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INTRODUCTION
The Indian payment system is rapidly transiting to more and more IT based systems. In the retail
sector we have very high volumes of money transactions. Other than cash, one of the growing
payment methods adopted by merchants in the sector is payment cards. However, the whole
isometrics of moving from cash-driven economy to cashless economy has somehow been assorted
with demonetization that was aimed to extract liquidity from the system to unearth black money.
With increasing adoption of electronic payments, particularly those driving e-commerce and m-
commerce, there is a growing demand for faster payment services which, in turn, facilitate ease in
doing financial transactions. Reducing Indian economy’s dependence on cash is desirable for a
variety of reasons. India has one of the highest cash to gross domestic product ratios in the word,
and lubricating economic activity with paper has costs. According to a 2014 study by Tufts
University, The Cost Of Cash In India, cash operations cost the Reserve Bank of India (RBI) and
commercial banks about Rs21,000 crore annually. Also, a shift away from cash will make it more
difficult for tax evaders to hide their income, a substantial benefit in a country that is fiscally
constrained.

LITERATURE REVIEW
Cashless economy is not the complete absence of cash, it is an economic setting in which goods and
services are bought and paid for through electronic media.

[1] According to Alvares, Cliford (2009) in their reports “The problem regarding fake currency in
India.” It is said that the country's battle against fake currency is not getting easier and many fakes
go undetected. It is also stated that counterfeiters hitherto had restricted printing facilities which
made it easier to discover fakes.

[2] Jain, P.M (2006) in the article “E-payments and e-banking” opined that e- payments will be
able to check black “An Analysis of Growth Pattern of Cashless Transaction System. Taking fullest
advantage of technology, quick payments and remittances will ensure optimal use of available funds
for banks, financial institutions, business houses and common citizen of India. He also pointed out
the need for e-payments and modes of epayments and communication networks.

[3]Srinivas, N. (2006) in his study “An analysis of the defaults in credit card payments”, has tried
to analyse the socio-economic profile of the defaulters of credit cards, to identify the set of factors
which contributed to such defaults and suggest relevant measures to minimize the default cases.

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Analysis of reasons indicated that economic hardship is the major reason identified by majority of
the sample units follows by rigid payment structure and loss of job/business. The main suggestion is
that the banks concerned should redesign the payment structure of credit card defaulters in a
flexible and affordable instalment.

Research gap:-
Many research activities are conducted relating to cashless economy, its growth, its impact on many
business houses & on the business transactions. But no has conducted research on impact of
cashless economy on the peoples of a particular area.

OBJECTIVES OF THE STUDY:-

The aim behind this Research is

 To know the meaning of Cashless Transactions.

 Impact of Cashless Transaction System on the peoples of a particular area.
 Analyze the future trend of Cashless Transaction.

RESEARCH METHODOLOGY:-
I. Sources of data: Both primary and secondary data.
II. Sample Design: Random.
III. Sample Size: 50 peoples.
IV. Scope: Peoples from different blocks of Basanti colony.
V. Tools and Techniques: Questionnaire, personal interview, Graphical report.
VI. Period: Two week.

RELEVANCE OF THE STUDY:-

Cashless economy is the new innovation in economical sector. It changes the life style of people
and makes the life easy. Peoples can easily do their transactions by sitting in their room by online
transactions. No one has conducted research on impact of cashless economy on the general public
of Basanti colony before me.

LIMITATION OF THE STUDY: My study is confined to the peoples of basanti colony

only. Randomly I have taken 50 peoples. It is not possible to collect information from each and
every people.

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Meaning of cashless economy:-
Cashless economy refers to the term describing the system in which the movement of physical
money i.e. paper currency and coins are replaced with digital means of payments which includes
plastic money, digital devices, and over the net transactions. Such a replacement does not mean the
non existence of physical money but its circulation is minimal. The term “cashless economy” dates
back its origination in the 1960s (Bergsten, 1967; Lee, 1967 etc), but it no more remains a
theoretical concept as countries around the world are preparing themselves for the conversion from
cash to cashless statuses. Achieving this status does not involve an immediate removal of currency
but steadily and gradually expelling the cash from the society through the proper steps.

Physical money hereby means the paper currency and coins issued by the Government which forms
a part of the legal tender.

Plastic money involves the use of plastic cards like debit cards, credit cards, Rupay cards, Smart
cards, chip based cards, bank pre-paid cards, contactless cards, etc to complete various transactions.

