.in future of cashless economy.

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a major change in Indian economy on 8th November, 2016 that was to ban the
complete use of high exchange note of Rupee 500 and 1000 which is popularly
known as demonetization. Demonetization lead the way of something new on Indian
economy the population of 1.2

billion country is moving towards a cashless future is it really possible to convert such
a huge country into cashless we will find it later in this report. 1.1What is cashless
economy? A cashless economy is one in which all the dealings are done through
electronic means such as debit or credit cards, Immediate Payment Service, National
Electronic Funds Transfer etc.

The circulation of physical currency in cashless economy will be minimum, the Indian
economy currently continues to be driven through 5% of all payments that happen
electronically, the more and more use of electronic means of transfer of funds, or
other things carries out to be India’s development and modernization of India’s
payment system.

The essence of system is to shift the economy from cash based economy to cashless
one, the main aim of going towards a cashless economy is to get rid of corruption, or
to make country more advance where the world is going in many countries cashless
transaction is common it is said that Belgium is the most cashless country or
economic in the world with 94% using cashless transactions.

The policy also aims at improving the effectiveness of monetary policy, managing
inflation in the economy, maintaining stable prices The Government is working on
various levels to reduce the dependence of cash Prime Minister Narendra Modi
introduced various schemes for both the customers and for traders to promote
mobile banking and e-payments. To support cashless economy it’s important for the

73
Government to make the habit of people of using the modes of e-payments.

Government encourages transactions like mobile banking, Ru-pay cards, UPI, USSD
these are the means of digital payments Government has also introduced the aadhar
based cash payment system this is mainly for those who don’t have cards or mobile
phones. Reducing cash dependence is of many reasons one of the main reason is to
curb black money, illegal transfers can’t be made without paper notes, curbs illegal
activities all together, also it reduces terrorist activities in many parts of the country.

There are various schemes that the government has introduced and the incentives
done by the Government to increase the use of cashless transactions and boost the
cashless economy in India. 1.2 Problems with Current Indian Economy The current
Indian economy is quite fragile and unstable. A lot of black money is in India, as
already said that the main idea is to bring cashless is to get rid of all the black money
which is being used in many ways to bring better stability in addition to reputation to
Indian market and economy.

Improper taxation that is the reason GST was introduced in Indian economy as there
will be only one tax under the country. Deteriorating infrastructure is also a problem
in current economy in business, healthcare and infrastructure there has been many
reports of power failure in major cities of the nation which includes the capital of
India New Delhi, Bengaluru, Kolkata etc.

With Government moving towards a future of cashless economy, it will be interesting

to see how the Government improves all these sectors of Indian economy, it is a
major challenge to overcome but not difficult. Education sector is also a major cause
of worry as this sector is backward with 72% literacy rate, with the introduction of
cashless transactions it is important for all states to have a proper literacy rates.

Government Initiatives to encourage cashless economy All cash counters which are
there in the Government offices should put up BHIM-UPI QR codes for accepting
digital payments which will boost the digitalization and minimize the use of cash in
Government offices. Cash counters can send an indent to customers phone to enable
payment through UPI.

UPI is one-touch transaction which is used for transaction of money between the
parties through a ‘unique virtual address’, since its launch UPI is adapted by various
banks fintech companies. The BHIM (The Bharat interface for money)is an extension
of UPI it is a technology which was launched in December 2016, one month after
demonetization Cash counters at the Government offices are major sources of
payment , by use or putting of QR codes requires face screening of the customer as
well as user, the idea is to minimize the use of cash and use digital payments to
boost the cashless transactions and economy.

74
POS machines in villages expansion of the digital payment in rural or village areas,
the Government through NABARD extended financial support to enable 2 POS
devices each in more than 1 lakh villages with the criteria of population of less than
10,000. These POS were deployed at cooperative societies, milk societies etc. This
benefited the farmers of more than one lakh village covering more than 75 crore
population who will benefit to transact cashlessly in their villages.

Rupay Kisan Cards for farmers the Government also introduced the scheme for
farmers through NABARD which supported Rural Regional Banks and Cooperative
banks to issue “Rupay Kisan Cards” to more than 5 crore Kisan Credit card holders to
enable them the facility of cashless transactions at POS machines or Micro ATMs.
Government announced discount of 5 per cent for paid services for railways
passengers which included was catering, accommodation, retiring rooms etc if these
all accommodation was booked by digital means, all the passengers travelling
through railways availing these services got benefitted.

Government gave discount on the policies which were sold online which meant that
public sector insurance companies provided incentives, by the way of discount or
credit upto 10 per cent of the minimum in general insurance policies and 8 per cent
policies in new life policies of life insurance corporation customers availed benefit
through the use of online policies which sold through customer portals, and the
payment was made by digital means.

Government cancelled out the transaction fee on digital payments to use of digital
means and boost the cashless economy of the nation. Government ensured that that
there is no transaction fees for consumers and all expenses should be borne by
Government offices or departments. There is no service tax on digital transactions for
transaction upto RS. 2000.

Railways passengers which bought the tickets online, Government gave them free
accidental insurance cover upto Rs. 10 lakh. It is now common that many passengers
are buying online tickets for railway journeys, almost 65% of them are buying online
tickets. Government gave 0.75% discount on government fuel if the price reduced or
increase customers paying through digital means will get that discount, although
many customers are still buying fuel by using cash system, this is area where
Government needs to bring more iniatives Getting more vehicles to adopt FASTag.

Push to National common mobility card in metros to cover common transport and
schemes to entertain the customers, continual digital evolution is the key to success
for cashless economy. 1.4 Challenges of cashless economy Government’s decision of
demonetization drive is supposed to benefit the country, but there are certain
challenges that needs to be dealt properly if the nation has to see a change in the

75
economy of the country, some of the challenges of cashless economy are as follows:
Digital literacy: Only the high class or elite class people has a good knowledge of the
digital means like how to use, when to use, implications etc,half of the country do
not know how to use computer, so digital literacy improvement is major challenge
before going to cashless economy.

Improvement of infrastructure: Government needs to improve the infrastructure in

many areas which includes in public and private sector both, which includes 24*7
internet, free WiFi everywhere, proper electricity in rural areas as well as urban areas.
Without, proper infrastructure it is difficult to get digital transactions and going with
cashless as what will happen if in the middle of transaction there is power failure or
of the digital means are not working.

Security: Security is the matter of concern in cashless transactions, as there are lot of
cyber attacks in India, so the government needs to adapt proper security for cashless
transactions, especially in the banking sector. Resilience: This is a big issue, if a
country does not have a cash payment option then what to do if the cash supporting
system will be unavailable if the connectivity fails then there is a risk of whole system
shut down without a proper backup options. 1.5

Prospects of cashless economy The JAM infrastructure is reaching every remote

corners of the country or to every citizen of the country to help going cashless
transactions, almost more than 24 JDY jan dhan yojana accounts a government
scheme,127 Aadhar identity cards, 90 million mobile phone users are in India so JAM
infrastructure can be used to promote cashless transactions. Number of credit and
debit cards holders are to be increased to 25.5

million and almost 654 million respectively, demonetization drive has forced people
to learn online transactions. More people have started using RuPay debit cards and
Aadhar for digital transactions, this will help to facilitate a less cash economy. With
increase of mobile banking applications, various applications of different banks the
use of these applications are growing and is expected to minimize the use of cash. A
large number of

76
 OBJECTIVES OF STUDY RESEARCH OBJECTIVES To study about cashless economy To
study the impact of cashless economy on society of Navi Mumbai. To study the
challenges and prospects of cashless economy. To make awareness to people about
various cashless schemes introduced by the Government of India.

