Cashless Society – Group Discussion (GD), Essay Notes, Pros & Cons

By BYJU'S Exam Prep

Updated on: September 25th, 2023

In a Cashless Society, financial transactions are carried out using digital information rather than actual banknotes or coins (usually an electronic representation of money). Cashless societies, based on barter and other forms of exchange, have existed since the dawn of human civilization. In the current day, cashless transactions are now feasible because of the use of credit cards, debit cards, mobile payments, and digital currencies like Bitcoin.

For the GS portion of the several Defence exam, this topic is crucial. For the Cashless Society Group Discussion and Essay notes, this article explores and focuses on the topic in detail.

What is a Cashless Society?

A Cashless Society is one in which all transactions take place electronically through means such as direct debit, credit cards, debit cards, electronic clearing, and payment systems like India’s Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), and Real-Time Gross Settlement (RTGS).

India is the fourth most prominent user of cash in the world. A cashless India will not only curb unaccounted wealth but also be used for tax avoidance instances, increasing the system’s transparency. India will evolve as an improvement in the credit card system and better financial inclusion. Read the entire article to learn more about Cashless Society.

Current Position of Cashless Society

After demonetization, the Indian government made a concerted effort to introduce the paperless economy to the general public through its flagship initiative, Digital India, which is also accurate. A Cashless Society provides choices, including card-based and internet transactions. The real benefit of a Cashless Economy, which will be better understood by the points below, is that it eliminates corruption and counterfeit currency.

  • Cash-centric sectors, like agriculture, real estate, etc., have been affected by demonetization.
  • The government continuously promotes the cashless economy by opening bank accounts and direct credit transfers to banks.
  • According to the World Bank, India’s black money, estimated in 2010, is one-fifth of the GDP, where 90% of the transaction is done in cash.
  • Two hundred fifty million bank account has been opened in 2 years, gradually shifting towards cashless.

Advantages of a Cashless Society

The demonetization era can be linked to the cashless economy, which clarifies the benefits of this procedure. Apart from this, most black money, corruption, and fraud have been successfully stopped with the introduction of digital payment platforms, another incentive to choose cashless transactions. The following list of advantages of a Cashless Society will highlight some of these:

  • The cost associated with accounting and handling cash is high and will reduce when we go cashless.
  • Less cash will decrease crimes like corruption, hawala transaction, theft cases, etc. A Cashless Society will also increase the transparency in the system. The government needs to take measures related to online scams and theft incidents.
  • The production cost of coins and paper will reduce.
  • Cashless transactions are more advantageous when travelling internationally because they simplify foreign transactions.
  • In Cashless Society, the government can use the data from transactions and improve their policies like urban planning, energy management, housing, etc.
  • It will also boost economic growth as spending will be higher than earlier. For example, Singapore witnessed 0.1% growth because of cashless transactions.

Disadvantages of a Cashless Society

Going cashless may be more problematic than helpful, depending on your perspective. If a Cashless Society has some benefits, there are also some disadvantages. The following are some of the disadvantages of a Cashless Society discussed in detail:

  • Cybersecurity is another problem regarding the cashless economy. On October 2016, the details of over 30 lakh credit cards were exposed at ATMs. Just a month later, PM is motivating people to be cashless. Is cybersecurity in place?
  • The sudden surge in card transactions will lead to connectivity issues during the demonetization period. The connectivity issue needs to resolve before dreaming of a cashless society.
  • Internet cost is sustainability high in India, with no Wi-Fi in public places.
  • In a Cashless Society, not having enough bank accounts for every individual is another hurdle.
  • Proper infrastructure needs to be in place. The bank should be fully equipped.
  • Smartphone availability and public infrastructure should support a sustainable mobile society, e.g., public charging points.

What Does a Cashless Society Look Like?

Without cash, transactions occur online, and you authorize a transfer of money from a bank account to a person or company rather than exchanging value through paper money and coins. Although the details are still being worked out, there are some indications of how a Cashless Society might develop.

  • Cards are among the most widely used forms of payment today, yet a Cashless Society may only be supported partially by cards. Alternative payment methods could be made primarily using mobile devices.
  • The topic of cryptocurrency has already come up. Cryptocurrency is utilized for money transfers, fostering innovation and competition that could aid in lowering costs. Cryptocurrencies may still need to be ready for widespread use because of hazards and regulatory obstacles that make them unworkable for most customers.
  • In a Cashless Society, these services offer safe, cashless transactions alongside mobile wallets like Apple Pay. Mobile devices have already replaced traditional payment methods in many countries that use cash infrequently.

Is India Ready for Cashless Economy?

The future of Cashless Society in India depends on execution and preparation. To change behavioural patterns, one must provide smooth, secure, and simple payment processes. The rapid growth of smartphones, e-commerce sites, and card payment options will increase the adoption, innovation, and opportunities for consumer choice. According to Worldline India Card Payment Report, 2014-15, the credit card base grew by 9.8 % in the past year, showing greater consumer acceptance of credit cards.

Card transactions, both by debit card and credit card, are on an upward trajectory. The private sector has to come forward to drive the change. The government should also give some incentives for electronic transactions and try to achieve a less cash-dependent and Cashless Society.

The Cashless Society is a welcome idea, but it will be a good situation with preparation. The government needs to consider some policies, serving banks, more liquidity into the system, and better connectivity, and this should be done to better convenience the public. Candidates can bookmark this page to prepare for Cashless Society Group Discussion and Essay.

Also, check:


Download the BYJU’S Exam Prep App Now

The Most Comprehensive Exam Prep App


Our Apps Playstore
SSC and Bank
Other Exams
GradeStack Learning Pvt. Ltd.Windsor IT Park, Tower - A, 2nd Floor, Sector 125, Noida, Uttar Pradesh 201303
Home Practice Test Series Premium