Cashless transactions imply making payments and receiving money without using physical currency notes or coins. These coins and notes, which are replaced with non-cash alternatives such as Mobile Wallets, Debit/ Credit cards, Net Banking, etc. These methods directly transfer money between virtual wallets and bank accounts without the use of physical currency.
Today, after two months of demonetization, most Indian’s have already adopted some or the other cashless methods for their everyday transactions. The demonetization drive is one step in the direction of becoming a cashless society. The Government has also launched a variety of schemes and discounts that would help common citizens while switching over to new cashless transaction methods.
Going Cashless Entails Several Benefits, such as:
Convenience: The most important aspect of going cashless is the convenience it brings with it. You are no longer required to carry large amounts of cash, and can make payments easily with the use of your mobile phone.
Discounts: The Government is offering various discounts and incentives for promoting cashless transactions. Take advantage of these special offers, discounts and earn through cash-backs with the use of apps, wallets and credit/debit cards.
Spend tracking: Going cashless makes it easy to keep a track of your expenditure and spending. Every transaction is recorded and you also receive SMS/ Email confirmations after transfers. In addition, at the end of each month you shall receive a statement listing every transaction conducted.
Budgetary Discipline: With spend tracking; it becomes easier to adhere to a fixed budget. This would promote discipline and ensure that you are able to spend, save and invest in the right amounts.
Reduced Risk: Going cashless reduces the risk of theft. Physical cash can be stolen and used by anyone. A card or mobile however requires a second level authentication, making it safer.
Others: Going cashless also includes saving time while transacting and accounting. It helps individuals transact while sitting at home, office, or wherever they like, at whatever time they like.
Government Support for Promoting a Cashless Economy
Aadhaar Card - Unique Identity for all Indians: The Aadhaar card will provide a massive long term boost to the Indian economy. This unique identity card uses biometric information of an individual and can be used as an identity proof by all citizens. This card has enabled many non-banked individuals in becoming a part of the formal financial system.
Jan Dhan Yojana - Bank Accounts for all Indians: The Jan Dhan Yojana was initiated two years ago. It allows all individuals to open a bank account with zero balance and provides facilities such as debit card, accidental insurance and access to formal credit.
Demonetization: This move has increased awareness among individuals and has highlighted the benefits of a cashless economy. In addition, it has also resulted in a substantial chunk of black money being bought into the formal financial sector.
Payments/ Small Bank Licenses: The RBI has recently issued payments and small bank licenses, with the intention of promoting financial inclusion and economic growth. These moves will have significant positive long term impacts on our economy and banking system.
Unified Payments Interface/BHIM App: The Unified Payments Interface and BHIM App have been recently launched by the Government as a means to promote cashless transactions. They help in making cashless transactions between individual across banks extremely simple and easy to do.
Discounts/ Waivers on Cashless Transactions: In a bid to promote cashless transactions, the Government offered various waivers/ discounts on digital payments. Apart from the waiver on service tax on card transactions. There were several discounts/ waivers on highway tolls, railway bookings and insurance purchases.
Going Cashless Safely
It is important to ensure safety of your money and bank account details when going cashless. A few key points to remember are:
Activate Phone/ Email Alerts: The most important aspect of going digital is to ensure that you are aware of everything that happens in your Bank account. For this, it is strongly recommended that you activate phone/ email alerts that inform you of any transaction that takes place in your account.
Strong Passwords/ Pins: A strong password or PIN is extremely necessary. With increasing occurrences of fraud and hacking, a strong password will keep your account secure and information protected. Choose a strong password which is not easy to crack and never share it with anyone.
Start Small (Get accustomed and then make larger transactions): When you are new to digital payments, it is advisable to begin small. Transfer small amounts in your alternative account. Once you get accustomed to it, you can make larger transactions with ease.
Your Bank Won’t Ask for the following on a Phone Call: Your Bank will never ask you to disclose the below mentioned details on a phone call. This information is not to be disclosed to anyone and should never be shared. If anyone asks for this information, never disclose it and make sure you also report the same.
Debit or Credit Card number
T-Pin or CVV number
Net banking password
Other personal information (such as address, DOB, etc.)
Install Antivirus/ Anti-Malware: Install reliable antivirus software on your computer and your Smartphone. This will keep your information confidential and make it difficult for a potential hacker to get into your system.
Log Out After Usage: Always make it a point to logout from the system after usage. When in public places, it is extremely important to log out and never share your account information with anyone.
Download Apps from the Official App Store: Make it a point to download digital payment apps from the official app store, so as to ensure that only genuine apps are installed on your phone. It will also help in protecting you from viruses and malware.