To study about the digital modes of payment which India is going to adopt. 2.1
Advantages of cashless economy As the country moves towards cashless
environment after demonetization, the government came up with various schemes
but will it be able to influence people in the long run only time will tell.

But, to clear public doubts about cashless economy what it holds in future, here are
some of the advantages of cashless economy. Saves time and money: Government
and companies will get efficient and they can reduce costs if they are no longer
required of manual accounting work to be done. The costs which are related to
accounting and handling of cash is very high, so cashless transactions can help to
save both time and money.

Taxation: Taxation will help in economy growth of the country as with less amount of
cash at home and more in bank will have no scope for hiding income and evading
taxation and where there is more tax payers, the country will get benefit as there will
be less rate of taxation. Reduce illegal activities: When people will be cashless, there
will be less chance of getting involved in theft, crimes there will be no option for
indulging cash into illegal activities, crubbing illegal activities is one of the major
reasons to go cashless.

Leads to transparency and accountability: With cashless, it will be lot easier to track
the flow of amount of money with every transaction which the users are doing to
track them, this will make the system more system and compliant. This will benefit in
the long run as it will have a positive impact on business and economy as a whole.

Safety to people: Cashless can bring safety to people as there will be less chance of
robbery and people can feel safe when they are doing transactions, also people don’t
need to carry bundle of paper-notes as well along with them as only having a pack of
cards will be sufficient for them to carry out the transactions or required amount.

Easier to track black money: This is one of the most important take for cashless
economy of the Government as to stop black money and corruption going cashless
is very much needed, while going cashless it will be easier to track black money and
illegal transactions as all the records of the transaction will be transparent to the
banks which have been recorded for the transactions done by an individual which
will lead to fall in corruption level of the country. 2.2

Scope of study Cashless transactions are one of the fastest growing things in the

77
world today so in order to match with today’s world the government of India
announced demonetization as a result in which people were banned the complete
use of Rs. 500 and 1000 high currency notes, this also resulted in digital transactions
as government made the first move towards cashless economy.

This study will also know to find out what is the scope of cashless economy in today’s
world also related to India. When demonetization was announced then the whole
nation was taken aback as the use and dependce of notes was high for people and
the people were tensed as what to do now as notes have banned from using,
however amid all these tensions one sector was there who was gaining huge profits
this was mobile wallets sector companies like PayTm mostly came into limelight after
demonetization and many street vendors, hawkers and small income people started
to use PayTm as a transaction medium.

It is expected that mobile wallets has a great scope and is expected that by 2020,
more than 80% people even in rural areas will also start using digital transactions
with the help of mobile wallets. Scope of study on cashless economy are: The main
and overall scope is to make all Indians aware of the benefits of cashless transactions
and also the ways of doing transactions digitally which will help India become a
cashless economy.

To make change there will be need of lot of efforts from public and the government
which we see as a cashless economy in near future which will lot depend on digital
India programme as well. On being transformative which means that to realize
tomorrow’s India which is cashless transactions and lot of work to be done in IT
sector and for that many jobs will be given to the youths to make India cashless.

We can get to know that the government will introduce many more schemes to
argue people to use cashless transactions as it will curb black money in future and
will also have great impact on Indian economy. The cashless India/economy puts
together a large number of ideas, thoughts process which will come together into a
single, compressive ways so that the ultimate aim of cashless economy can be
achieved in long run.

Many job opportunities will be created as Digital and cashless India project are
coordinating each other so in order to get the target there will be many jobs in IT
sector up for grabs in future. According to economic times, a English newspaper
cashless/digital India will help the nation to increase GDP by 20-30% by year 2026.

78
 LITERATURE REVIEW Cashless economy is not the complete absence of cash, it is an
economy setting in which goods and services are to be brought and paid through
electronic media. Woodford(2002), Cashless economy is as one in which it is
assumed to have no transaction frictions that can be diminish through the use of
money balances that accordingly provide a reason for holding such balances even
when they rate of return. According to 2015 report, India’s unbanked population was
233 million.

Even for people with access to banks, the capability to use their debit or credit card is
imperfect because wallet users had provided the no. of mobile banking users and 3
times the no. of credit card users. Roth(2010), realistic that developed countries of
the world, to large extent are moving away from paper payment instruments towards
electronic ones, especially payment cards, some aspects of the execution of cashless
economy are improved by e-finance, e-money and e- exchanges.

According to another report in 2017 after demonetization, there was report that
Indian economy is cash based, so much that MNCs like Amazon had to incorporate
cash on delivery just to tap into the Indian market. L Dawson(2016), in his report on
the critic of the Government, ample arrangements should be made in all parts of the
country, especially the Government should send their volunteers in the rural areas of
the country to talk with low income people that how the cashless economy of the
country will work, also adequate safety measures to guard online transactions against
fraud which is very common in India.

The critics further argued that due to unavailability of cash many people died and
lost their jobs, so it’s the responsibility of the Government to ensure that everything
goes according to a well-planned system, as in country like India it is tough to deal
with proper electricity in some areas of the nation, 24*7 internet etc. Former RBI
Governor Raghuram Rajan said that, “post –demonetization, e-transactions volumes
reverted back to earlier trends.”

He also added that rise of digital transactions is a blip which is hard to understand
because in such a vast country like India you need to have proper vision to have
cashless transactions. (Team, 2016), paper clarifies the impact of Demonetization on
the accessibility of credit, spending, level of activity and government finances.

The impact of the shock in the medium term is a function of how much of the
currency will be replaced at the end of the replacement process and the scope to
which currency in circulation is extinguished. Santomero (1996) analyzed the various
choice forms of money such as prepaid cards, cash cards electronic purse, smart
cards etc and their demand for medium of exchange with the help of Baumol-Tobin
Model

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It was found that range of use of asset decreases with the fall in household income,
usage patterns of medium of exchange differ with the same income but different
allocation of income among consumption of goods and households tend to use the
higher interest medium of exchange to buy the good that constitutes the largest
amount of its income etc. P Manivannan (2013) in his research paper "Plastic money
means less payment and the use of more card payment system.

It was then, when in his review of cashless economy he choose that this economy will
be more beneficial in the long run for the country or every state, but it will take more
time to reach out to people in rural areas rather than urban areas, as in rural aeras
people will find it difficult to understand the basic needs of the country, or the
necessary items which might be used for the cashless economy and for digital
transaction.

However, today, with the development of banking industry, fixed income group also
begins the use of plastic and electronic money payment systems and especially credit
cards. (Subhani 2011) conduct a study on the "plastic money / credit cards for kudos
between now and then." The study was based on information of the magnetism of
plastic and its impact on the choice for the use of money.