Electronic mode involving payments includes the payments done through the digital devices like
smart phones, laptops, computers, notepads etc using internet, e-wallets, PayPal, or Paytm etc.

AROUND THE WORLD SCENARIO:-

As per the survey conducted by me regarding the WORLD’S MOST CASHLESS COUNTRIES
following developed countries were interpreted among the most cashless on parameters of non cash
payments share of total consumer payments and the percent of population having Debit Cards:

 Germany
Noncash payments' share of total value of consumer payments: 76 percent
Percent of population with a debit card: 88 percent

South Korea
Noncash payments' share of total value of consumer payments: 70 percent
Percent of population with a debit card: 58 percent

United States
Noncash payments' share of total value of consumer payments: 80 percent

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Percent of population with a debit card: 72 percent

THE NETHERLAND
Noncash payments' share of total value of consumer payments: 85 percent
Percent of population with a debit card: 98 percent

 AUSTRALIA
Noncash payments' share of total value of consumer payments: 86 percent 
Percent of population with a debit card: 79 percent

Sweden
Noncash payments' share of total value of consumer payments: 89 percent
Percent of population with a debit card: 96 percent

United Kingdom
Noncash payments' share of total value of consumer payments: 89 percent
Percent of population with a debit card: 88 percent

Canada
Noncash payments' share of total value of consumer payments: 90 percent
Percent of population with a debit card: 88 percent

France
Noncash payments' share of total value of consumer payments: 92 percent
Percent of population with a debit card: 69 percent

Belgium
Noncash payments' share of total value of consumer payments: 93 percent
Percent of population with a debit card: 86 percent

This indicates that the developed world is on the verge of getting cashless and this is not being
achieved overnight but by making their economies well equipped to go cashless. the people
possessing debit cards vary approximately between 50% to 90% of the population but their non

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cash spending lies in the window of 80-95% among these countries which indicates that not only
card payments play role in making economy cashless but also the usage of digital devices equally
play an important role. So the technology is itself an important need for going cashless.

INDIAN PERSPECTIVE:-

The Digital India Program started by the Government of India is a flagship program
visioning Indian transformation into a digital economy. “FACELESS, PAPERLESS, CASHLESS”
is the main role of Digital India. Thus to strengthen the program, the government of India went on
for Financial inclusion linking the bank accounts of people with their salaries and opening of bank
accounts linked with AADHAAR accounts under JAN DHAN Scheme. Also the step of
DEMONETIZATION equally attributes towards making the India move forward on the path of
becoming Cashless.

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


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Impact of Cashless Economy:-

3.1. Impact of cashless economy on business process:-

The impacts of Cashless Transaction on the Business sector are as following:

 Businesses are legally strong.

 Proper audit. Not hidden excess liability.
 Increase use of e-payment.
 Wallet hold business gets an advantage.

3.2. Impact of cashless economy on education process:-

The impact of Cashless Transaction on the education sector is likely to be minimal. Some of the
foreseeable fallouts of demonetization on the Indian education sector are as following:
 The decision of the central government to withdraw high-value bank notes to curb
unaccounted cash will hurt education institutions that accept donations or capitation fees for
admissions.
 Accepting and accounting donations will become difficult because of the demonetisation
drive. Education sector was not immune to the Indian theory of 'you can buy everything with
money'. This move of demonetisation will definitely curb this mentality of many in the
country.
 Nursery admissions, private education institutions and professional higher education
including medical and engineering are the segments which accept donations widely. For the
first time, these segments are going to feel the impact in a big way.
 Private educational institutions take huge of amount of donations in Cash which is 40% to
50% more than the fees of the course. We expect that demonetisation will impact the
recipient.
 Admissions in private educational institutions and medical college admissions comes tagged
along with donations without a glitch. The donations in medical colleges are usually more
than 100% of the fees. Demonetisation will impact both admissions and also the receipt.
 MBBS seats is some colleges goes for Rs40 lakh to Rs60 lakh, while MD seats has a range of
Rs 2 crore price tag on it. Similarly, engineering and management stream seats have a price
tag between Rs 2 lakh to Rs 10 lakh each. This move can change the course of expensive
education which can be made more affordable devoid of the capitation fee.

