siliconindia | | January 20179Growth in Financial Inclusion: The surge in bank accounts, credit/debit cards, and digital wallets has only been seen in metropolitan areas. In the long run, however, limited cash flow will push digital payment methods into rural area thereby creating a utopian situation of the cashless transaction for the entire nation. Financial inclusion at this scale will be nothing but beneficial for the economy. Increased Spending: From a wider perspective, cashless payments will boost economic growth due to increased spending. Consumers forego minor purchases owing to a lack of cash whereas, in a cashless setup, these purchases will add to the money spent. The increase in spending power will also result in the creation of more jobs thus benefitting the economy in more ways than one. Tracking Spending Behavior: By tracking the commercial activities of individuals or groups of people, the government will be able to predict consumer behavior and improve policies. Planning for sectors such as housing, transportation, and energy management will be more inclined to the preferences of consumers when such behavior tracking becomes characteristic of the government. Growth in E-Commerce: Although the Cash-on-Delivery model was the most sought after method for e-commerce payments (83 percent according to a survey by Business Insider), digital transactions were also popular even before demonetization set in. In a cashless economy, e-commerce will definitely grow manifold due to the ease of paying through wallets and conducting online transactions. The growth in e-commerce will catapult the economy into an advanced, technology-driven phase. Simplified Payments: The ease that comes with using digital payment methods is unparalleled. With transactions becoming quicker and simpler to carry out and track, there will be less friction in the economy. Accounting will also become less time consuming. Digital payment will indubitably make life simpler for individuals and but will also lead to the smooth functioning of the economy. In conclusion, there are a lot of upsides to a cashless economy. Overall it will bring stronger accountability and transparency into the system. It is going to drastically affect the corrupt practices and also give a new lease of life to various new age businesses, start-ups who have been struggling with abysmal financial infrastructure based largely on cash. It will reduce the risk and cost of cash handling as soft money is safer than hard money. It will also reduce government liability. 43567In a cashless economy, e-commerce will grow manifolds due to the ease of paying through wallets and conducting online transactions
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