What Does It Take To Go Cashless?

But where there is no free service mandated, banks have their own ways. Take cheque payments, for instance. An easy alternative to cash, banks make the customer pay for the cheque book. Again, Internet-based banking comes with its own price tag. If there is one takeaway in all this, it is that the customer should pay for efficiency, while banks subsidise inefficient transaction modes.

So, then, all the talk of curbing cash economy seems just that - plain talk. Any rational observer may be forgiven for concluding that the system as a whole is rather set to promote cash. Massive income tax campaigns are a case in point. They remind the taxman-weary citizen: "Beware as you use your card! We know it all."

Last heard, returns of taxpayers making aggregate credit card purchases of over 200,000 per year were being automatically flagged by tax systems as potential candidates for scrutiny. Why should someone paying his utility bill or making a small purchase through a credit card be prima facie worthy of suspicion? Can a mode of payment backed by "know your customer" and audit trail raise eye brows, given that the very same payment sails through when handed over as cash? There are less intrusive ways to isolate credit card repayments by cash, if that be the concern.

Quite clearly, what we need is coherence in policies -- not a situation where one set of policies promotes cash infusion, directly or indirectly, while another mindset actively tracks cash transactions because these are likely to have originated from unaccounted sources.

What could be an elegant way forward? No one wants a charge on ATM withdrawal as a disincentive to cash-out and pay. But surely, there is a case for some sort of an incentive for those of us willing to go cashless - through a credit card or debit card maybe, through internet or mobile banking, or by just signing away a cheque leaf.

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