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3.3. Impact of cashless transactions on economic growth:-

The impact of Cashless Transaction on Economic Growth in India is as following:


 According to the Bank, India's growth in the first half of FY 2017 was underpinned by
robust private and public consumption, which offset slowing fixed investment, subdued
industrial activity and lethargic exports.
 The medium-term may be liquidity expansion in the banking system, helping to lower
lending rates and lift economic activity," the World Bank noted.

3.4. Impact of Information Technology in cashless economy-:

The impact of Information Technology in cashless economy in India is as following:


 Because of information technology the cost of bank will reduce that will result in lower
 Service charges for customers.
 Making Transaction is very easy by using information technology.
 New IT Technology like biometric are help to do secure and transparent transaction.

NEGATIVE IMPACT OF CASHLESS ECONOMY:-

As we know every good has its bad side also, surely aura of cashless transactions is spreading all
over India converting India into Digital India, simultaneously the more and more use of internet is
giving rise to various negative effects also. Following can be highlighted as the negative effects of
going cashless with reference to India:

1. Increase in Cyber Crimes: Due to the increasing rate of online frauds, the risk of hacking
will also increase as more people will be on the digital mode. More and more use of internet is
giving boost to cyber crimes at an increasing pace as can be seen below:

Rate of Cyber Crimes in India (Under IT Act) (Table 2)

Year Registered Cases Persons Arrested

2011 1791 1184

2012 2876 1522

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 2013 4356 2098

2014 7201 4246

2015 8045 5102

2. Increased chances of trapping: Performing digital transactions using public networks can
be more prone to traps on mobile devices and thereby giving opportunity to hackers to access
account related sensitive information.

3. Frauds through digital transactions: A report by ASSOCHAM-EY on study titled

“Strategic Nation measures to combat cyber crimes” highlights 46% Complaints of credit/debit
cards frauds, 18 % on account of hacking of email ids and 21% complaints on account of
cheating through mobiles.

In October 2016, 3.2 million card details were stolen in malware related security areas. These cards
belonged to customers of SBI, HDFC, ICICI, Axis Bank and were

used at ATMs. Stolen debit cards were used in china. No legal decision has been taken and the case
is still under investigation.

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 Analysis of the Study:-
There is some analysis reports of my project work which have been conducted by me from some
peoples of an area which are as presented below:-

Q.1. Do you have A/C in bank?

Yes No Total No. of peoples
45 5 50

A/C having %
A/C having %

100%

80%

60%
90%
40%

20%
10%
0%
Yes No

Q.2. If yes then in which bank do you have A/C?

SBI BOI PNB SYNDICATE ICICI Other Total no. of
peoples
30 5 5 5 3 2 50

Percentage of A/C's in different banks

Percentage of A/C's in different banks

80%
60%
40%
60%
20%
0% 10% 10% 10%
6%
4%

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Q.3. How do you make payment?
Cash Card Total no. of peoples
30 20 50

Payment type
Cash Card

40%

60%

Q.4. Where do you use card more?

Vegetable market Shopping mall Restaurant Total no. of peoples

0 25 25 50

Use of card
100%

80%
Axis Title

60%

40%

20%

0%

Vegetable market
Shopping mall
Restaurant

Vegetable market Shopping mall Restaurant

Use of card 0% 50% 50%

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Q.5. Do you think card payment is safe?
Yes No Total no. of peoples

45 5 50

Review of peoples card payment system is

safe or not
Review of peoples card payment system is safe or not

No 10%

Yes 90%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Q.6. Which method do you use while making payment by online payment system?

Net banking E-wallets BHIM Debit and credit cards Total no. of peoples
20 20 5 5 50

Method of payment

Debit and credit cards

BHIM

E-wallets

Net banking

0%
20%
40%
60%
80%
100%
Debit and credit
Net banking E-wallets BHIM
cards
Method of payment 40% 40% 10% 10%

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Q.7. Is it beneficial to you than earlier?
30-50% 50-70% 70-90% Total no. of peoples
5 5 40 50

Review of peoples cashless system is

howmuch beneficial than earlier payment
system
Review of peoples cashless system is howmuch beneficial than earlier payment system

100%

80%

60%

40% 80%

20%
10% 10%
0%
30-50% 50-70% 70-90%

Q.8. How much has cashless system affected your life?

