CASE CRITIQUE’19

CASE SOLUTION

INTRODUCTION
With the advent of modern technologies especially applications like internet based
interactions and transactions, digitization of the economy is also something that comes into
play. Digitization of the economy can help curb a variety of hurdles towards greater fluidity
and help us into creating a more inclusive financial system of transactions with an even
greater penetration than ever.
Before we proceed any further, answering the first question raised in the case study would as
well help build a narrative as to why a cashless economy, that is yes the government should
take steps to digitize money and hence the economy in a country with similar demographics
as India’s.

To come to a substantial conclusion to the provided case study the method of operation
would be an evaluative MOST ANALYSIS ( Mission, Objectives, Strategy, Tactics).

Mission
Creation of a cashless economy
Digitization of transactions
Objectives
Curb psychological fear of those who lack
technological awareness
Sensitization of digital modes of transactions
Adoption of digital money in rural areas

M.O.S.T
Tactics
Strategies
mPOS adoption Creating awreness about digital means
preferential VAT & rewards Decentralised virtual banks (payments bank)
basic cellphone based transactions Equitable ceiling on cash transactions to curb
grey economisation
Challenges to Digitization of Money
• Psychological challenges , when customers are not familiar with electronic
environment and afraid of using it. These negatively affect acceptance and
development of e-banking. These challenges include the hesitation of conservative
customers and their frustration due to lack of technical knowledge.
• Lack of digital infrastructure - inefficient banking systems, poor digital infrastructure, poor
Internet connectivity- is a major hurdle in setting up a cashless economy.
• Financial inclusion: Only 60% of the country’s population has bank accounts, which clearly
indicates that financial literacy is another big challenge faced by India in adopting digital
currency system.
• Privacy and security: The presence of frauds and thefts, hackers and flaws in the system,
like viruses, can affect the use of the 'safe' and 'secure' system

SOLUTIONS
• Adoption of new digital methods is obviously to create a fear in minds of those who
lack in technological and especially internet awareness, hence awareness camps in
rural areas and education for both the upcoming generations and the adults can be
carried through mass media, demonstartions at schools and workshops by the
government. Moreover, decentralised government volunteers can be stationed at
rural settings and can help connect the people to new technologies through virtual
payment banks and utilize the facility of for example in India of Aadhar card, which
is then secured using their biometrics and hence easy to use.
• The best working example can be drawn through post offices which do already act
as banks in India hence no additional infrastructure to be built whereas poor
banking frameworks can be tackled through introduction of payments banks which
are necessarily consumer joints for example: local confectionary etc. hence
eliminating the need for long standing, and hassle ridden banking processes at all, as
they do not have to wait in queues, or fill forms as transactions happen right in front
of them. And the lack of internet can be tackled by using the BHIM payment
framework developed by Government of India which can even use a basic cellphone
to make transactions with use of Aadhar which curbs the necessary requirement of
internet connection.
• Preferential VAT and loyalty programs can help foster a heathy inclusion of the
masses into the digital framework whereas introduction of an equitable ceiling on
cash transactions as taken from Netherlands can help achieve the goal of more and
more digital inclusion and also curb grey economization of money as it curbs black
money circulation in economy and money laundering.
• Using systems like Aadhar which already work on biometric recognition can help
eliminate risk of hacking whereas workshops and awareness campaigns can help
sensitizing the people towards effective and safe use of digital mode of transactions.
CONCLUSIONS
How can digital mode of transaction help us?
An mPOS or mobile POS is a portable point of sale on a smartphone or tablet that functions
as a register. A mobile POS system is an ideal way for businesses such as food trucks,
home and repair services, market vendors, etc. to take credit card payments on the go.
Digital transactions have the potential to curb economic crimes as money trails in economy
can help curb such offences.
Makes our economy free from paper currency, hence greener.