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Cashless Transaction in India

Article in International Journal of Innovative Technology and Exploring Engineering · September 2019
DOI: 10.35940/ijitee.J1022.08810S219

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 International Journal of Innovative Technology and Exploring Engineering (IJITEE)
ISSN: 2278-3075, Volume-8 Issue-10S2, August 2019

Cashless Transaction in India

Shipra Gupta, Rupa Khanna

Abstract: It was the date of 8th November, 2016 on which Rs. ii) Aadhaar enabled payment system (AEPS) it can be
500 and Rs.1000 bank notes of the Mahatma Gandhi series was used in all banking transactions. These transactions are
demonetized. This news was announced by the government of done through a banking correspondent based on
India. This step was taken necessary to hold control on illegal Aadhaar verification. If Aadhaar number is registered in
activity and terrorism. After the demonetization Due to the lack
that bank in which customer has held an account, there
of cash, digitalization has got the root. There is no way to do the
payment. The Government of India has provided many cashless is no need any documentation, signature and physically
gadgets/devices to the public. Cashless transaction means when presence of customer.
the goods and services are purchased by the use of various iii) Unified Payment Interface (UPI) If any customer has
electronic mediums, without any use of cash and cheques. The held a bank account, he/she can
aim of this study is to know about the modes of cashless payment, receive and sent payment through UPI-based
guidelines regarding its security, awareness programmes adopted application. It is a type of interoperable payment
by the government of India and its impact on both manners system.
positive as well as negative. iv) Digital wallets or mobile wallets It is a type of virtual
Key Words: Cashless, Digital Payment, public awareness, wallet service, used by downloading an application.
online payment and mobile wallets etc. It stores bank account, debit/credit card information in
that format which is encoded for the security of
I. INTRODUCTION payment. Now at present some mobile wallets available
To make Faceless, Paperless, Cashless India, the Digital in the market are freecharge, paytm etc. It can be used
India is an extraordinary plan of the Government with a in add money in the mobile wallet and same can be
dream to renovate India into a digitally empowered culture used for make payments and purchases of goods and
and knowledge economy. Digital economy means a little or services.
very low cash flow in a given society, thus every other v) Banks Pre-paid cards It is a type of instrument that
purchases and transactions will be made by electronic can be used for load money for the payment of purchase
channels, as direct debit, electronic funds transfer, mobile the goods and services and may not be linked to the
payments, multi-functional ATMs, internet banking etc. bank account of the customer. But in a debit card,
Cashless designating handled as by means of credit cards, issued by the bank it can be linked with the customer’s
bank transfers, and checks, with no bills or coins handed bank account.
from person to person: some say we are headed toward vi) Internet Banking It is the process of carrying out
a cashless society. banking transactions by online. It is usually used to
Cashless India includes the following. make payment or online fund transfer via NEFT, RTGS
1) Modes of Digital Payment or IMPS. It has a wide scope.
2) Security about digital payment vii) Mobile Banking It is the process of carrying out
3) Capacity building and awareness banking/financial transactions through a smart phone.
4) Awareness program to promote the digital The main function of this banking is to provide the
payments within Government and People. information about different digital payment apps, a
variety of mobile wallets and other services like UPI.
1) Modes of Digital Payment viii) Micro ATM It is a device that is used for deliver basic
i) Unstructured supplementary service data (USSD) it banking services by many business correspondents. For
is a unique technology to global system for mobile conduct instant transactions, this device will fruitful for
communication (GSM). It depends upon the GSM business correspondents. This is a low cost mobile
network system. It provides mini statement, account phone connected device and can connect to across the
balance and fund transfer information in mobile. This country banks and available at every business
facility is available in 12 different languages and for correspondent. A person or customer can withdraw and
poor people who cannot afford smart phones and for deposit the money any time without gone the bank by
that place where low or no internet connectivity is the help of particular business correspondent after
available. shown authenticated identity. A business correspondent
provides the money to customer from his cash drawer.
Essential business correspondent acts as a banker for his
customer after verify the authencity of customers by
using his UID. There are various functions of this
device such as fund transfer, balance enquiry, deposit
Revised Manuscript Received on August 10, 2019.
Shipra Gupta, Associate Professor, Department of Commerce, Graphic
and withdrawal the fund.
Era Hill University, Dehradun, Uttrakhand, India. E-mail:
[email protected]
Rupa Khanna, Professor, Department of Commerce, Graphic Era
Deemed to be University, Dehradun, Uttrakhand .

