Wednesday 9 November 2016

How can India go cashless?

For a country to go cashless, there should be one payment method accepted everywhere e.g. Using Google pay or Apple pay in London.
In London, while boarding a train (called tube), the passenger holds his mobile near a wireless device. After getting down at destination, the passenger again hold his mobile near similar device. The charges of the rail travel are automatically deducted form his chosen form of payment i.e. MasterCard, Visa, etc. While boarding a bus in London, the passenger shows his mobile to a wireless device and charges for the travel are automatically deducted. A cup of coffee, purchased at local tea stall, can be paid via mobile. Malls expect payment with mobiles. All cabs (called black taxis) accept payment via mobile.
In India say Mumbai for example, there is one card for electronic payment in buses. There is a separate card for electronic payment while traveling in metro rail. While traveling by regular rail, there is a separate card or mobile app. Auto rickshaws and cabs (yellow taxis) in Mumbai accept only cash.
In India, not only does each city/state have different forms of incompatible electronic payment methods, but multiple electronic payment methods exist within the same city. Also, many agencies accept only cash. So, for convenience, most people just pay by cash throughout India.

If India has to move towards a society with limited cash, then

  • All transports (bus, trains, metros), toll stations, post-offices, petrol stations, etc must accept payment from mobile wallet e.g. Paytm.
  • Since multiple mobile wallets exist in India, they should be inter-operable i.e. one person, using Paytm mobile wallet, can pay to another person, using Airtel Money mobile wallet.
  • There should be no extra charge while using mobile wallet, just like there is no extra charge while using cash.
  • The existing transaction limits for mobile wallet payments should be raised significantly.
  • People should be allowed to charge their mobiles wallets with cash and withdraw cash from their mobile wallets.

India cannot go completely cashless. No corrupt country can go cashless. Bribes are the engine oil that makes the corrupt economies run. Making a corrupt country totally cashless, will cause its economy to come to a stand-still.
Totally cashless society is a dream of governments. It has not yet been achieved anywhere in world. So how can India become totally cashless?


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