The Cashless Economy in India: Prospects and Challenges

Abstract In India as it is in many developing countries, cash is the main mode of payment. This makes the country to be heavily cash based economy. However, the cost of cash to Indian financial system is high and increasing. It is in this regard that the Digital India program introduced by the Government of India with the objective of promoting the use of electronic payment channels instead of cash. This study seeks to point out the prospects and challenges of such program, in a developing economy like India. The study presented useful recommendations for policy makers. In conclusion, the study assumes that the move towards a cashless India brings with it many benefits but there is still the need to create more awareness to attract the many Indians into the cashless transactions.