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Last Sunday Prime Minister in the radio programme ‘Mann ki Baat’, while addressing the country said, he wants the country to have less cash transactions, which will eventually make India a cashless economy altogether. No wonder, he won round of applause from the people. The basic aim of this, he said, is to curb black money and make sure each and everyone in the country pays tax to the government. 
 
There is no doubt about <a href="http://www.businessinsider.in/searchresult.cms?query=cashless&amp;sortorder=score">Modi’s goodwill</a>. However, before we start paying autowallahs and vegetable sellers in the neighbourhood through mobile app, let’s have a look at how the world’s first cashless economy in Sweden is doing. 
 
To believe media reports, Sweden is shaping up to be the first country in the world to plunge its citizens into a fascinating - and terrifying - economic experiment – a <a href="http://www.businessinsider.in/searchresult.cms?query=cashless&amp;sortorder=score">cashless</a> society. 
 
Sweden started the journey towards cashless economy since many years. Take a bus ride, buy a magazine or a chewing gum, digital payments are accepted everywhere. 
 
This is the country where, if you use too much cash, banks call the police because they think you might be a terrorist or a criminal. Swedish banks have started removing cash ATM machines from rural areas, annoying old people and farmers. There is a belief in the country that if you have to pay in cash, something is wrong. 
 
That sounds quite futuristic until you know the truth. The Interest Rate at Sveriges Riksbank, the central bank in Sweden is -0.500% since last February. 
 
Although retail banks are yet to pass on that negative to rate to Swedish consumers, the longer it's held there the more financial pressure there is for banks to pass the costs onto their customers. 
 
So here lies the danger. The commoners have to keep the money in bank and pay for it. They cannot withdraw cash and cash transactions are refused by retail stores legally. The senior citizens are the worst affected as they lack concentration to focus on mobile banking. 
 
It’s a fact that Swedish can’t hide their money. But citizens need to pay banks charges for keeping their money and that’s the way of survival. 
As per a Quartz report, surveys conducted by <a href="http://www.businessinsider.in/searchresult.cms?query=cashless&amp;sortorder=score">Riksbank </a>show that for transactions fewer than 100 kronor (approx. Rs 750), 41% of people still prefer to use cash. And the Swedish National Pensioners’ Organization, which represents some 400,000 of the country’s elderly, says 7% of its members never use bank cards. 
 
Now think of this situation in India. There are some millions of widows, unemployed and retired employees who thrive on bank interests for survival. After demonetization, we have seen interest rates of nationalized banks slumping down to 4%-5%, which is 3% below normal rates. Most people in the service sector has only one way to save their money – either through fixed deposits or several schemes, which gives a good percentage of annual increment. 
 
And what are the obstacles that can happen in a cashless society? There may be a rise in fraud rates, people’s discomfort about electronic footprints in <a href="http://www.businessinsider.in/searchresult.cms?query=cashless&amp;sortorder=score">semi urban and rural stores</a>. Another industry that would be badly hit by cashless economy is tourism, the proof of which has already begun to show in Sweden. A news report by The Guardian says that a grand music festival in Sweden sparked chaos after their payment system broke down. 
 
India heading towards a cashless economy is a great thing! But can the Indian middle class handle it?

Sweden is the world’s
first cashless economy and has negative bank interest rates. Can Indian middle
class handle it?

After a country wide protest against demonetization across most states by various opposition parties, centre is reaching out to states by forming a committee of chief ministers with a mandate to suggest ways to make India a cashless economy. 
 <keyword id="6355261" type="POSITION" weightage="20" keywordseo="Finance-minister">Finance Minister</keyword> <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> has spoken to <keyword id="37102" type="COMPANY" weightage="20" keywordseo="Andhra-Pradesh">Andhra Pradesh</keyword> Chief Minister N Chandrababu Naidu to head the chief ministers' panel, for which Bihar Chief Minister Nitish Kumar and Odisha Chief Minister Naveen Patnaik are also being co¬opted. 
 
Sources told PTI that Jaitley had spoken to all the three chief ministers. Incidentally, the three were among the first to back Prime Minister Narendra Modi's announcement of junking old Rs 500 and Rs 1,000 notes. The panel is to review the ground-level situation following the decision to demonetise highvalue currency and suggest possible ways to ease hardships and inconvenience. 
 
