An infrastructure where no physical cash is in circulation is a cashless system. Payments are made through debit/credit cards, bank electronic fund transfers or virtual wallets.
A few facts first (Source: The Statistics Portal):
- In 2017, an estimated 1.66 billion people worldwide purchase goods online. During the same year, global e-retail salesamounted to 2.3 lakh crores and projections show a growth of up to 4.48 lakh crores by 2021. In Asia Pacific, e-retail sales accounted for 12.1 percent of retail sales in 2016 but only for 1.8 percent of retail sales in the Middle East and Africa.
- An increase from 254.5 crores in 2013-14 to 865.9 crores in 2016-17. India Sees 55% Increase In Digital Transactions In A Year; Mobile Banking Jumps 122%
- Risk Reduction: The danger of cash getting stolen or lost is negligible. Regardless of whether the card is stolen or lost it easy to obstruct a credit/charge card or a versatile wallet remotely. It is additionally a more secure and simpler spending choice while travelling.
- Convenient: The simplicity of directing money related exchanges is most likely the greatest spark to go advanced. With the appearance of computerized modes, one can maintain a strategic distance from line for ATMs, transact 24*7 and spare time. Moreover for specialist co-ops, with the development of e-KYC, it is no longer necessary to know your customer physically as the payments model has overcome limitations related to physical presence.
- Tracking spends: Spending via portable or PC applications can be effortlessly followed with a straightforward snap. This enables clients to monitor all their spending and deal with their financial plan successfully.
- Overspending: utilizing money rather than cards or versatile wallet goes about as a characteristic defense for individuals who think that it’s hard to control their spending.
- Losing device: Losing your smartphone can make you helpless to identity theft, as well as be rendered defenseless without physical money or some other instalment choice. This can be particularly hazardous in the event when you are travelling abroad or in villages or towns with absence of banking infrastructure or other instalment alternatives. Another disadvantage is that you have to keep your telephone continually charged. In the event that the telephone bites the dust on you, you will be stranded, especially in the event that you are amidst a critical buy or managing a crisis.
- Difficult for tech-unsavvy: India has a low Internet penetration of 20.26%(2017), according to the Internet Live Stats, and only 46.15% of all mobile phone users have a smartphone (2017). Besides the practical difficulty of going digital. It’s a problem for the older people, who may suddenly find themselves locked out of their accounts if they can’t download an application or don’t have money.
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Source: Online-Shopping and E-Commerce worldwide: Statistics & Facts. Retrieved from https://www.statista.com/topics/871/online-shopping/