How Does Cashless Payment Influence Consumer Spending Behaviour

Abstract

India, like many societies, recognizes the need to move away from cash-based transactions. The decision to prioritize this transition nationally is driven by complex factors, including the challenges associated with cash circulation such as tracing difficulties, inconvenience, high printing costs, and the need for frequent currency replacements. These challenges are more pronounced in India compared to other countries. The transition aims to eliminate frictions by removing intermediaries, directly transferring benefits to beneficiaries, ensuring universal banking access, and reducing corruption. A comprehensive plan has been developed to propel India's 1.3 billion population towards a "paperless," "people-less," "frictionless," and "cashless" banking environment. The positive response from the Indian populace indicates potential success for the initiative. A cashless economy is expected to boost GDP through e-commerce and digital payments, enhancing economic openness and credibility, attracting more investments. This move aligns with Prime Minister Modi's vision of Digital India and promises significant success in the future.