Published By:
Retrieval Number: J102208810S219/2019©BEIESP Blue Eyes Intelligence Engineering
DOI: 10.35940/ijitee.J1022.08810S219 113 & Sciences Publication
 Cashless Transaction in India

ix) Banking cards This card is mostly used in digital It is an approach to develop the greater ability in people and
payment method as due to its various features and organizations to address new challenges. It is an ability to
benefits. Security of payment and its convenience is the perform how appropriate work can do either by individual or
main benefit of this card. Some well known card combined with others public sector organizations. It can be
payment modes are Visa, Master card and Rupay. done either by provide simple training or by technical
x) PoS Terminals It is a hand held device that is basically assistance and gain the knowledge and experience so that
installed at all purchasing stores. It accepts all banking they can solve the problems by effective actions, reach
cards (debit/credit cards). This is very beneficial for sustainability and implement the changes. It can be used in
small level business owners, those who cannot afford several areas in organizational fields like: to make the
expensive electronic devices. strategic policies, planning and procedures and how these
xi) Bharat Interface for Money (BHIM) Application To can be changed and controlled. Some policy, schemes and
make the payment in this app user allows to using the procedure programs are promoted by some institutions or
UPI application. It works as collaboration with Unified organizations are as follows:
payment interface (UPI) and all the transactions are a. DigiShala – Educational TV Channel for Digital
carried out by using a Virtual payment address (VPA). Payments on DD Free Dish.
Bank account holder can easily link his/her account b. Digital Finance for Rural India: Creating Awareness
with this app. To link with multiple bank accounts, is and Access through Common Service Centres
also possible through this app. Anyone who has a (CSCs).
mobile number, Valid bank account number and debit c. Vittiya Saksharta Abhiyan (Visaka) by Ministry of
card, can access this app. Human Resource Development (MHRD).
d. Indian Railways to install 10,000 Point of Sale (POS)
2) Security About Digital Payments
machines to promote cashless transactions using
After digitalization it’s mandatory how to know about the debit/credit cards. State Bank of India has been
proper use of cashless transactions. . If we want that our mandated to install 10,000 POS machines at various
country will be digitalized, proper cyber security need to be locations.
maintained by the government urban as well as in rural
areas. Proper training and guidance should be given to those 4) Promoting Digital Payments Within Government
people who have unaware the knowledge of how to do Government of India has doing many efforts for bringing
digital payments. Everyone would want to know if the paperless services across the country especially in rural
digital payments are secured or not and how we secured it. areas. MeitY (Ministry of Electronics and Information
What are the precautions we have to make the secured Technology) is an e-governance program of the government
transactions and what are the programmes arranged by of India. It provides a time bound and targeted approach to
government for the security of digital payments. Through all citizen, businesses, and governments for assessing many
Digital payment is a safe and secure method of transaction; services like receipts and payments through electronic
recently PM Narendra Modi launched the app BHIM which modes. The guidelines of electronic payment and receipt
is an online money transfer application. This app has a system provide to all the departments so that they can help
three-tier security system for the purpose of security. Its or educate to everyone.
three-tier security is:
5) Promoting Digital Payments Among People
a. Only account holder can access his/her account.
b. It is registered through his/her mobile phone so Many services access by government for promoting cashless
he/she can manage app on his/her device. payments and many gadgets are develop by government for
c. If in any case someone fraud has acquired the public interest. Many devices and incentives are provided by
information regarding account holder’s documents government.
for that the third and final tier is the 4 digit pass code. a. Excise duty will be nil for POS (payment of sale)
So, first the pass code is entered in order to access the devices and all related goods for its manufactures.
application. b. By the use of debit/credit cards, e-wallets, mobile
Government should adopt these Awareness banking, different applications through mobile and
programmers regarding cyber security. different package of incentives and points are
i. Government should be taken a legal action regarding provided for the promotion of digital payment.
the awareness of safe and secured digital payment c. None of the charges are levied by banks and PPI
programme and minimum one person in a family (prepaid payment instrument) on customers for the
should be awared about this online payment transactions upto Rs. 1000 made by IMPS (immediate
programme. payment service), USSD based (unstructured
ii. To understand these programmes effectively supplementary service data), UPI (unified payment
government has to take effective advertisements and interface) system.
aware about the benefits from online transactions. d. Different deductions promoted by this plan regarding
iii. Government has to opt multilayer security Income tax and card payment system.
programme and OTP’s for getting the faith and
secured transactions.
3) Capacity Building And Awareness

