Cashless India is a mission launched by the Government of India led by Prime Minister Narendra Modi to reduce dependency of Indian economy on cash and to bring hoards of stashed black money lying unused into the banking system. The country embarked upon this transition to a cashless economy when the government took the revolutionary step of demonetisation of old currency notes of Rs 500 and Rs 1000 on November 08, 2016. It was on 8 November 2016 that the Government of India took the whole country by storm by announcing that the currency notes of Rs 500 and Rs 1,000 were no longer legal tender. The government move aimed at curtailing the menace of black or counterfeit money which is largely used to fund criminals and terrorists as part of a parallel economy. The acute shortage of money in the wake of this decision led to long queues of people outside ATMs or banks seeking to exchange their notes or withdrawing cash.
The main advantage of a cashless society is that a record of all economic transactions through electronic means makes it almost impossible to sustain black economies or underground markets that often prove damaging to national economies.
Types of Cashless Modes and Payments
Mobile wallet: It is basically a virtual wallet available on your mobile phone. You can store cash in your mobile to make online or offline payments. Various service providers offer these wallets via mobile apps, which is to be downloaded on the phone. You can transfer the money into these wallets online using credit/debit card or Net banking. This means that every time you pay a bill or make a purchase online via the wallet, you won’t have to furnish your card details. You can use these to pay bills and make online purchases.
Plastic money: It includes credit,debit and prepaid cards. The latter can be issued by banks or non-banks and it can be physical or virtual. These can be bought and recharged online via Net banking and can be used to make online or point-of-sale (PoS) purchases, even given as gift cards. Cards are used for three primary purposes – for withdrawing money from ATMs, making online payments and swiping for purchases or payments at PoS terminals at merchant outlets like shops, restaurants, fuel pumps etc.
Net banking: It does not involve any wallet and is simply a method of online transfer of funds from one bank account to another bank account, credit card, or a third party. You can do it through a computer or mobile phone. Log in to your bank account on the internet and transfer money via national electronic funds transfer (NEFT), real-time gross settlement (RTGS) or immediate payment service (IMPS), all of which come at a nominal transaction cost.
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