In order to promote electronic payments, the government is thinking of imposing a ban on cash transactions beyond certain limits at retail outlets and food retail outlets/restaurants from 1st July 2023. However, the question remains whether it is practically possible or not.
Banning Cash Transactions Beyond Certain Limits to Bring Transparency
The government’s idea to limit cash usage and promote electronic payments is a well-devised plan, as it will bring transparency and accountability to the retail sector. It will also push retailers to adopt electronic payment systems; they will need Point of Sale (POS) machines that accept non-cash transactions. In this aspect, the government should provide them with incentives for smooth transactions.
As per sources, cash transactions beyond a certain limit, for example, Rs 10,000 and Rs. 5,000, should not be allowed at retail outlets and restaurants. Instead, the retailers will use non-cash payment methods such as debit/credit cards and mobile payments to encourage electronic payment and reduce the use of cash as the world moves to a cashless economy.
Shift to Cashless Economy
Several factors drive the shift towards a cashless economy and have both advantages and challenges. One of the key benefits is the convenience it offers individuals and businesses. Electronic transactions are faster, more efficient, and often more secure than handling physical cash. They eliminate the need for carrying bulky wallets or counting and storing large amounts of cash. Additionally, digital payments can be made anytime, anywhere, providing greater flexibility and accessibility. Furthermore, a cashless economy can foster financial inclusion by providing previously unbanked populations access to banking and financial services. Mobile banking and digital payment solutions can potentially reach remote areas and underserved communities, allowing them to participate in the formal economy.
Also read: Upaisa launches mobile application aimed at simplifying cashless transactions