Qrius
  • Business
    • Banking
    • Finance
    • Investment Guide
    • Policy
    • SMEs
    • Net Worth
    • Startup
    • Pros and Cons
  • World
    • Entertainment
    • Climate
    • Culture
    • Economy
    • History
    • Politics
    • Elections
    • Sports
      • Scrabble
    • Health
    • Lifestyle
  • Science & Technology
    • Archaeology
    • Nature
    • Space
    • Tech
    • AI
    • Fintech
    • Futuristic Technologies
    • IOT
  • India
    • Culture
    • Economy
    • History
    • Politics
    • Sports
    • Entertainment
    • Climate
    • Health
    • Lifestyle
  • Contributors
    • Digital Marketing Guest Post
    • Education Guest Post
    • Travel Guest Post
    • Fashion Guest Post
    • Fintech Guest Post
    • Health Guest Post
    • IOT Guest Post
    • Politics Guest Post
    • Sports Guest Post
    • AI Guest Post
    • Technology Guest Post
    • Literature Guest Post
  • Content Services
  • Business
    • Banking
    • Finance
    • Investment Guide
    • Policy
    • SMEs
    • Net Worth
    • Startup
    • Pros and Cons
  • World
    • Entertainment
    • Climate
    • Culture
    • Economy
    • History
    • Politics
    • Elections
    • Sports
      • Scrabble
    • Health
    • Lifestyle
  • Science & Technology
    • Archaeology
    • Nature
    • Space
    • Tech
    • AI
    • Fintech
    • Futuristic Technologies
    • IOT
  • India
    • Culture
    • Economy
    • History
    • Politics
    • Sports
    • Entertainment
    • Climate
    • Health
    • Lifestyle
  • Contributors
    • Digital Marketing Guest Post
    • Education Guest Post
    • Travel Guest Post
    • Fashion Guest Post
    • Fintech Guest Post
    • Health Guest Post
    • IOT Guest Post
    • Politics Guest Post
    • Sports Guest Post
    • AI Guest Post
    • Technology Guest Post
    • Literature Guest Post
  • Content Services
03 Aug, 17
03 Aug, 17

Online or offline: Money in the times of technology

With grand advancements in global technology, the new VISA initiative of digitalising payments may take the economy by storm.

By Zimble Digital

By Divya Rajagopal

Visa has offered to fund small merchants to upgrade their payment technology if they promise to stop taking cash from their customers. This is a new initiative to steer their users away from cash and rise above competitors by digitalising. The initiative is based on an analysis by the researchers at Visa. According to their study, India can save up to Rs 70,000 crore in the next five years by taking measures to reduce cash handling and widening the digital transaction base.

Is a cashless economy worth it?

When a person is completely dependent on cash, he’ll have to queue up at an ATM every time he needs money. Unfortunately, if the machine is not working he will have to wait until the next workday. On the other hand, the digital transaction checks the account balance, authorizes the transaction, and transfers the money to the vendor’s account with only a 2% processing fee. The whole process takes only several minutes. This will be especially useful in case of emergencies, like in hospitals.

Similarly, the digital transactions can help save on rail tickets, highway toll, or purchase of insurance. Mobile wallets like PayTM have their own cash-back offers and discounts. India would benefit by providing a financial incentive to consumers and merchants. This can be achieved through new regulations, digitisation of government payments, new technology adoption, open-loop systems for mass transit, and inter-ministerial collaboration to transit to a less-cash society.

The convenience angle

Replacing manual finance trackers, Fintech has facilitated mobile invoices for every transaction. Hence, tracking of expenditure has also become automated. Several apps are available for analysing and cutting down the unnecessary expenses, which will result in better budgeting. Controlled spending could also result in higher investing.

If the same amount of cash does not flow back into circulation and people continue to use mobile wallets and cards. This is also likely to bring down the ‘latte factor’. The latte factor calculates the amount which can be saved from insignificant daily expenses like a cup of coffee. Unaccounted expenses are one of the reasons the budget tightens at the end of the month. This can be completely eliminated by digital transactions.

Where the loopholes lie

Financial technology depends on smartphones. Losing them would be a worse nightmare than losing some cash. It will not only make the user be susceptible to identity-theft but also be rendered helpless without cash. With the rising incidence of online fraud, the risk of hacking will only grow as more people hop on to the digital platform. If there is no additional security system for the mobile wallet, it might expose many to fraud and deception.

Additionally, India has a low internet penetration of 34.8%. The older generation face a lag when it comes to technology, thereby making it difficult for those are not familiar with smart technology. A simple mistake like forgetting a passcode might make them completely money-less. The digital payments will also have an effect on the labour who are paid daily.

Looking through the plan

Cash has a high cost in the economy because of the time, effort, and resources required in operating and maintaining the cash infrastructure, along with a high cost of cash withdrawals. However, Visa’s proposal targets small merchants and local vendors who do not facilitate digital transactions yet. Demonetisation has caused the citizens to switch to fin-tech but ever since cash became available again, the digital transactions have reduced.

Though the bigger picture states that the digital transactions might help the Indian economy, a large part of the population is still dependent on cash. A slow transition to a cashless economy is the only solution, lest all the current cash turns into useless pieces of paper.


Featured Image Source: Visual Hunt


Stay updated with all the insights.
Navigate news, 1 email day.
Subscribe to Qrius

About Author

Zimble Digital

Visit Homepage

what is qrius

Qrius reduces complexity. We explain the most important issues of our time, answering the question: "What does this mean for me?"


Featured articles

1

Before Christ

What Does BCE Mean? Difference between BCE, CE, BC and AD
2

GDP

Revealing the Top 10 GDP Countries of 2024: A Deep Dive into Global Economic Powerhouses
3

Android

The Ultimate Guide to the Best Car Racing Games for Android in 2024
4

cars

Best Family Car in India in 2024: Experience Memorable Journeys with Loved Ones
5

Extreme sports

Hidden Chess Rules: Elevate Your Game with Secret Strategies
6

adventure sports

Cristiano Ronaldo vs Lionel Messi: Why Cristiano Ronaldo Is Better
7

40 Top GK Questions: Boost Your Knowledge Quotient!
8

Why has increased productivity not led to more free time?
9

gita

Gita quotes on karma: Want to live your best life? Laws to live by…
10

Facebook

Facebook and Instagram down: What reason did Meta give?

About Qrius

  • About Us
  • Content Services
  • Contributors
  • Become a Contributor
  • Contact

Contribute

  • Digital Marketing Guest Post
  • Education Guest Post
  • Travel Guest Post
  • Fashion Guest Post
  • Fintech Guest Post
  • Health Guest Post
  • IOT Guest Post
  • Literature Guest Post
  • Politics Guest Post
  • Sports Guest Post
  • Technology Guest Post
  • AI Guest Post

Quick Links

  • World
  • Entertainment
  • Climate
  • Culture
  • Economy
  • History
  • Politics
  • Elections
  • Sports
  • Health
  • Lifestyle
  • Science & Tech
  • Archaeology
  • Nature
  • Space
  • Tech
  • AI
  • Fintech
  • Futuristic Technologies
  • IoT
  • India
  • Culture
  • Economy
  • History
  • Politics
  • Sports
  • Entertainment
  • Climate
  • Health
  • Lifestyle
2018 QRIUS. All Rights Reserved