Besides assessing the public impact, it is also to come up with a road map towards a cashless economy. 
 Madhya Pradesh Chief Minister Shivraj Singh Chouhan would also be part of the committee. However, there is no decision on who will be picked from <keyword id="1575" type="ORGANIZATION" weightage="20" keywordseo="Congress">Congress</keyword> and Left¬ruled states. 
 
The sources said names of chief ministers of Puducherry and Himachal Pradesh, V Narayanasamy and Harish Rawat, respectively, have been mooted from among the Congress fold. 
 
The final call on the issue will have to be taken by the party, they said, adding that Tripura Chief Minister Manik Sarkar is also believed to be in the reckoning from among Left states.

After blatant political opposition to demonetisation, centre finally reaching out to states

In a bid to keep the momentum gained for <keyword id="6369124" type="UNKNOWN" weightage="100" keywordseo="cashless-economy">cashless economy</keyword> due to <a href="http://www.businessinsider.in/searchresult.cms?query=demonetisation&amp;sortorder=effectivedate">demonetisation</a>, the government might announce big disincentives in the upcoming Budget for usage of cash. 
 
Reportedly, the <a href="http://www.businessinsider.in/searchresult.cms?query=upcoming+budget&amp;sortorder=effectivedate">upcoming budget</a> could come up with a series of such big disincentives. The government may reduce threshold for quoting <keyword id="74488" type="ORGANIZATION" weightage="100" keywordseo="PAN-card">PAN card</keyword> for <keyword id="1173498" type="UNKNOWN" weightage="100" keywordseo="cash-transactions">cash transactions</keyword>, say sources. 
 
The limit, which at present is is Rs 50,000 now, may be brought down to Rs 30,000 to bring more transactions within formal economy. As per the sources, the threshold for quoting <a href="http://www.businessinsider.in/searchresult.cms?query=PAN+Card&amp;sortorder=effectivedate">PAN Card</a> details for merchant transactions can also be reduced. 
 
This comes as an move by the government to tighten the noose around people who deal in large cash transactions. 
 
In fact, the threshold for quoting PAN Card details for merchant transactions could also be brought down from current Rs 2 lakh. With Aadhaar now having the government's legal backing, the usage for Aadhar card may also be made mandatory as an alternative for people not having PAN card. 
 
In addition to these steps, the government may also announce cash-handling charges for cash payments above a certain limit. 
 
Reportedly, a levy could be in the works for cash transactions over Rs 1 lakh. 
 
"The scale of the implicit cost of transacting in cash is not fully understood. We are of the opinion that licencing authorities including government agencies should levy a cash handling charge for payments in cash above a certain threshold. The cash handling charge so collected should be exclusively used to fund new infrastructure for accpeting digital payments (like POS devices)," a source told ET. . 
 The move is aimed at moving from a less-cash to a cashless society post the <keyword id="3315394" type="UNKNOWN" weightage="100" keywordseo="demonetisation">demonetisation</keyword> drive that was brought into effect by PM Modi on November 8. 
 
These measures will help the government stay on track towards a less-cash economy as there are concerns that easing of cash-withdrawal limits at banks and ATMs might take the economy back to pre-demonetisation prevalence of cash.

You may need to show PAN card for small transactions too. Here are the details

With India moving towards becoming a cashless economy, there are a lot of expectations from the digital payments industry. As the agenda of the digital economy takes center stage, the <keyword id="6354477" type="PERSON" weightage="20" keywordseo="Narendra-Modi">Narendra Modi</keyword> government has already taken a number of steps to encourage electronic payments. 
 
<a href="http://www.businessinsider.in/the-jaipur-lit-fest-tried-to-be-cashless-and-failed/articleshow/56738111.cms">ALSO READ: The Jaipur Lit Fest tried to be completely cashless and failed. Here's what happened.</a> 
 Even as Finance Minister <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> announced a slew of measures as incentives for digital payments, which are guaranteed to benefit the e-commerce industry as a whole, startups like Mobikwik, CashKaro and <keyword id="2777173" type="UNKNOWN" weightage="20" keywordseo="Razorpay">Razorpay</keyword> have pinned a lot of hopes on the upcoming Budget. Here’s what they are expecting from the government:

Budget 2017: Expectations of Fintech
Startups from Modi Government

In a bid to promote <a href="http://www.businessinsider.in/searchresult.cms?query=cashless+economy&amp;sortorder=effectivedate">cashless economy</a>, the Indian government is now considering a 'cash tax'. If the proposal is cleared, it may figure in the February 1 Budget. 
 
