cashless economy

Cashless Economy Sovin K Thomas

Black money • People intentionally do transaction in cash to save income tax.• All illegal activates like money laundering, kidnapping, Bribe to

government officers, terrorist activities consummate in cash payments.

• Indian companies are reportedly misusing NGO and public trust for money laundering.

• Generally people convert their black money into Gold and real estate.• Still 8% of total black money is in cash.• Recent demonetization will help to reduce black money which is in a

cash form.

Payment: The transfer of money from one individual or legal entity to another

Cash Personal Cheques Money orders (Bank note)

Traditional Payment Methods

2001 4

Selection of Payment Method Based on:

Convenience Trace-ability Repudiation Financial risk Fraud protection

What is a Cashless Society?• No paper money or coins• Everything is electronic• Payment via E-wallets• EFT- Electronic Funds Transfer• EPS – Electronic Payment System• Microchips/Smart Cards

Impacts of a Cashless Society Transition process Education process Economic implications Universal acceptance What’s next?

Security Benefits Electronic means of recognition Verification records of all transactions Computer errors are far less common than human

errors

Security Risks Misuse of technology Potential for a new crime frontier Less regulation and scrutiny

Cashless Controversies Much less privacy Wasteful spending People taking on more debt Bad for those who are reliant on cash

Various E-Payment Methods Credit and Debit card Digital Currency E-Wallets Peer-to-Peer Methods Smart card Micro-payments B2B

•

2001

Credit/Debit Card The most popular payment method Cards are issued by a bank Unique 16-digit number (including check digits) and an

expiration date Third party authorization companies verify purchases•

2001

E-Wallets Established by financial institutions in partnership with member E-

Commerce sites Allows customer to submit billing and shipping info with one click at

member sites Also can store e-Cheques, e-Cash and credit card information Not as popular as originally projected Entrypoint’s InfoGate offers an e-wallet

2001

THANK YOU

Sovin K Thomas