So, PM Modi has announced today that he wants to aim for making India a cashless economy. Now what does that mean? How can you prepare yourself to go cashless?

What is cashless economy?

First off, don’t worry hearing the term “cashless economy”. It’s not a bad thing but in fact, a great initiative by the Govt. It is one of the main ways to curb black money and make sure all transactions are trackable in an economy. All major developed countries in the world are largely “cashless” (Sweden was the first to go completely cashless). Which means that people in those countries mostly transact using cashless methods like credit cards, debit cards and other methods. It is safe, easy to use and comes with more benefits than problems.

In India, however cash has been a primary mode of transaction for years. And this has its problems. Hopefully, with this initiative in India, the economy will prosper and bring many long term benefits for the country.

Advantages of a cashless economy

• Less cash, less crimes (Source)
• Solid cash carry disease causing germs. This can be curbed. (Source)
• Trackable money transactions making it transparent economy.
• Less problems to deal with like black money, hawala etc.
• Ease of doing transactions, without carrying solid cash.
• No worries about storing or saving cash (and protecting it).
• Mote tax money for the Govt.
• Curb illegal activities.
• Lesser threats from counterfeit currency.

Disadvantages of a cashless economy

• Cyber attacks and intrusions may result in less safety for your money.
• Difficulty implementing initially (adaptation by masses might take time).
• Change in people’s mindset, as a new idea like going cashless might result in initial resistance.

All in all, advantages of a cashless economy are more than disadvantages. But what does this all mean to you? How can you prepare for it?

How to support and prepare yourself for a cashless economy?

1. Use more cheques and bank transfers for money transactions.
2. Use more debit cards and credit cards for transactions. (Using credit cards has more benefits)
3. Use mobile wallet apps like PayTM.
4. Store less or no hard cash with you. Save them to banks.
5. If you don’t have bank accounts, use programs like Jan Dhan Yojna to get a zero balance account.
6. Do money transfers with mobile apps like these.

So, there it is. I completely support a cashless economy in India. I think it’s one of the major steps that will make India progress towards a better economy. But it’s going to be tough. Educating people (especially the ones in the less income sections) is going to be tough, as this is a sea change in how money transactions have been done since Independence. But, like the PM said, we the young can help educate them and be the part of revolution, towards a better India.

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