Cashless economy refers to that economic condition in which the financial transactions are conducted on various digital platforms between two or more transacting parties. With the arrival of electronic banks in 1990, the cashless economy came into existence. Cashless economy helps to pump up the inflation and render the hoarding of the illegal cash. It enables an increase in the expenditure of the consumer and also gets a curb over the black money circulation.
Cashless economy in different countries
With the arrival of the internet, digitization has brought a revolutionary change in the lifestyle of 21st century people. But what has been affected the most is the economic system. With the arrival of electronic banks people started using online payment methods. And now, after nearly two decades, many of the western and Nordic countries like the U.S., France, Switzerland, and Denmark are on the verge of adopting an entire cashless economic system. But again when it comes to underdeveloped countries the idea of a cashless economy is a little bit different. But even if all the underdeveloped nations have not been completely accepting of the cashless economic system so far there is still a difference among these underdeveloped nation on the basis of the extent to which they have adopted the cashless economy system.
Scenario of cashless economy in the underdeveloped countries
Today there are so many nations that fall into the category of underdeveloped, the majority of them belonging to the African continent. Some are less underdeveloped while some are more underdeveloped. There are many reasons why these countries are still underdeveloped, but the main reason is that they have been subject to corruption, terrorism, economic instability, and low growth rate. As a result they have not been able to improve much even in the current time. Since their economy is still unstable, the idea of them adopting a cashless economy is almost absurd.
Are the underdeveloped nations ready for cashless economy?
The fact that cashless economies are ruling the developed nations is because of their advancement in technology and the companies that are investing in it. An example is Uber which has not only brought advancement in the travel sector but is also known as one of the pioneers of the cashless economy. Then several companies like PayPal and other national and international companies have pushed the digital wallet system. But in the present scenario none of these companies are ready to invest in underdeveloped countries due to their poor financial background and political instability. Once these countries are able to overcome these barriers they automatically become eligible to introduce the cashless economy in their countries.
So as far as the cashless economy is concerned, it is a very good concept which is spreading all over the world. It not only helps in fighting corruption but also helps to enhance the development of a nation. But as far as the underdeveloped countries are considered they still need to work on a balanced economic infrastructure, education, and other basic factors. Once they start making changes to these they will surely be ready to accept the cashless economy and use it in their daily life.