Vol. 5, Special Issue 4, Part I (2019)

Abstract
Cashless Economy refers to a situation where there is a negligible flow of cash within an economy, and all transactions are settled digitally. This is achieved through extensive use of digital payment channels such as NEFT (National Electronic Funds Transfer), RTGS (Real Time Gross Settlement), credit and debit cards, digital wallets, IMPS (Immediate Payment Service), etc. Our Indian Economy has mostly been dependent on paper currency since ages. However, the current Indian Government has seriously been trying to make India a cashless economy. Demonetization was a big step in this direction and significantly promoted the use of digital payment channels over the traditional paper currency. After demonetization of Rs. 500 and Rs. 1000 notes by Reserve Bank of India, government has given a boost to Cashless economy. As a result, government is encouraging people to engage in digital transactions for day to day tasks of financial nature. Apart from all the benefits and challenges this paper also highlighted the challenges before the government in the digitalization in cashless economy such as the lack of Internet to all and low Internet literacy or digital literacy is a drawback. Risks of Hacking of accounts and breach of cyber security is very possible.