Fully Partially Not affected Total no. of peoples
23 22 5 50

10%

50%

40%

Fully Partially Not affected

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Q.9. Do you think it will reduce corruption?
Yes No Total no. of peoples
40 10 50

Review of peoples is cashless system reduce

corruption or not
Review of peoples is cashless system reduce corruption or not

100%
90%
80% 80%
70%
60%
50%
40%
30%
20% 20%
10%
0%
0 0.5 1 1.5 2 2.5

Q.10. Which e-wallet service is mostly preferred by peoples after cashless system?
Pay tm Freecharge Mobikwik Oxigen Citrus Others Total no. of peoples
25 18 2 2 2 1 50

Most preferred e-wallets

Paytm Freecharge Mobikwik Oxigen Citrus Others

4% 4%
4%
3%

50%

35%

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Q.11. How much growth in e-wallet services after cashless system?

Oct.2016 Feb.2018
1.7 6.3

7.00%
6.00%
5.00%
4.00%
3.00% 6.30%
2.00%
1.70%
1.00%
0.00%

Oct.2016
feb.2018

Growth in e-wallet services

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RESEARCH FINDINGS: -

1. Maximum numbers of peoples are having their bank Accounts. So out of 50 people, 90%
peoples are having their bank accounts and 10% people don’t have any bank accounts.
2. Maximum numbers of account holders are having their bank accounts at State Bank of India
(SBI).
3. Most of the users use cash to make any payment. So out of 50 users 60% users make
payment by cash and 40% users make payment by card.
4. It is found that half of people are using cards both at Shopping mall and Restaurant. People
don’t use their cards at vegetable market.
5. Most of the users gave positive response regarding card use. Only 10% of users had negative
reply.
6. The peoples are said that by card payment system the money can be safely transferred and
there is no risk of money stole. So maximum peoples are said that card payment system is
safe.
7. Most of the users are make payment through Net banking and E-wallets while they make
payments by online payment systems.
8. So out of 50 peoples 40% users are use Net baking and E-wallets, 10% users are use BHIM
app and Debit and credit cards.
9. Maximum number of users are said that cashless payment system is beneficial than earlier
payment system.
10. So out of 50 users 80% users are agree with 70-90% beneficial, 10% users are agree with
50-70% beneficial and 10% users are agree with 30-50% beneficial.
11. The cashless system is affects some peoples life fully and partially and also not affected
some peoples life.
12. But the number of fully affected peoples life is more than the number of partially and not
affected peoples life.
13. So out of 5o peoples 50% peoples are said that it affects fully their life and 40% peoples are
said that it affects partially their life and only 10% peoples are said that it does not affects
their life.
14. Maximum users are said that the cashless system is reduces the corruption.
15. So out of 50 users 80% users are said that it reduces corruption and 20% users are said that
it does not reduces corruption.

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 16. Maximum users are said that Paytm is the mostly preferred E-wallet service after cashless
system.
17. There is also other E-wallet services like; Oxigen, Freecharge, Mobikwik, Citrus etc. But
the Paytm is the mostly preferred E-wallet service according to the analysis report.
18. So out of 50 users 50% users are use Paytm, 35% users are use Freecharge, 4% users are
use Mobikwik, 4% users are use Oxigen, 4% users are use Citrus and 3% users use other E-
wallet services.
19. There is a heavy growth in E-wallet services after cashless system in India.
20. According to my analysis before the cashless system introduced in India at oct.2016 the E-
wallet services growth is 1.7% but now after the cashless system introduced in India the
growth in E-wallet services is 6.3%.

CONCLUSION:-

However, the benefits of this move have now started trickling in with more and more people
Switching to digital modes of receiving and making payment. India is gradually transitioning from a
cash-centric to cashless economy. Digital transactions are traceable, therefore easily taxable,
leaving no room for the circulation of black money. The whole country is undergoing the process of
modernization in money transactions, with e-payment services gaining unprecedented momentum.
A large number of businesses, even street vendors, are now accepting electronic payments,
prompting the people to learn to transact the cashless way at a faster pace than ever before.

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REFERENCES:-

[1] Alvares, Cliford, (2009) ―The problem regarding fake currency in India.‖ Business
Today; 3/8/2009, Vol. 18 Issue 5, p24-24.

[2] Jain, P. M. (2006). E.-payments and E- Banking. Indian Banker, March. Pp.108-113.

[3] Srinivas, N. (2006). An Analysis of the Defaults in Credit Card Payments, Southern
Economics. July. pp. 19-21.

[4] http://www.cnbc.com/2014/11/20/the-worlds-most-cashless-countries.html

[5] Impact and Importance of cashless transaction in India. (Pdf)

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