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What are the benefits of cashless economy?

Ever since the historic announcement of Prime Minister Narendra Modi that led to demonetization, the government is taking special steps to make India a cashless economy. In a country where more than 90% of transactions are carried out by cash and many people are yet to have a bank account, turning India into a predominantly cashless economy is easier said than done. However, under the present circumstances, it has now become necessary for us to closely inspect the benefits of a cashless economy and how it can change our lives for the better.

One of the most important advantages of becoming a cashless economy is the sheer convenience that it provides us while carrying out financial transactions. This means that people will not have to stand in long queues outside ATMs or need to carry bundles of cash when they are buying anything or going out of station for traveling or other purposes. This also makes it safer to manage money when a person is traveling. Carrying out transactions without actually using cash will be particularly beneficial in case of real emergencies, medical or otherwise. This means that a person can carry out financial transactions at any time of the day without worrying about office hours. One does not even have to be present physically while carrying out the transactions.

Cashless Economy Trend in India
Cashless Economy Trend in India

By using mobile wallets for carrying out payments, one can easily avail a lot of discounts whether they are looking to buy anything, pay utility bills, buy air, rail or movie tickets or perform any other kind of transactions. The mobile wallets regularly offer discounts and cashback offers that allow people to save money and perform other transactions later on with reduced expenses. The wallets also offer loyalty benefits and reward points on the existing debit and credit cards which can improve the cash flow of the consumers marginally.

Using cards predominantly to carry out financial transactions also reduces the risk associated with theft. While it is impossible to get cash back once it is stolen, it is possible to electronically block a card once it has been stolen. This ensures that the money in the card will not be stolen by any unauthorized personnel. This particularly helps when people are traveling from one place to another and carrying a bulk of cash can actually cause a lot of inconvenience.

Since the government is all set to ward of a number of taxes when it comes to cashless or digitalized economy, it would be possible for people to have more money on their hands than ever before. This is certainly going to help people who tend to work with limited funds in their day to day lives. Moreover, having more cash in their cards or bank accounts can actually improve the lifestyle of people and encourage them to spend on things that would get them comfort and leisure.

Another important reason why people should support the concept of cashless economy is that it is going to help people practice a sense of budget discipline in their day to day lives. Since each and every small or large transaction is recorded by the bank authorities, it is possible to keep tabs on spending and manage money in a more efficient manner. There are also numerous tools and apps that can help people to track and analyze their spending habits which can in turn make it possible for them to come up with methods to control their spending. This can also help them to manage their money for further investments. Such features and benefits can help people to manage their finances effectively for a better future.