Currently, the government is looking at the pros and cons of the proposal, which could be a tweaked form of the earlier banking cash transaction tax under the <a href="http://www.businessinsider.in/searchresult.cms?query=United+Progressive+Alliance+government&amp;sortorder=effectivedate">United Progressive Alliance government</a>, under which tax will be levied on cash withdrawals above a certain ceiling from bank accounts. 
 
"A number of steps are under discussion," a government official familiar with deliberations on this matter told ET. 
 
The new tax is being looked after so as to to shrink the scope of cash economy and encourage digital transactions. The government has taken a series of measures since <a href="http://www.businessinsider.in/searchresult.cms?query=demonetisation&amp;sortorder=effectivedate">demonetisation</a> in November last year to incentivise <a href="http://www.businessinsider.in/searchresult.cms?query=digital+transactions&amp;sortorder=effectivedate">digital transactions</a>. 
 
The final call will be taken "at the highest political level", one official told ET. 
 
"The idea is under consideration and there is good chance it could be announced in the budget," another official told ET. 
 
Digital payments transactions in December last year were 43% higher than in November last year and totaled 958 million, according to central bank data. 
 Government strategists on post <keyword id="3315394" type="UNKNOWN" weightage="20" keywordseo="demonetisation">demonetisation</keyword> policies have been emphasising that saving on costs of currency operations is an economic plus, apart from the transparency benefits of digital transactions.

Get ready for ‘cash tax’. Here’s what it is

At a time when Modi government’s key agenda is building a <keyword id="6369124" type="UNKNOWN" weightage="20" keywordseo="cashless-economy">cashless economy</keyword>, especially after <keyword id="3315394" type="UNKNOWN" weightage="20" keywordseo="demonetisation">demonetisation</keyword>, Finance minister <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword>'s announcements outlining a roadmap for cashless payments came as a relief to many Indians. 
 
Here are the highlights of his speech: 
 
- Insurance bought online from customer portal of public sector companies will get 8% discount for life &amp; 10% for general insurance. - Around 4.5 crore consumers purchase fuel every day. For those using cards and <keyword id="6388138" type="UNKNOWN" weightage="20" keywordseo="E-wallets">e-wallets</keyword>, Petrol and Diesel purchases will now attract a 0.75% discount. 
- The government will provide 2 POS or Point of Sale machines for free to each village that has a population of over 8,000. Around 75 crore people will get access to these machines. 
- Monthly and seasonal tickets for suburban train passengers who pay digitally for their tickets will get a 0.5% discount. This discount will be applicable from January 1, 2017. 
-Railways to also give 5% discount on accommodation, catering and retiring room on payment by digital mode. 
- Railways passengers who purchase tickets online will be entitled to an insurance coverage of Rs 10 Lakhs for free. 
-Digital transactions up to Rs 2,000 will be exempted from service tax 
- Highway toll will see 10% discount on digital payments - NABARD will give Rupay card to people who have <keyword id="6362618" type="UNKNOWN" weightage="20" keywordseo="Kisan-Credit-Card">Kisan Credit Card</keyword> 
 
The government clearly is encouraging alternate forms of payment. It aims to push and implement the use of credit cards, debit cards, mobile wallets, and online banking. 
 
All decisions were declared to be implemented with immediate effect.

Cheaper fuel, discounted train tickets: Key benefits by Modi government if you pay online or use e-wallets

In a bid to promote cashless economy and digital transactions, the government is going to waive off service tax on debit and credit card transactions of up to Rs 2,000. 
 Presently, 15% tax is levied on these transactions. India is facing cash crunch since <keyword id="3315394" type="UNKNOWN" weightage="20" keywordseo="demonetisation">demonetisation</keyword> was announced since Nov 8 as people are lining up outside banks and ATMs to withdraw new currency notes. 
 
A notification to this effect will be tabled by Finance Minister Arun Jaitley in Parliament. 
 
Recently, the government asked banks to install additional 10 lakh PoS terminals by March 31 in different parts of the country. 
 
The service tax notification of June 2012 will be amended to include exemption on credit and debit cards, the sources added. 
 
As of now, services provided by organisations such as United Nations and other international bodies are exempt from tax. 
 
