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June - 2016 - issue > CXO Insights

Is India Ready To Be A Cashless Economy?

Rahul Kothari, Head of Business, PayU
Wednesday, June 15, 2016
Rahul Kothari, Head of Business, PayU
Headquartered in South Africa, PayU is a leading online payment service provider specialized in creating a fast and simple payment process for merchants & buyers.

Money, irrespective of shape or form, has facilitated trades and transactions between us since ancient times. It's an obvious importance that has been witnessed throughout ages, and across geographical borders. Over the years, money and monetary transactions have evolved with time, enabling smooth and efficient negotiations between various parties involved. Technological advancement in recent times has contributed in creating smoother monetary transactions through various electronic networks.

The economic stability of a nation can greatly influence the amount of cash flow generated across different sectors; industrial or otherwise. With constant development and innovation, many sectors have witnessed growth, which in turn played a major role in developing the economic well-being of the country. Major money transfers are now being done by electronic transaction facilities which have made trading as well as general buying and selling of goods easier. Advancements like these are also helping developing nations in gaining recognition and economic importance all over the world, one of them being India.

India is currently one of the fastest growing economies in the world. According to a report by the World Bank, India's Gross Domestic Product (GDP) is being anticipated to grow up to 7.5 percent in 2016. Another report by Goldman Sachs, an international investment banking firm, states that India's growth potential could reach eight percent in the next four years, helmed by greater technological advancement, urbanization and substantial access to banking facilities for all. The continuous economic development of India has also attracted many investment opportunities from all over the world.

Observing and supporting this constant advancement, the Government of India has hinted towards making India a Cashless Economy, as a part of its Digital India blueprint. A cashless economy refers to a system in which flow of cash within an economy is invisible and intangible. All monetary transactions in such economies are facilitated through various electronic mediums like direct debit, credit & debit cards, e-wallets or virtual wallet, digital currency and others. Through a cashless economy, all kinds of transaction records can be maintained regularly on a digital platform. This can prove to be an advantageous factor in regulating and curbing the flow of money in the black market as well as illegal and underground economies.


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