Post-Demonetization: The Era of Cashless Transactions

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Cashless transaction mainly depicts executing financial transactions without the aid of physical money i.e. notes, coins, bills, etc. It refers to performing financial transactions digitally with the aid of cards, mobile phones, or modern online payment applications like paytm, freecharge, etc.

The genesis of cashless transactions came in daily life during the 1990s when electronic banking became popular. The vogue of cashless transaction has been dramatically increased nowadays in India due to demonetisation. The RBI categorises every mode of cashless fund transaction using net accounts, magnetic stripe cards, smart cards, etc.



  1. Ease of Transactions – There is a faster execution of transactions, moreover transactions are impregnable and one can buy or sell goods easily sitting anywhere because cashless transactions are get-at-able. There is no entail of carrying cash all the time everywhere.
  2. Trail of Transactions – E-payments are very helpful to keep a track of payments/receipts by an individual which espouses the accounting. Trailing of transactions can eventually give rise to an urge in an individual to contain their transactions.
  3. No Threat of Cash Loss – Carrying physical money is mostly common to such threats of being stolen. Due to this new move in the society of going cashless annihilates the cash loss threat.
  4. Comparison – One can compare his own expenditures with incomes through the trails of transactions and thus one can contain his own transactions that would lead to Proper Personal Budget Control. One can have check on their own balances.
  5. Discounts– Different modes of online payments offer exciting offers to their users that attract their users to go cashless for e.g. Paytm, Freecharge, etc. These applications often provide cash back facilities to their users.


  1. Threat of Hacking – Doing online transactions are not always secured because hackers are minded to hack one’s account. This is the biggest threat in e-commerce as hackers have decryption capabilities i.e. hackers can easily break the encrypted data which is deleterious to the society.
  2. Failure of Networking – Networking needs server, client, mode of transmission, etc. if server is not at its good operation, then every component connected to a network will have operation failures. The server break down is very common and thus it can disrupt the flow of transactions.
  3. Unawareness/Lack of Knowledge – The literacy rate of India is about 70.04% and there are many people who don’t know how to use online applications. Many old age people find it difficult of doing online transaction or even are not confident with online dealings.
  4. Use of Various Equipments – Using equipments like magnetic stripe cards, debit cards, credit cards, net wallets, etc. are sometimes become difficult to carry them as they need more attention by the user and one needs to be careful while using them.
  5. Over Transactioning – There are many people who take undue advantage of credit card facilities for e.g. They keep on doing transactions without bothering of making payments of them all and these bad activities reflect bad impression on other users as well.

If we come to a conclusion, everything has its own merits and demerits, similarly cashless transactions have also their own pros and cons. But going cashless is just like stepping another milestone for an individual in fostering the advancement and progress of India.

Ms. Simran Jeet Kaur (Student of CA Final)

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