The research found that the preference for the use of plastic money / credit card has
several pros and cons although it is easy to use and affordable. According to the
consumer behavior it is stated that plastic money is a form of inspiration for a
consumer to spend. The study suggest that the preference to use plastic money to
have a positive relationship with the easiness of use because the principle of a credit
card has been linked to usage with psychosomatic phenomena that people lean to
spend less with a credit card and spend more with the same amount of cash in hand.

She also had a say on the multiple usage of both the cards as well as cash which has
been used by many people in different ways but also had a good number of card
used in earlier days as India was always ready for a cashless country, but for that like
all others Shubhani also said in her review that it will take along time for a country of
1.2 billion people to become cashless country.

Manyul (2016) in his article mentions various of the benefits of cashless transactions
to nations like increased GDP by using cards and reduced social cost, increased in
financial inclusion due to acceptance of e-payments, reduce the shadow economy,
reduced in cash payment enables e-commerce growth and facilitated trusted
transactions online. He says that at 1.7% of GDP, India incurs a much higher cost of
cash compared with most developed economies.

Every changing digital world had a huge impact on Human resource. It had created
an impacts on their jobs and their workplaces. He mentions five challenges that the

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human resource has to in the present as well as in the future. The five challenges are-
(i) figure out when processes should be automated, versus when a human face or
voice is the best route, (ii) healthier communicators in order to efficiently leverage
the digital space, (iii) simplify the data and provide a clear picture of their up to date
workforce as the data are spotted among various systems and acquired in varied
formats, (iv) fear from the legal department of using social media and (v) HR has to
estimate what function can be automatic and provide beloved level of services.

He, basically had to say about the main challenges and impacts and advantages
which the country is going to face in growing upto cashless economy, he also clearly
stated that how the country’s GDP is going to increase or decrease that is not the
matter, but the fact is to make India a cashless country that is really big chance and
challenge as well, also after demonetization the country has already seen so much
changes in the nation’s economy so now after 2-3 years that the country will settle
down and after that the government should see as making India as acashless nation
by introducing diverse schemes.

Bharath (2018) in his review he mainly said about the future prospects of being
cashless advantages, limitations and the use of digital transactions in the country like
how much it is ubeen used, what to use and how many types of digital transaction
can take place , Bharath also mentioned the challenges like the digital inadequancy
of people, inability to use the modern technologies in many parts of India and much
more, he also come up with the report that almost half of the people till the start of
21st century didn’t know how to use the computer, so it is going to be difficult for
the country to adapt soon the upcoming technologies and standards of using digital
transactions.

So far, the government has done a good job by making up a very good run of
schemes like giving discounts on many items like-railways tickets, petrol and diesel
etc. But, now the job of government has just begun in his article he had mentioned
that how the illiterate people just use cash in order to get some resources fulfilled.
The BPL(Below Poverty line) people also are living in the nation so for them it is very
difficult to get digital transactions as they will find difficult to use mobile and ATM
cards, so for these type of people Government has opened various schemes and
various accounts for these people.

To make country like India a cashless one it is a big question mark and it is almost
impossible to make such a huge country cashless. Srinivas, N. (2006) in his study ?An
examination of the default in credit card payments?, has tried to analyse the socio-
economic profile of the defaulters of credit cards, to identify the set of factors which
contributed to such defaults and suggest relevant measures to minimize the default
cases.

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Analysis of reasons indicated that economic adversity is the major reason
acknowledged by majority of the sample units follows by strict payment structure
and loss of job/business. The main proposal is that the banks concerned ought to
redesign the payment structure of credit card defaulters in a flexible and affordable
installment. (Shendge & Shelar, 2017) paying attention on impact and importance of
cashless policy in India.

According to Government of India the cashless policy will increase employment,

reduce cash related robbery thereby reducing risk of carrying cash. Cashless policy
will also reduce cash related corruption and be a focus for more foreign investors to
the country, leads to modernization of payment system, fall in the cost of banking
service, diminution in high security and safety risk and also hold back banking related
corruption.

The financial shelter over the digital payment channel is important for pushing the
cashless economy idea. The retail sector still has large number of cash transaction
and payment through cash is yet to pick up and card is the one of the most secure,
convenient mode of cashless payment in retail market. Digital transactions are
traceable, therefore easily taxable, leaving no room for the circulation of black
money.

The whole country is undergoing the process of reconstruction in money

communication, with e-payment services gaining first-time momentum. With the
speed on which the Government is getting with cashless economy, it is time for India
to fasten seat belts and be ready to live with cashless transactions and be used to get
up with digital transactions, government has ensured many services to people and is
ensuring that people don’t face difficulties while doing digital transactions that is
going to be more important, they also mentioned about the speed upon which the
current government is working to make india cashless country after demonetization
there is more chance that government will put more iniatives like these to boost up
digital economy and digital transactions of the nation.

Devlin (2007) “An Analysis of main and subsidiary credit card asset and spending.”
This study seek to scrutinize why most various credit cardholders have a “main” card
(i.e. a card used more often than others) and “subsidiary” cards (i.e. cards used less
often or only in an emergency) and the spending pattern connected with main and
subsidiary cards.

This study is a qualitative in nature, using a survey which contained open-ended

questions to acquire data. Response were subject to content analysis to categories
the reasons given for having a main and subsidiary card. Results show that 85 per
cent of the 141 respondents indicated that they had a main card and the most
commonly quoted reason for having such a card was the superior discount and

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promotions which were presented by the card issuer.

Not surprisingly, main cards were used for the broadest range of transactions while
subsidiary cards were used for a more restricted range of transactions, a majority
saying that their subsidiary cards were held for “stand by purpose”. The results
suggests that managers who market credit cards should aim to ensure that, in all
times, the discount they offer, the promotions they put together and their
trustworthiness schemes are superior to those offered by competitors.

By meeting these aims, higher number of consumers, who are numerous cardholders,
are likely to use their card as a main card, thereby generating more income for their
credit card holders which will have a great impact on both the customers and the
economy of the country as well, in his research he also said about the collision and
benefits the country he is going to get on the basis of cashless economy. Bartopia
(2016) studied cash less payments in India.

He developed a academic model of payment decisions made by consumers and

sellers. He found that the expediency of cash and was of importance that it will be
beneficial for both the sellers and buyers but in the long run, he came up with the
winding up in his review that after demonetization by the government since it was
the way to stop black money and prevent illegal cash flows in the country, but at the
start it failed but promoted a way of digital transactions in the country like people
literally started using digital means of payment in India which is like net banking,
PayTm small vendors and daily hawkers started using this means of transaction, this
will result in the long run and will have a positive impact on the country with the
positive use of digital payments in India.

Dhanrajetal (2016) The authors attempt to portray the role of Regional Rural banks
(RRBs) in shaping the rural economy and rural credit structure. The RRBs were
established in the year 1975 to shape the rural economy by providing credit to the
needy segment. These segments were excluded by the formal banking systems due
to their inability to access to loan.

The capital requirements were exclusively predestined for small and marginal
farmers, rural small scale producers, labourers. These unbankable populations were
able to improve the income generating activities with the help of the capital that
they received from RRBs. But very soon the bank becomes sick due to poor
repayment and mounting NPAs. The banks were not planned properly and failed to
understand the real need of the capital.

Also there was no follow up for the loans provided to the needy segment. The
traditional production approach also led to huge loss for most of the small time
producers. This is a kind of realization that only providing finance will not be

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adequate, the banks should guide to make them understand the essential demand
supply conditions as well as market need.

