Merits and Demerits of Cashless Economy

The cashless economy is the great initiative. It has a result in the diminishing of tree cutting. Papers are being lesser used. It's a simple and very easy way to transact money. But it has demerit also like the area where the facility is not available or online facility is not available will result in some kind of trouble.

Some of the impacts are;

Paper is saved.
More transparency.
Use of technology.
Security and risk factors are reduced.
Black money is reduced.

If we see ten years down the line this cashless economy is going to benefit the society a lot.

But as of now it is not that much useful because of unawareness among people. Most of the people are resisting these changes because they don't have proper idea about the merits and demerits of the implementation.

So, as a citizen of India we all should have to take the initiative to teach all ar make everyone aware about the changes taking place in our country.

Making India a cashless economy is a good initiative. It'll benefit the people in many ways. But at the same time, we cannot ignore the fact that it has some demerits too. For instances, the area where there is lack of resources for this process, it is impossible to function this system properly. Moreover, a great number of people in India are still illiterate. For them, it will be difficult in the transaction of money.

I believe there is more advantages of the cashless economy than it's disadvantage like cashless money transfer is more transparent, hence more manageable (means less corruption) , easy to transfer funds, requires less time.

For instance, if one lives in Delhi wants to transfer funds to Mumbai he can transfer that using internet banking or using a mobile wallet, credit card etc. So it was easy, it took less time than going to the bank and then transfer money.

Most of the times blank money gets accumulated because the bank (government) has no way to keep track of transactions happening, but in a cashless economy, the bank can keep track of it and if the applicable tax will be charged on those transactions.

Now coming to disadvantage, one of the biggest disadvantages is lack of security,

As now it has become rather easy for a thief to steal money by sitting in front of the computer.

First of all, cashless economy is a great economy which is the consequence of digital India. The most important advantage of the cashless economy is every transaction done is noted and has a e-receipts, which promotes less corruption. Other advantage is that the money can be stolen if it is in physical form but it doesn't happen with the digital payments provided that the software and the databases are secure.

At the same time it has its own disadvantages for eg, people from rural background or illiterates can't go cashless but, anyhow this can be compensated by bringing awareness and educating them. Other disadvantage is that the digital money or the transactions has to protected from hackers or cyber criminals.

I hope these challenges are resolved at the earliest.

Merits of the cashless economy is way too much as compared to the demerits, a world without currency note is definitely a big dream for many of our economists.

Personally, in my view, the cashless economy should only be applied where the literacy rate is 100% both in academics and computer world knowledge otherwise it may be biased for some section of our society.

India is a developing country. If we want to make it a developed one we should have these kind of initiatives and implemented in a way that it won't affect its citizens.

A 60 year old man has no idea how to pay in a electronic way while a 10 year kid knows how to pay through card and e-payments.

Cashless economy can be implemented only in countries which have developed a long time ago while in India this takes time.

Hello everyone,

Merits:
1) An individual does not need to carry cash with him or her everywhere.
2) It will reduce the chance of theft from the wallet.
3) Give freedom from the problem of change when the transaction is of the odd amount.
4)Transfer of money between virtual accounts usually takes less time.No need to stand in a queue at banks.
5) The advantage of cashless is that it is easier to track illegal transactions.
6) Since all transaction will be done through organised channels that is through banks and financial institutions. So, No businessman can evade taxes.
7) Cashless transactions would stop the operation of such businesses like prostitution, drug trafficking, terrorist financing, money laundering and election funding.

Demerits:
1) The small retailers in India deal only in cash and have not been able to invest in the digital infrastructure.
2)The biggest disadvantage of the cashless economy is that not everybody has the knowledge of doing digital transactions and hence its reach is limited to urban.
3) People having half knowledge of digital payments are exposed to cyber fraud and losing their hard earned money to online scam and hacking of bank accounts.
4) Digital mode of payments like the credit card, wallet payments, internet banking involves some transactions fee which is not the case with cash transactions .

Cashless economy is obviously a good concept but it comes at the cost of privacy of people. This concept reduces the need for holding cash and through this concept, the circulation of fake currency can be regulated. But to go cashless means getting digitalized for which literacy is a must which is a limitation for Indian economy. Also, for digitization, accounts are linked with cards which may lead to the hacking of private information.