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'It is money that makes the world go around,' so the saying goes, and it is valid to some extent; it is very little you can get done without the exchange of money these days. Over the years, how people pay for goods and services has changed. There are many forms of making payments that don't require physical money. For the most part, one can buy, sell and transact without ever holding a Euro or Pound or Rupee in their hand. From card payments to services like google pay, we now have the convenience of not carrying cash or coins.
Upon closer inspection, specific industries would not exist if there were no cash alternatives; take iGaming. For instance, online bets are made via online payments; this wouldn't be possible if the technology did not exist. To deposit with Astropay Card in 10CRIC takes less than 10 minutes and all it requires is your phone, simple, right? We sometimes take these things for granted, because this was not always the case.
Nobody can pinpoint the exact time of the invention of money; some scientists and economists speculate that around 5 000 B.C money had begun to exist.
Before that, the world operated on a barter system where livestock or fresh produce was exchanged. If one needed potatoes but had chickens, they would exchange a chicken for a bag of potatoes.
Over time though, bartering was not possible because of the supply and demand issue, therein came commodity money. This was the exchange of essential items that everyone needed and used, such as tea, salt, cattle, and seeds.
Once commodities exchange became too cumbersome because of storage or transport issues, people forged money from precious metals such as gold and silver. This made it more accessible as there was now a set value to transact with.
Eventually, around the 1800s, paper money was made and legalized in the early 1900s.
As countries worldwide push for digital transactions and cashless payments, India joins in the massive cashless exodus.
In 2016 started to demonetize its currency by removing from circulation the Rs 500 and Rs 1000 notes; according to the Prime Minister, then the aim was to curb the impact of black money and help push India towards being a cashless economy.
Though the motive may have been good, what the politicians forgot to look at was the country's informal sector, which made up 93% of the labor force. The push to cashlessness or digital money would not benefit the poor.
As with most developing economies, those living below the poverty line still operated in cash and bypassed the banking system entirely, and to expect them to go digital and cashless and they did not even own a cellphone would be unfair.
A simple example would be the recycling industry, where collectors collect garbage and dump it at their homes for sorting, from paper and glass to hair used for wigs or stale bread to make animal feed. Once sorted, they would bag it, and it would be weighed by the buyers, who would then calculate the value of the items and pay the collectors in cash. The buyers would then do the same thing when selling to the processing plants.
In theory, a cashless society is safer from robberies, and even if your cards and phone were stolen, there are biometric verifications and other safety measures in place to protect your money.
When more people pay by card or phone, retailers have less cash to bank and even less to keep on their premises. It is also convenient for their customers to have various ways to pay for items.
Digital payments and other forms of cashless payments also assist in the decrease of black money in circulation.
This is the most convenient way of transacting, whether in-store or online. Certain online stores in India offer customers discounts if they pay with a credit or debit card. As of 2017, the percentage of people over 15 years with either a credit or debit card was sitting at 32.72%. In 2020 there were over 860 million active debit cards in the country, with just over 60 million credit cards.
Payments through PayPal offer convenience and flexibility. In April, however, Paypal announced it would no longer facilitate domestic payments in the country. Despite this, Paypal remains a popular form of payment, especially among businesses that trade internationally.
Paytm is a mobile-based wallet payment method with an account linked to the user's app. You can shop through it, pay utility bills and send money. It supports over 70 foreign currencies it has zero transaction fees for start-up businesses.
This payment method allows businesses and individuals to send and receive money across India. Even unregistered businesses can make and request payments. There is an invoice generator on the app, and customer support is available 24/7.
On this app, you generate a payment link using cash gram, businesses send links to their customers for payment, and the customer clicks the link to make payments. Some of its features include instant refunds, bulk payments, and recurring payments
This is a user-friendly and flexible app loved in India, especially for young people. Its mainly used to make online payments for videos and music. It allows businesses to receive payments from customers on social media platforms like Instagram, Facebook, and Whatsapp.
Other payment methods like Apple Pay, Google Pay, and Samsung Pay are used and accepted in all significant franchise and retail stores. There are some limitations, some regions don't have the functionality, and some customers don't own suitable mobile devices.
People distrust digital payment methods mainly because of the surge in online scams, identity theft, and cybercrimes.
The future is cashless and certainly more digital; the best we can do is arm ourselves with knowledge and always act with caution.
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Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.