But neither the banks nor the implementing agencies are able to see the gap and as
a result of the same the outcome are below the expectation level. He also in his
review had a very positive impact of the regional rural banks had to play in the
country to increase the use of digital transactions and to boost cashless economy in
India therefore, it is important for these types of banks to play the role of volunteers
in the case of digital transactions as to promote cashless transactions and also to
stick with people to train in rural areas like how to use digital means and how to do
digital transactions.

Bhatnagar (2017) The author describes the awareness and adoption of new age
banking facilities by the rural poor. It has been witnessed that after reforms of
financial sector, most of the banking sector. Services are widened their operations by
expanding the banking operations in unbanked areas.

But even after the initial momentum most of the banks are not able to retain the
expansion of the services due higher cost of serving the rural customers. Since, the
earnings are less, providing a basic banking service is a challenge. The traditional
banking services may not be able to provide the services are often become more
complicated.

As the technology started playing an important role, the costs of delivering the
services are also reduced drastically. But the system is not full proof. Lack of
awareness and trust on the system are the major hindrance for the proper
implementation of the system till date. As long as the consumers are not going to
enjoy trust, it becomes difficult for the service providers to adopt the technology
based services which is the new mechanism for financial inclusion and other value
added services.

Serving rural areas in a cost effective manner is surely an important and uphill task
for the service providers and this should be shorted out through proper
implementation mechanism. Ruksan (2017) in her study she had to say about the
various card payment system in India different card payment system in the country
which includes MobiQuick a digital transaction net banking debit or credit card
system in her review she found that there is amore need of safety and banks or the
government also need to put more emphasis on security and needs or urges people
to stay alert as there are lot of spams, fraud and various things going on while doing
digital payments, so it is the task of banks to tell people to never ever share there
password or the other information on any platform.

As India is gearing up for the cashless transactions it is an important step to tell the

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citizens of the country to be aware of the demerits of digital modes of payment in a
positive way like how to stay alert, how to report the technical team if there is any
problem in digital payments. She observed in her study that more than half of the
country daily are witnessing the online frauds or cyber attacks in their accounts while
are facing lots of problem in their different types of payment system as well.

It is important to take baby steps to encourage digital payments but to hold special
seminars in such a way that all people in the country are aware of the flaws of digital
payment system and also it is responsibility of the government to clear the flaws in
digital transaction to boost the cashless economy of India. Midha (2018) The author
discussed the issue of digitalization process and effectiveness of digital India
campaign.

The programme is a good initiative but it has certain barriers which need to be
overcome. Digital India campaign aims to create a cashless society which has its own
advantages. Implementation phase is surely problematic as the concept is new but
over the time period this has to be seen from the perspective of customers.

It is high time to discuss the relevant issues with the customers so that the existing
barriers may be removed. As if the barriers continue to be in this system then it is
very difficult to achieve the goal of the government the digitalization process has
many problems still in 2018 when the study had been done there are many cyber
attacks still taking place in the country so it is very important to curb those issues
and the people related with those issues or the government come up with some
innovative ideas to take action against those cyber attacks on the use of digital
transactions or it is very difficult to achieve cashless transactions or to have cashless
economy as digitalization will paly a vital cog in cashless economy.

Bappaditya Mukhopadhyay (2016) These selection are a unit prejudiced by the

handiness of cashless transactions weigh against the appeal to evade taxes.
Significantly higher proportion of people builds cashless payments currently (12.61%
in 2014 as compare to three. 47% in 2011); Most growth in cashless payments has
been through itinerant payments.

The variables in addition to also the price of cashless transactions have a CAGR of
nineteen, 91% and 24.14%, respectively. A compartmentalization of amendment
agent roles in a very industrial context, acknowledging the distinctive relationship
that club staff has with customers. It highlights, however his could be leveraged to
boost new development and client adoption.

In specific, sturdy bonds exist between agents and clients because of the frequency
of customer visitation, and trust is expedited by their membership standing.
Employees during this study incontestable a capability to be familiar with and answer

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consumer want in related ways that, and mirrored in some detail on the consequence
of client adoption of the cashless card on their role and responsibilities.

Rachna & Singh (2013) Study expected to spot the issues and challenges of
electronic payment systems and offer some solution to progress the e-payment
system quality. With respect to the payments method they have analyzed, it is
unworkable to say that any one of them is perfect, although each one of them has
reward as opposed to others.

If the client wants to maintain space to yourself then they choose those payment
methods which guarantee a higher level of privacy such as e-cash or Net Bill Checks.
If the main concern is security, they should use, smart cards. The study conclude on
the note that, successful implementations of electronic payment systems depends on
how the security and privacy scope perceived by consumers as well as sellers are
popularly managed , in turn would pick up the market assurance in the system.

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 RESEARCH METHODOLOGY Research methodology is the method of doing or
finding the best way of doing a research on a specific topic, there are different types
of research are done on different types of research topic. It is defined as’’the process
used to collect information and data for the purpose of making or deciding business
decisions or other decisions.”

The methodology includes public research, questionnaire, interviews or surveys. This

particular topic research methodology has been taken by questionnaire where list of
questions were given to respondents and they had to answer those questions. 4.1

Data collection methods There are various types of data collection methods are
involved while doing research study, basically there are two types of data-primary
data and secondary data. Primary data: Primary data are those data which are
collected fresh and for the very first time and are said to be original in nature is
known as primary data.

Observation method which is collected from field by observing is type of primary

data, interview method, questionnaire method, case study method, panel method,
survey method these all are the methods of collection of primary data. Secondary
data: Secondary data are those data which has been collected by someone else and
is not original in nature or which had been passed through statistical process is
known as secondary data.

In this particular project study the data collection method has been primary data with
the help of questionnaire with respondents given questions to respond with which is
truly a fresh data based on questions which respondent has to answer. 4.2 Sampling
methods. Sampling helps a lot in the research work which you do, it is an area which
determines the area of the research work which has been done it helps to describe
the best way or the prefer output which a researcher wants to put in his research
work.

If something goes wrong in the sample work then it will definitely affect the final
result of the research work which researcher has done, there are lot of methods of
sampling techniques which helps us in getting the final size or sample, there are lot
of sampling techniques but are mainly categorized in 2 main categories which are
probability and non-probability sampling.

Probability sampling technique uses randomization to make sure that every element
gets an equal chance to be a part of that sample, this sample is also known as
random sampling. Types of random or probability sampling are: Simple random
sampling: It is type of random sampling where every elemnt had an equal chance of
getting selected in the population.

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Stratified sampling: This techniques divides the elements of the population which has
been taken into sub-groups and which is known as strata based on similarity in such
a way that elements within the group is homogeneous and heterogeneous among
the other sub groups which are formed, we need to have prior information about the
population to create or have sub-groups.

Cluster sampling: The whole population is divided into cluster or groups then the
clusters or sections are selected randomly. Clusters are identified by sex, age, size etc
it can be done by single stage cluster sampling, multi stage cluster sampling. Non-
probability sampling is the method of sampling which does not rely on
randonnization, this technique is mostly used or reliable on the researcher’s ability to
choose elements for a sample, the results for sample may be biased and will make
difficult for all part of population to come under it, this type of sampling is also
known as non-random sampling.

