Advantages of Cashless Payments

As the country moves towards a cashless environment after demonetization, the initial awe and confusion have given way to a flurry of concerns. To incentivize the move towards a cashless economy, the government has come up with a rash of discounts and freebies on digital transactions. There are certain advantages of Cashless Payments.

Convenience – The ease of conducting financial transactions is probably the biggest motivator to go digital. You will no longer need to carry wads of cash, plastic cards, or even queue up to ATM withdrawals. It’s also a safer and easier spending option when you are travelling. It will be especially useful in case of emergencies. One have the freedom of transact whenever and wherever one want.

Discounts – The recent waiver of service tax on card transactions up to Rs 2,000 is one of the incentives provided by the government to promote digital transactions. This has been followed by a series of cuts and freebies. It’s a good time to increase your savings if you take advantage of these. For instance, 0.75% discount on digital purchase of fuel means that the petrol price in Delhi at Rs 63.47/l can be brought down to Rs 62.99/l with digital payment.

Similarly, saving on rail tickets, highway toll or purchase of insurance can help cut your costs. Add to these the cashback offers and discounts offered by mobile wallets like Paytm, as well as the Reward points and loyalty benefits on existing credit and store cards, and it could help improve your cash flow marginally.

Tracking Spends – If all transactions are on record, it will be very easy for people to keep track of their spending. It will also help while filing income tax returns and in case of a scrutiny, people will find it easy to explain their spends. Besides the tax, it will have a good impact on budgeting.

Budget Discipline – Various apps and tools will help people analyze their spending patterns and throw up good insights over a couple of years. Controlled spending could also result in higher investing. If the same amount of cash does not flow back into circulation and people continue to use mobile wallets and cards, it is likely to bring down the latte factor. There is a lesser chance of budgetary leaks and unaccounted for spends sneaking into your budget at the end of the month.

Lower Risk – If stolen, it is easy to block a credit card or mobile wallet remotely, but it is impossible to get your cash back. This is especially true while travelling, especially abroad, where loss of cash can cause great inconvenience. Besides, the futuristic cards evolve to use Biometric ID, it can be extremely difficult to copy, making it a very safe option.

Small Gains – It may not seem like much of an advantage, but being cashless makes it easy to ward off borrowers. Another plus is that you can pay the exact amount without worrying about not having change or getting it back from shopkeepers.