Free Press Journal

E-money: Blessing in disguise for the cashless

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Prime Minister Narendra Modi’s pitch for a less-cash economy with the ultimate goal of  a ‘cashless’ economy is a pragmatic approach in these post-demonetisation times when cash withdrawals from banks are proving to be an ordeal. It is also in keeping with the times in the western world where cash substitutes like credit/debit cards and digital wallets are fast replacing cash transactions.

The adage ‘necessity is the mother of invention’ is an appropriate description of the need of the hour especially in India’s case. But the Prime Minister hit the nail on the head when he said in his recent ‘Mann ki Baat’ that the switch to cards and e-wallets will make transactions cheaper and easier and in the long-term it will help India “leapfrog into a less cash-use economy at par with more developed nations.” So it is a question of making a virtue of necessity.

Some key advantages of e-money are worth pondering about. Money transfer between virtual accounts usually takes a few minutes, while a wire transfer or a postal one may take several days. Also, one need not waste time waiting in lines at a bank or post office. Even if someone is eager to bring his disbursements under control, it is necessary to be patient enough to write down all the petty expenses, which often takes a large part of the total amount of disbursements.


The virtual account contains the history of all transactions indicating the store and the amount you spent. And one can check it anytime one wants. This advantage of electronic payment system is pretty important in this case. One can lose one’s physical wallet but in cyberspace there are ways to make the e-wallet secure. The electronic system is also user-friendly. Besides, all the transfers can be performed at any time, anywhere. It’s enough to have an access to the Internet.

The prime motivation for demonetisation was the proliferation of black money, the growing counterfeiting of currency and the diversion of mostly fake money to finance terror activities. Greater reliance on e-money would cut down on all these though there would be need to block leakages of e-money too. The flip side is that the high interest rates and annual fees associated with credit/debit cards often outweigh the benefits received.

But on balance there is more merit than demerit in taking the digital path. The Prime Minister was right in identifying the youth as the agents of change. By motivating and inspiring them, he has unleashed new opportunities and kindled new hopes of better times.