Types of non-random or non-probability sampling are: Convenience sampling: This

type of sampling is based on the samples which are available it is costly method and
also when the samples are available. Purposive sampling: This type of sampling is
based on the purpose of the study of the researcher, it is a type of sampling only
when the purpose will be suited for sampling.

Quota sampling: It represents the representative of the population, it is more a type

of pre-set standard type, proportion of trade should be same as population size in
this type of sampling method. Snowball sampling: This type of sampling is used
when the entire population or quantity is unknown to researcher or rare. Therefore
we will take help from the first element of population which the researcher wants to
select in his sample and then ask him to recommend other elements who will fit for
sample size. 4.3

Limitations of study Every research work which is to be done has some flaws,
limitations in the research therefore in this particular research study there are some
limitations. The study is done to to minimal sample size of 100 respondents which
was taken in the survey and the survey was done in Navi Mumbai, so there is a
chance that the response odd people may not reflect the entire population, as the
sample size was restricted to 100 respondents and was done in the city of Navi
Mumbai or suburban areas. Suggestions given at the end of study are purely based
on the survey and the secondary and primary analysis done in the research.

CHAPTER: 5 IMPACT OF CASHLESS ECONOMY

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 IMPACTS OF CASHLESS ECONOMY Impact of cashless economy on economy growth
Cashless economy is termed as an economy where there is no use or limited use of
cash while doing transactions, mostly transactions are done through online payment
methods. Cashless economy has come into India after the government’s decision to
ban high currency notes of Rs.

500 and 1000 respectively, which is also known as demonetization, in this chapter the
topic is the possible impacts of cashless economy on various sectors. Possible
impacts of full cash abadon Banks will be in favor of cashless economy as there will
be less cost of printing of currency notes which involves huge costs, storage or
security of paper money which will be welcome move for banks.

Possiblity is high that cashless economy will reduce the black money and thus, will
have huge impact on corruption and bribe takers. Restriction of using cash will also
impact on the movements of criminals or terrorists organizations in country and
other important places in the country. Now, let us look in detail about the various
sectors in which cashless economy can have its impact on different sectors of the
country. 5.1

Impact on banking sector Banking sector plays an important role especially in

printing and storage of cash or currencies, RBI which is an apex bank of india will
have a major relief of printing notes but there are some of the impacts on banking
sector because of cashless economy they are: If we look at immediate ways with no
cash, there will be no need or requirement of ATMs or cash management services
which banks spend a lot on security of protection of cash, so this all will go away.
Result of which jobs will be lost of security personnel.

With the rise of electronic payment, there will be more demand of digital banking
platforms and investment on these areas of banking sector, as a result it will rise in
popularity and critically. If we look at longer picture, transactions done by customers
can be easily tracked down and the richer data set by banks and others to help
develop future products and services.

If there is going to be cashless then people will spend on e-payment that means the
speed or velocity of money movement will increase at more consistant rate which will
have a positive impact on banking sector. 5.2 Impact on business The impacts of
cashless economy on business sector are as follows: Businesses will be really strong
that means while having an cashless economy it means that companies or
organizations can deal while doing online transactions or transactions through digital
means which will be beneficial for both organizations and customers, for small
businesses like peddlers, hawkers this will be a little problem at the star but cashless
transactions might do wonders for them also because customers for small trasactions
do PayTm, or payment through digital means as well.

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Another positive impact of cashless economy that the business sector will have that
there will be proper audit in big organizations that means that everything will be
clear and no transparancy while doing auditing of organizations, this will be positive
impact of cashless transactions or society for big organizations. There will be more
use of e-payment as there will be limited or no use of cash so this means that
organizations will use more and more digital means of payment this will also have a
positive impact for the boost of cashless economy in India.

Wallet holders in business will get benefits of cashless economy this means that
small traders or manufacturers can also have a little influence on the boost of
cashless economy that means little or small vendors need to adopt quickly the
means of digital transactions also after demonetization the impact of cashless
economy on vendors was huge as for small purchases people were not buying goods
from them due to lack of notes or exact changes, this resulted initial loss of these
types of businesses, but later they adopted the cashless transaction and had positive
results after that.

So, basically business sector is going to have a positive impact of cashless economy
as a whole and they are ready to adopt cashless economy as it will be beneficial for
them in long run for both small and big enterprises. 5.5Impact on education The
impact of cashless economy on Indian education sector till now is minimal or in
future is expected to be minimal, impact after demonetization or cashless economy
are: The verdict of the central government to remove high-value bank notes to curb
unaccounted cash will hurt education institutions that consider donations or
capitation fees for admissions. Accepting as well as accounting donations will
become difficult because of the demonetization drive.

Education sector was not resistant to the Indian theory of 'you can buy everything
with money'. This shift of demonetization will positively restrain this mentality of
many in the country. Nursery admission, private education institutions and
professional higher education together with medical and engineering are the
segment which recognize donations widely. For the first time, these segment are
going to feel the impact in a big way.

Private educational institutions take colossal amount of offerings in Cash which is

40% to 50%. More than the fees of the course. We look forward to that
demonetization will impact the recipient. Admissions in private educational
institutions and medical college admissions comes tagged. The length of donations
without a glitch. The donations in medical colleges is typically more than 100% of the
fees.

Demonetisation will contact both admissions and also the receipt. MBBS seats is

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some colleges goes for Rs40 lakh to Rs60 lakh, while MD seats has a variety of Rs 2
crore price tag on it. Similarly, engineering and management watercourse seats have
a price tag between Rs 2 lakh to Rs 10 lakh each.

This shift can alter the course of luxurious education which can be made more
reasonable devoid of the capitation fee. 5.4 Impact on common man Common man
means aam aadmi in hindi this common man tag or word is very important in context
of India whether related to politics, economics or bollywood.

As common man or people are one who decides the fate of nation, so here are some
of the impacts by cashless economy on common man: At the initial stages of
demonetization when the issue of high currency notes of Rs. 500 and 1000 were
banned by the central government which led the first stage of being cashless India
were totally negative as after demonetization many people lost their lives standing in
long queens for note exchanges in banks, ATM machines etc there were many
reports of many people died during this process so the initial stages was very
negative for this iniative by government. There is many positive signs of cashless
economy or society with respect to common man i.e

many people have welcomed this move from the government as being cashless will
reduce crime rates, corruption, terror funding and also easy track record of money. If
we look at the lower sections of our economy i.e below poverty line people based on
income or low castes there the impact of cashless economy is not so positive as
many people living in below poverty line category had troubles and inconvenience
while doing online transactions or payment of digital means as these kind of people
are used to using cash so it is difficult for them to use digital means of payment.

Also, in rural areas of the country which includes village areas there there is no
proper electricity, or proper internet connection so people there are suffering most
till now even after 2 years of demonetization, people in those areas blame the
government for not providing suitable facilities or providing them good
infrastructure. 5.5

Impact on agriculture Agricultural activity is said to be the most encouraging activity

in India, many people is involved in agricultural activity and lot of thm are
professionals in these activities , agriculture or farming is the source of livelihood in
those areas. Agribusiness is broad term used for agriculture which involves all
agricultural production, distribution and processing.