A range of other services provided by arbitral tribunals, testing of newly developed drugs, educational institutions, trade unions, general insurance business and sports bodies, among others, too are exempt from the levy.

You won’t have to pay service tax on debit/credit card
transactions of up to Rs 2,000

<ul><li>Point-of-Sale startup <keyword id="1745661" type="PERSON" weightage="20" keywordseo="Mswipe">Mswipe</keyword> has raised $30 million and now plans to acquire 1.5 million merchants by 2020. </li><li>The Indian PoS market has been fast-growing with even the likes of Amazon, Google expanding to offline markets. </li><li>The focus now is on building technology-driven devices or apps that will make way for <keyword id="7488649" type="UNKNOWN" weightage="20" keywordseo="smart-billing">smart billing</keyword> systems.</li><li><keyword id="1034238" type="COMPANY" weightage="20" keywordseo="Poynt">Poynt</keyword>, a smart terminal which has been founded by the creator of Google Wallet <keyword id="225346" type="PERSON" weightage="20" keywordseo="Osama-Bedier">Osama Bedier</keyword>, too is looking to enter India.</li></ul>The Indian government has set ambitious goals for the country to become a cashless economy. And pushing forward this digitisation are point-of-sale terminals or portable billing machines. Now, PoS startup Mswipe, has raised $30 million in a series E round with plans to sign up 1.5 million merchants by FY 2020. Mumbai-based Mswipe, which raked in ₹1.42 billion in revenue post demonetisation in the year 2016-17, has been possibly one of the biggest beneficiaries of the note ban apart from Paytm. The cost of a Mswipe machine starts at ₹1,500. The 7-year-old startup also appears to be gearing up for competition. Be it the Indian competitor Payswifff or US-based Poynt. Poynt – a smart terminal which is the brainchild of Osama Bedier, the creator of Google Wallet – is also looking at India as an ideal market. Poynt, as Bedier likes to call as the ‘Android’ for digital payments. But the focus now has to be on technology. Mswipe is developing its technology with the introduction of WisePoS, a smart billing machine that will enable retailers to run multiple applications on them including billing, inventory management and supply chain along with integrated payments. It is also currently piloting the MoneyStore, an app store for payment productivity apps. “Tech powered products will add significant value to merchants including an app-based ecosystem to help our merchant partners beyond payments. We are big believers in offering merchants access to a merchant-friendly cost-effective open ecosystem,” said <keyword id="182064" type="PERSON" weightage="20" keywordseo="Manish-Patel">Manish Patel</keyword>, founder and CEO, Mswipe. Meanwhile, Poynt offers an open operating system that can power any smart payment terminal worldwide. “300 million smart payment devices will exist in the next five years. 50 million of those will be in India. These devices will be responsible for at least half of the world’s commerce. If these devices are changed to computing devices, the software that runs on those that will be a trillion dollar business. In an app store model, where you take 10 or 20% just to distribute that, that itself is a $200 billion business,” Bedier told Business Insider in <a href="https://www.businessinsider.in/google-wallet-creator-osama-bediers-startup-poynt-will-launch-in-india-in-2019/articleshow/68145220.cms">an earlier interview</a>. This market opportunity is not missed by the big players – Amazon, Google – who are all rushing to have a pie of the offline payments market. It’s India’s bullish move to be a cashless economy that has empowered the presence of these PoS terminals. According to RBI report from January 2019, PoS terminals from banks alone go up to over 36 lakhs in India. See Also: <a href="https://www.businessinsider.in/google-wallet-creator-osama-bediers-startup-poynt-will-launch-in-india-in-2019/articleshow/68145220.cms">The creator of Google Wallet is making a big bet on India via his 4-year old startup</a>

You Searched For "cashless economy" and got 8 results

Sweden is the world’s first cashless economy and has negative bank interest rates. Can Indian middle class handle it?

Suchayan Mandal

After blatant political opposition to demonetisation, centre finally reaching out to states

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You may need to show PAN card for small transactions too. Here are the details

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Budget 2017: Expectations of Fintech Startups from Modi Government

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Get ready for ‘cash tax’. Here’s what it is

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Cheaper fuel, discounted train tickets: Key benefits by Modi government if you pay online or use e-wallets

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You won’t have to pay service tax on debit/credit card transactions of up to Rs 2,000

BI India Bureau

A lot of money is flowing into making 'smart' billing machines in India

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