Cashless India: Barriers And Solutions
A cashless transaction is one that eliminates the use of physical currency notes, coins and cash, relying on digital payment solutions instead. Digital currencies replace cash and legal tender is exchanged and recorded in electronic/digital form.
India has seen a spike in digital transactions since the 2016 demonetisation drive, and digital payments are only growing. However, transforming into an entirely cashless economy isn’t going to happen overnight. There are still many hurdles to overcome. Here are a few cashless India barriers, and how to get around them.
The Unbanked “Analog” Population
India has an unbanked population of close to 140 million people – that’s a significant number of people with no bank account they can link to in order to make digital transactions. According to a government circular from 2016,40% of Indians are outside the ambit of formal banking institutions. While the Pradhan Mantri Jan Dhan Yojana has helped bring down the number of unbanked citizens from 557 million in 2011 to 233 million in 2015, more recent data indicates that over 165 million Indians still don’t have bank accounts. A bank account, smartphone, and data connectivity are the three prerequisites of being able to transact digitally – and this can only happen when the government makes a move towards universal financial inclusion.
There’s also the issue of India’s vast informal economy, which runs almost entirely on cash. 92% of the Indian economy is made up of informal workers, who contribute around 50% of the GDP. Around 80-90% of these workers are paid in cash (which are often undeclared assets). Only with a massive overhaul in this segment can a cashless economy become a reality.
Security And Privacy Concerns
Another major roadblock and cashless India barrier is internet security and fraud. First off, only 30% of the population is connected to the internet, and the system still faces outages. 2016 saw over 3.2 million debit cards get hacked due to outdated systems and technologies.
Cybersecurity is a major concern for digital India. With more people using digital payments and wallets, there is increased exposure to online fraud, data theft, malware and virus attacks. In fact, digital payment frauds account for about 50% of all bank frauds in India! In the fiscal year 2018-19, 1,477 frauds were reported with regard to ATM/debit card, credit card and internet banking transactions of over 1 lakh.
No doubt, all these problems are cashless India barriers – but they can be worked out with the right approach and a push for universal financial inclusion. There are several benefits: transparency in transactions leads to less black money in circulation and the possibility of money being stolen. Studies have also shown that transaction costs are lowered when payments go digital since the money spent in transit becomes negligible.
Paytrac: A Smart Tool For Cash-Mukt Bharat
Digital payments are growing and cannot be ignored. Digital payment providers like PayTM, Google Pay and PhonePe help remove cashless India barriers and bring more consumers under the digital umbrella.
Paytrac is an app that enables merchants to offer more digital payment options to their customers with a smart tracking solution. Paytrac tracks incoming and outgoing payments from multiple modes like UPI, wallets, QR, PoS, online bank transfers and more so that you can stay on top of all your daily settlements.
It scans payment data and presents it to you in an easy-to-read dashboard. Track daily, weekly and monthly settlements and get a glimpse of your overall business over a 28-day period. With every spend automatically showing up in the dashboard, you will never miss a payment or wonder where your money is being spent.
Paytrac also has an audio notification feature. Switch it on in the language of your choice and receive an alert each time an amount is credited to your account – so you never miss an update, even in the middle of a busy day. The app is available in English, Hindi and 7 local languages, including Marathi, Gujarati, Punjabi, Bengali, Tamil, Telegu and Kannada, making it easy to use in any part of the country.
It also doubles up as an order management app. Customers can send their orders and shopping lists to you via WhatsApp and Paytrac scans and captures them. Then, you can upload it into the “orders” section, edit and process the order and generate a manual receipt! It’s that easy.
And that’s not all – Paytrac has a smart message broadcast feature that allows you to connect with your customers in real-time. Create a new message or choose from one of the templates within the app. Once your message is ready, you can send it to your entire customer base via WhatsApp, Telegram, Facebook Messenger or SMS.
All these features in one easy to use, safe, secure and FREE app. See how Paytrac can boost your business and make going cashless easy for you and your customers – download today!