It includes food, forestnad also fiber production or their by-product utilization and
agricultural chemicals. Impacts of cashless economy on agricultural are not so
positive. Rural & deprived ample he big one is that poorer people are less likely to
have access to financial services, and are more likely to use cash in their daily lives.

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Unless they were contracted free or cheap entrance to financial services, they’d be at
a disadvantage in being able to purchase things in a cashless economy. Big farmers
and business traders who have unaccounted cash as well as the product traders,
artisans and commission agent in the mandis who deals on cash will of necessity feel
the pain.

Resurgence of loan dues when payments are made in the course of cashless
transaction, most of the farmers and agribusiness people are actual fatalities because
when their amount/payments are directly credited to their account.When they have
loan toll in the bank, it is easy way for the bank to remove loan amount from their
account. It benefits the banks and it disbenefits the agriculturists and traders. Income
of commission agents comprise both farm and(non-farm.

The shift will lead to show separate declaration to banks while depositing cash.
Agricultural income whether the amount is Rs 500000 or( Rs 1crore, they will not
have any problem as agricultural income is exempt from income tax. However, they
may face problem during declaring non-farm incomes,” Commission agents include
huge cash transactions and earn benefit on lending.

They contract in real estate, rent machinery, and have petroleum pumps among
various other activities. Suggestion for agricultural Cashless economy First and
principal thing is to set up more number of rural banking with digital mode of system
alongside with swiping machine and other infrastructure to provide easy contact by
the farmers and agribusiness people.

To include the gate to gate knowledge and working out program for both rural
heaps and rural business people campaign through representatives of the
government organization. further organizations like college students plus NCC, NSS,
Rovers & Rangers and other Volunteers Including Teaching staff. Maximum utilize of
media for awareness and safety measures to use Cashless Rural economy.

To formulate use of both Government and Non-Government Organization to form

alertness and also remove their fear of cyber fraud and hacking mind set to safety of
Cashless economy. Government should pledge the safety and security, when
anything/any transaction went erroneous and quick motion of the problem through
Grievance Redressal Mechanism.

Internet connectivity with lofty speed at low-priced rates, more bandwidth

availability, high cyber security support by strong and dominant laws against
cybercrimes. Before deduction of loan dues, banks should let somebody know and
inspect their repaying capacity, without their knowledge banks are not suppose to
deduct the loan dues. There is a need to increase rife knowledge and put to rest the

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fears amongst the public to use these facilities.

Government of India has already initiate major drive for sensitizing civic to make
most use of these avenues. Simultaneously, issues like connectivity, security and
simplicity of transactions, data protection and user charges are also being addressed.
In the long run, this would offer a large boos. Let’s have an understanding about
digital transactions now. Did India become a cashless economy in two years of
demonetization.

India has not completely adopted the method of digitalization. Indians still prefer
holding cash in hand. Not many regions especially the rural areas, have been
comfortable in using digital portals. But it would not be wrong to say that,
demonetization in fact did boost the country’s digital platform.

RBI releases monthly data of payment system on its website, and looking at the
digital performance, India has seen expansion in that section. But remember so has
cash.Data given by RBI reveals that, NEFT transactions were at 123.05 million in
November 2016 month value up to Rs 8,807.88 billion. This rise to 186.7 million by
end of March 2017, aggregate to a massive Rs 16,294.5 billion. The growth increased
further to 212.01 million transactions in volume terms in March 2018 worth Rs
22,540.77 billion. In the first half of FY19, NEFT transaction stands at 181.01 million in
volume terms already by end of September, having worth Rs 18,015.5 billion.
Meanwhile, transactions using IMPS stand at 36.17 million in November, 2016 value
Rs 324.81 billion, which increased to 67.41 million valuing Rs 564.68 billion in March
2017.

It does not end here, IMPS transaction further rise to 110.15 million in volumes worth
Rs 1,038.04 billion by end of March 2018, and by end of September 2018, this stands
at 135.74 million worth Rs 1,256.4 billion.Usage at Point of Sale (POS) has also seen
growth, as it was at 236.47 million in November 2016, rose to 271.17 million in March
2017, further to 318.9

million in March 2018 and to 362.75 million in September 2018 in volume terms.In
value terms, transactions at POS stood at Rs 321.74 billion in November 2016, then
moved up to Rs 356.99 billion in March 2017 to Rs 418.57 billion in March 2

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 Digital payment methods: Road to cashless economy The digital India programme is
the programme of the government to promote various methods of digital means of
payment it is a flagship method or programme which comes under the Government
of India with the vision to convert India into the digital empowered society and
knowledgeable economy which will lead to cashless economy which is an ultimate
aim of the government.

To promote cashless transaction which will boost India to become cashless economy
various modes of payments are there in digital payments they are: Banking cards
Micro ATMs Mobile banking Mobile Wallets Point of sale UPI AEPS USSD Internet
banking Banks pre-paid cards These all are some of the means or mode of digital
payments which will encourage more and more people to use these payments for
cashless transactions and to give a major boost to cashless economy in India.

We will look each of the modes of payment one by one in this particular chapter.
Banking cards: Banking cards include plastic money which means debit cards, credit
cards, cash or travel etc. these cards offer consumers more security and convenience
or easy method to use more than any other payment method, these cards mainly
requires 2 step or 2 factor authentication for safety of payments which includes
secure PIN and OTP(one time password).

MasterCard, Visa are some of the examples of banking cards These cards gives
customers power to buy from online websites’, stores etc with the help of banking
cars, it also saves customers time and is also very quick on response. To get these
banking cards customer has to provide Know your customer(KYC) information, then
after that customers must choose option of cards which means credit or debit cards,
last step is to get PIN number.

Transaction cost in these banking cards icon choose freely without paying any money
for transaction costs, but for first time user you will have to visit nearby ATM to
activate PIN which can take upto 7 days and after than you can freely use these
cards, banking cards are available in more than 700 banks in India. Micro ATMs:
Micro ATM is a device that is mainly used for business correspondents which helps to
deliver basic banking services, it is used for local shops to conduct instant
transactions , this is new technique or tool in which micro platforms will be enabled
by micro ATMs to connect the banks across the country.

This would help people to deposit or withdraw funds regardless of the bank which a
particular person is associated with. This device will be enabled on mobile phones so
that it is available on every business correspondents. Basic things which are
supported by micro ATMs are deposit of funds, transfer of cash, balance enquiry and
withdrawl.

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Mobile banking: Mobile banking is service provided by banks or other financial
institutions which will allow their customers to conduct transactions with the help of
mobile phones, tablets etc. Mobile banking uses an application which is provided by
different financial institutions or given by banks to their customers for some purpose.

Every bank has its own mobile apps for example SBI has YONO app etc for different
types of platforms like Android, iOS mobile platforms. Mobile wallets: It is new way
to carry cash in cashless era or digital form. It is a very good way for digital means of
payment as customer can link debit or credit cards information in their mobile device
to mobile wallet applications, customers can also transfer the money from mobile
wallet.

Customers will get benefits in using mobile wallets as in place of plastic payment
options they can directly pay through tablets, smartphones etc. Customers account is
needed to link to digital wallet to have money in it. Some of the famous mobile
wallets include PayTm, mobiquick, freecharge, SBI buddy app, Jio money, ICICI
Pockets etc are famous mode of mobile payment.