Published By:
Retrieval Number: J102208810S219/2019©BEIESP Blue Eyes Intelligence Engineering
DOI: 10.35940/ijitee.J1022.08810S219 114 & Sciences Publication
 International Journal of Innovative Technology and Exploring Engineering (IJITEE)
ISSN: 2278-3075, Volume-8 Issue-10S2, August 2019

e. Oil marketing companies for example LPG is II. SUGGESTIONS

provided some discount on per refill cylinder by
i) From time to time new features (applications)
online booking and online payment.
should be developed in Software Company to know
f. Different digital payment schemes, toll free helpline
about the hackers and mistakes.
numbers and promotional digital payment schemes
ii) Though a small initiative of going cashless can be
are run by Government of India.
taken in the urban areas where it is feasible. Whereas
g. No set up fees.
it raises the concern in rural areas. To achieve the
h. Low or minimum service charges will be charged on
same in a rural area a proper organization has to be
digital transactions.
setup to help the people in villages.
Digital payment is very beneficial, if some points
iii) After using the smart cards etc. their service charges
(guidelines) should be noticed by using it:
should be lesser (minimum).
i) Digitalization is a step towards anti-corruption, which
iv) Different incentives and schemes should be provided
occurs during large money transaction.
by the government for promote the digital
ii) By the help of cashless transactions no cash in hand
transactions.
money is need there is no need for physical money.
v) Everyone who is using digital banking applications
iii) It works as Fast, Convenient and can be use as a
should improve and upgrade their security level from
proof.
time to time and should be very alert about digital
iv) Reduce the corruption and documentation work, time
security.
saving, control on black money and easily access.
v) In rural areas where lack of net connectivity is a
III. CONCLUSION
major problem, digital payment plays a major role.
vi) Most of the people they don’t have mobile phones If everyone will operate the transactions by online manner,
and bank accounts in rural areas, can use digital no one can corrupt the data. The government will be easily
payment. tracking to all the account holders’ and catch the hacker’s
vii) From time to time many rewards, discounts and cash easily. Government has to take legal action seriously in this
back offer provide to customers for using mobile matter so that in each and every family minimum one person
wallets and digital payment apps. should be aware or learnt about how to do cashless
viii) By paying the different types of bills from at home or transactions for digital payment and how to make a secure
anywhere. online transaction. However now we are not totally but
ix) Scams can be avoided. mostly used this e-wallets and digital banking. Government
x) No need to go to banks and retained the currency. has maintained many policies, awareness programs and
xi) No one can deny to accept and payment. schemes for upcoming this process in regular manner. So in
xii) It’s not possibility to fake currency. upcoming years we can expect for secure and fully
xiii) Printing notes problem can be solved by using plastic digitalized India. Slowly- slowly it has gain the popularity in
cards. India. Many apps are launched in this sector and many are in
xiv) Easily handle the money. process. It will become a hassle-free and secure payment
xv) It can also be used in emergency service. system in coming time.
xvi) No chances of currency duplicity.
xvii) These transactions are highly reliable. REFERENCES
Limitations: The limitations of cashless transactions are as 1. M.C. Baro, IJCRT, vol. 5(4) 2017 Digital India: Concepts and
below Implications. ISSN – 2320-2882.
i) Some people in India, they don’t know cash less 2. Rani Suman (2016) Digital India: Unlessing Prosperity, Indian
system, how to operate ATMs, smart phones Journal of Applied Research, Vol 6(4) 187-189.
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transactions, etc. They feared about operate online for the development of rural India, International Journal of Business
money transactions. management 2(2) 1333-42.
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iii) One of the major challenges for digital payment is India and its impact on the society 4(4) 2016.
5. Giridhari, Mohanta, S.S.Debashish & S.K.Nanda, A Study on growth
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captured the finger prints, and misuse it by your
accounts.
iv) Some people in India, they don’t know the ads are
not always true and secure. They believe on fake e-
mails, ads and messages therefore they can easily
deceive by such hackers.
v) Always do the help of someone is not beneficial for
us regarding to help in learn the process of digital
payment or online transactions. Sometime our
innocence creates problems for us.
vi) Lack of proper security system.

Published By:
Retrieval Number: J102208810S219/2019©BEIESP Blue Eyes Intelligence Engineering
DOI: 10.35940/ijitee.J1022.08810S219 115 & Sciences Publication
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