Cashless society
Also called: Cashless economy · Topic: Payment Systems and Digital Finance · NCERT: Class 12, Ch 3 "Money and Banking"
Meaning
A cashless society is one where payments happen through "the transfer of digital information (usually an electronic representation of money)" instead of physical notes and coins (Class 12 NCERT). Moving payments into the formal system helps with tax collection and makes money easier to trace. India's realistic goal is a "less-cash" economy, not zero cash.
Several limits stand in the way:
- the digital divide, since rural people, the elderly and women have less access to phones and digital skills
- weak connectivity
- costs for merchants
- privacy worries
- system outages
Example
Currency in circulation fell from ₹16,63,463 crore in 2015-16 to ₹13,35,266 crore in 2016-17 because of demonetisation. It then rose to ₹37,24,448 crore in 2024-25. Cash and digital payments grew together. This is called the "cash paradox".
Don't confuse with
- Less-cash economy: in a less-cash economy, cash is still used, but digital payments carry most transactions. In a fully cashless society, notes and coins are not used for transactions at all.