To get mobile wallets an application is must to be downloaded from play store in

your Android phones. Requirements for Transaction: Smartphone / internet Use
MPIN Self-service and/or Assisted mode Cost of transaction Customer pays for
remittances to bank a/c @ 0.5%-2.5% of fixed rates.. It may pay for data charges in
self-service types.

Point of sale: Also known as PoS is the venue or place where sales are done or made,
if we take it on the macro level point of sale may be a mall, city or markets. On micro
level retails take point of sale to be an area where customers do transactions which is
also known as point of purchase. Conditions for service Handheld Device with card
and /or bio-metric  reader Merchant Bank a/c Internet connectivity GPRS/ Landline
Activation of service Paper work with Bank for merchant bank a/c Deposit certain
amount Collect device Configuration and training to operator Required for
Transaction: Whichever Card Resident for bio-metric authentication (AEPS) assist
Mode Limit of funds transfer No edge for regulator MerchAnt’s Bank and payee Bank
may set limit based on its own discretion.

UPI: Unified payment interface is the system which helps multiple banks account into
a single mobile apps, it helps in banking features to merge several features of banks ,
payment of merchants and routing of fund all thes comes under one root, every
banks provide their own UPIApp for windows, android and iOS platforms. Balance
enquiry, history of transactions, account management , add bank account are some
of the services offerEd by UPI.

Activation of service for UPI Download the App for UPI Do register online on the App

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with a/c details Form virtual ID Set MPIN Required for Transaction for UPI
Smartphone by means of internet facility Registered device only Use registered MPIN
Self check Mode AEPS: Aadhar enable payment system is payment method which
permits financial transaction at point of sale(PoS) with help of bank agents with any
bank.

To gt this system customer needs provide KYC information to open new account ,
aadhar number must be linked up with bank accounts, transaction cost in AEPS is nil
but yes bank correspondents might get charged for the transactions. Cash deposit,
withdrawl of cash, aadhar to aadhar transfer of funds are some of the basic services
provided by APES.

Banks decide the limit in this model, otherwise there is no such limit set by RBI.
USSD: Unstructured supplementary service data is unique and innovative payment
method which works on *99# it works on this channel, USSD allows transactions of
mobile banking by the means of basic or simple feature of mobiles, one of the most
important thing is that no mobile data is required for using this service.

*99# service the main aim of this is to take the banking services to every remote
corner and person in India, services provided balance inquiry, mini statement,
services offered by every GSM providersand is available in 12 different languages
which will help to reach in regional rural areas also including Hindi and English. Rs.
0.50 is charged to customer, to get USSD customers have to provide KYC information
for new account, link mobile no.

with bank account, register for mobile banking, get mobile PIN. Internet banking: It is
also knon as e-banking or online banking where it is an electronic payment system
which offers customers of the bank to do various financial transaction with bank’s
website or URL.

There are different types of transactions done online they are: National electronic
funds transfer; National Electronic Funds Transfer is a nation-wide payment system
facilitate one-to-one funds transfer. Under this Scheme, individuals, firms and
corporates can electronically transfer funds from numerous bank branch to any
individual, firm or corporate having an account with any other bank branch in the
country participate in the Scheme.

Individuals, firms or corporates sustain accounts with the bank branch can transmit
finances using NEFT. Even such individuals who do not have a bank account can also
drop cash at the NEFT-enabled branches with instructions to transfer funds using
NEFT. However, such cash allowance will be limited to a greatest of Rs.50,000/- per
transaction.

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NEFT, thus, facilitates originator or remitters to begin funds transfer transaction even
without having a bank account, right now, NEFT operate in hourly batches - there are
twelve settlements from 8 am to 7 pm on week days (Monday through Friday) and
six settlements from 8 am to 1 pm on Saturdays. Electronic clearing system: ECS is an
substitute method for shipping out payment transactions in esteem of the utility-bill-
payments such as telephone bills, electricity bills, insurance premia, card payments
and loan repayments, etc.,

which would prevent the need for issuing and management paper instrument and
thereby help out superior customer tune-up by banks, companies, corporations,
government departments, etc., collecting / being paid the payments. Immediate
payment system: IMPS offers an instant, 24X7, interbank electronic fund transfer
overhaul in the course of mobile phones.

IMPS is an reverberating tool to transfer money directly within banks through

customers through India through mobile, internet and ATM which is not only safe
but also economical both in financial and non-financial perspectives. Bank pre-paid
cards: To transfer or transaction of money the customer need to have smartphone or
internet, use MPIN in assisted or self-service mode, on loading of pre- paid cards
customers might have to pay service charges, or fixed rates in as per transaction cost.

Enquiry of balance, acceptance and payment of money or add money in bank

accounts are some of the services provided by bank pre-paid cards. Fund transfer
limit for users is Rs. 1,00,000 and for merchants like self-declared is Rs. 50,000 per
month. So, basically these 10 are the most used modes of digital means of payment
the government has introduced in their aim to bring India under cashless category.

Digital Payments challenges and growth aspects The Indian economy continue to be
heavily dependent on cash Digital payment systems are heavily dependent on
smartphones that are enabled with data connections, NFC, Bluetooth etc. These
continued faiths on cash persist due to certain challenges deeply rooted in the digital
payments ecosystem in India.

These ingrained issues can be largely attributed to a lack of adequate infrastructure.

In the current scenario, digital payment systems are like mad reliant on smartphones
that are enable with data connections, NFC, Bluetooth etc. Out of India’s 800 Mn
mobile phone users, only 200 Mn use smartphone. Of these phones, only 6 Mn are
NFC-enabled.

An even smaller percentage of users has access to QR code mechanisms. This

translates to approximately 85% Indians who do not have access to the infrastructure
essential to accept the current digital payment system that are heavily dependent on
smartphones. There is a dire need, therefore, for a more interoperable and collective

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process of digital payments in the country.

New startups for digital future:While the government and digital payment companies
push for a cashless economy, the pitfall maybe lies in the lack of a procedure
pertaining on the road to the execution of digital payment methods. While
technologies are abundant, their penetration is lagging plus while innovative startups
that can reduce the cost burden on users are present, adequate bear for their growth
is scarce.

The solutions available now are cookery to individuals who are already well versed
with cashless transactions through credit/debit cards and net banking. Innovative
startups that disrupt the not taken digital payments backdrop with payment
technologies entail small cost adoption models, will level the playing field and
promote financial inclusion. There are some inventive solutions that are currently
looking to decide this technology-utility gap to make digital payments accessible.

Self-motivated startups are leveraging advanced technologies which use other

means of communication – like sound, for instance – to help digital payments. Since
all mobile phones are skilled of producing sound, they can be used for digital 
CHAPTER:7 FUTURE OF CASHLESS ECONOMY

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 Future of cashless economy India is assumed to be the fourth largest cash user in
the world, GDP rate of cash is 12.40% in India, cash is in motion to provide the ratio
by utilization of use which is 20% and in India card transaction amount to 4% of
personal expenditure of people.

Most of the people in India are not so highly educated, illiterate, poor, and also use
less banking transactions to avail internet services which is provided by respective
banks. For these type of people cash is the most common and convenient use of
medium of exchange. Transaction by cash is immediate and do not require huge
formalities unlike online payments, one also don’t need to worry about power
failures, system downfall etc while using completely cash as a medium of exchange
also use of cash unlike banking cards i.e

debit/ credit cards doesn’t involve extra charges so for lower income people they
think that using cash is a much better option rather than going cashless, this is big
area where the government has to work to generate awareness among the poorer
sections of the society that using cashless transaction is also good and safe while
doing exchanges.

If we look at the global picture countries like France or Netherlands with more than
50% cashless, still uses cash as a medium of transactions so it is quite clear that we
cannot completely rule out cash from our economy. Yes, it is true that most countries
are going cashless as a modern form of payment or recent trends and also many
countries have made recent progress under this, but if we look at India lot of work is
to be done in every sector before going even 50% cashless economy.

Since, India is such a vast country that we have already seen in the introduction of
this report that various incentives has been introduced by the governments for
people of using cashless payments and also introducing digital means of payment as
we seen in the modes of payment digitally, which comes under the project of the
government “Digital India”.

Current position of cashless economy/ India When demonetization was introduced in

2016 the agricultural and industrial sector was one which was affected the most, but
now we come fast forward in 2019 things are slowly coming back to track which was
expected as people are getting used to cashless transactions also government has
also introduced schemes for agricultural activities and the experts say that after 2020
and beyond that cashless transaction will be used mostly in these cases and will give
long term positive impacts of going cashless.

Since demonetization economically India suffered because let’s take it a reality this
was one of the complete failure by the central government idea of demonetization,
the main aim of the government was to make free India from corruption which didn’t

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happen so this was a complete failure so economy also drop a bit but now things are
slowly changing GDP is back on track of India and is expected to be around 7.4

in financial year 19-20 so it is a good sign and government is also making a lot of
effort to bring cashless transaction to every Indian in every corner of the country.
World bank back in 2010 estimated India’s black money to be around one-fifth of the
GDP. So, in a country like India where almost transactions are done by cash it was a
historical move to transform from cash to cashless transactions.

With every passing time that means in 2019 india is doing very well in its road to
become cashless economy in its initial stages and lot of work is still to be done.
Under the cashless transactions where many schemes and incentives introduced by
the government lots of bank accounts have also been opened, which was the
ultimate aim of the government to have evry person account which famously also
had schemed name Jan Dhan Yojana in this scheme government has also announced
that amount of 200000 will be given to the account holders as of accident insurance
which has gain fruitful results as of 2019.

All these data has shown that India is now ready to become a cashless economy and
India can create history by becoming the first ever cashless country but there are lot
of loopholes to overcome. The big question is society ready for transformation? With
recent data we can that India is ready for transformation and to become a cashless
economy.

As of 30 September, 2016 80 out of 100 citizens hold smart mobile phone data
according to TRAI, the evolution of significant reduction in data and call rates,price of
the phones shows that the country is willing to shift towards a cashless one. The
government of India is working very hard towards making India a cashless economy
with major initiatives including BHIM and many more.

The data came after demonetization that more than 1 million people had new debit
or credit cards and bank account which gives hint of movement towards a cashless
one. There has been many reports of more than 30% use of apps which includes
digital means of payment like PayTm has been used by people and more than 50%
people have downloaded and are using e-wallets.

The above data are clearly showing that society is now also supporting the
government of making it a cashless economy and also the smart phone revolution
had made many emergence like e-commerce, m-commerce and other services
included and also the value added services which are there such as cashback option,
payback, bill payment options has resulted a positive sign of these smart phones and
also gave India a huge boost to become cashless nation.

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Future is very important in the cas and the government needs to keep up the good
work on its iniatives provided by them, but what the future holds for cashless
economy in india? Future of cashless economy India when banned the high currency
notes of Rs. 500 and 1000 then it was noted that almost 85% of currency has been
banned in circulation, this was also known as India stack.

But more than that happened it is expected that India is likely to become the first
cashless or digital society. Here, is the future and welcome to modern India. Start of
new financial system: If we look 10 years before like till 2009 more thn half of the
Indians didn’t have any kind of identification or even they didn’t have their own birth
certificate, due to lack of these certificates people could not access the services of
banking or insurance or even they can’t get driving license.

In 2009, the government launched Aadhar it became one of the most successful
schemes of the government and most successful IT project that was ever done in
India. Till 2017, almost 93% of people has digital proof of identity. Aadhar has taken
to new dimension:In 2016, India launched another part of its digital world known as
India stack.

In this, it is the series of secure and connected system which citizens of the country
can store and share their data which includes address, bank statements and tax
findings this all can be done via Aadhar too. India stack also allowed people to open
bank accounts, brokerage accounts, helps to buy mutual funds can be done
anywhere in India with a fingerprint or scan from Aadhar. India stack could help in
achieving India success of cashless economy in future and future is very bright in this
case for cashless economy.

Cashless India is possible and the future; Let’s go back to 2016, when demonetization
was introduced back then it was termed as an isolated move by many people ,
however the demonetization was an event which has forced people to move towards
cashless society or digital world. Since, when Aadhar has been introduced almost 270
million bank accounts have been opened in India.

A report in 2015 by MasterCard has said that india was one of the least interested
countries to move towards Digital world, but see now India is the fastest growing
digital market in the world. This is the future because if digital transactions can
happen in India where many people are only rely on cash, then it can happen
anywhere. India stack is the future as the move towards digital payment it can help
to achieve that for whole world and put an end to cash system Investment options: A
big barrier of growth in the country is been continuous nm- performing loans in the
banking system of India which is been huge rise since 2009.

Demonetization has recapitalized the Indian banks more than $80 billion has been

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flown into the banks after demonetization, this speaks the volume itself. Since, the
start of 2017, nifty bank index which represents the 12 biggest banks in the nation is
over 30% India is already known for its IT sector and telecommunications area
cashless economy will help them achieve more in future and will be more beneficial
for these sectors in the future.

But, the government work is not over here smooth , properly secured payment
process will help to increase the number of digital payments option sin the nation, so
for this the government needs to tighten their seat belt and work upon this area . As,
India is still heavily dependent on cash in rural areas as cards only 8 per cent of the
consumption expenditure personally.

If we see in the developed countries more than 50 per cent people uses card as
option of payment rather than using cash. The continuous growth of smartphones,
internet and e-commerce have seen the growth rate per year and as as a result more
people are using digital modes of payment, we are expecting this growth rate to
continue and expected the rise of banking cards i.e

debit and credit cards increase every year New market payment options like PayTm
are only expected to increase as the time progresses and is expected to reach in rural
areas to every people very soon. This will also be exciting time for payment
companies and stakeholders for these companies an time by time it is expected to
increase and eventually all stakeholders and regulatory authorities will come
together to achieve the target of cashless economy.

As it is already been said by Prime Minister Narendra Modi that India is ready to
taste the new journey of world and is ready to get into the footsteps of other
countries into digital world people of India will witness new technologies with
upcoming innovative ways of doing transactions or the transfer of funds. Although,
the current system of payment is more dependent on banking cards which includes
debit and credit cards it is expected to grow in more numbers in come years and will
also give major boost to the economy of the nation as transactions without using
cash will be upliftment towards cashless era.

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