The recent demonetization drive by the Indian Government seems to be congruent with their ambitious dream of absolute digitalization that obviates the need to make payments through cash and prevents socio-economic travails like fake currency and black money, among others. More and more people are increasingly looking at different payment options, which is translating into heightened downloads of mobile or e-payment applications. There is also a growing awareness about net banking and other modes of payments to pay bills and meet day-to-day expenses. It is against the backdrop of an aim to digitalize the economy, bring about financial inclusion and augment the usage of smartphones that the term plastic money is being used with almost monotonous regularity, for all the right reasons this time.
What Is Plastic Money?
Put simply, plastic money is the use of cards and other means we use to make payments in our daily lives. It is an alternative to the normal note (or cash) transactions that we make. While it is essentially used to denote credits, the word ‘plastic’ in the term refers to a card’s plastic construction as opposed to paper currency. They come in different forms such as debit cards, store cards, and prepaid cards, etc.
New technological developments have brought about a huge change in the manner in which we handle money and make payments. Starting with an innocuous-looking credit card that allowed you to buy just about anything and pay bills from anywhere, the trends continued to evolve in the form of debit cards and ATM cards which empower you to withdraw money while making online and offline payments and purchases.
Pros of Using Plastic Money
There are a number of advantages that plastic money entails especially in the context of demonetization. These include:
- Plastic money obviates your need to carry huge amounts of cash or any cash at all! This means that you no longer need to carry hard cash while traveling, which might put you in inconvenience
- If you happen to lose cash to theft or another calamity, of which you there’s always a looming possibility, it is not easy to get the money back even after exercising your legal options. In contrast, if you happen to lose your credit or debit card, you can immediately report to your bank and get the card blocked to prevent further misuse.
- One of the most glaring advantages of using cards is that you can use it anywhere, anytime. You can use it from resorts, hotels, ships, airplanes and even when you are overseas.
- In the case of credit cards, you have the option of making the purchase on credit and/or repaying later. This comes in really handy in contingencies.
- The increased use of plastic money is in absolute sync with the current government’s plan of providing a digital impetus to the country and move towards a cashless society.
- This is the cherry on top when it comes to the advantages of plastic money. You can use plastic money for a plethora of purposes like making fund transfers, online payments and numerous other transactions that save time and energy.
Cons of Using Plastic Money
Like most things, plastic money is not without its share of disadvantages. Knowing about them will help you circumvent potential loopholes and use plastic money with a greater sense of responsibility.
- Firstly, plastic money is not and cannot be an absolute replacement for cash because cash inexorably needs to be used to make some form of transactions, for example, street vegetable vendors, laborers, domestic help or milkman.
- Secondly, cards are still not ubiquitous in that they are not accepted in many small-scale retail outlets. Also, some outlets and restaurants avoid accepting cards while dealing with very low-value transactions.
- While it is more than possible and convenient to report the loss or misuse of plastic money, the risks involved cannot be undermined, especially when you are not aware that your card has been lost or stolen. This is because of the magnitude of risks catapults to fearsome heights in such cases.
Plastic money – the way to go forward
The benefits and potential of plastic money far outweigh any negatives or potential risks. Lowering the volume of cash transactions is one of the more efficient means of arresting the threat of black money and fake currency. Economists opine that if the Indian economy does not get integrated with the phenomenon of digitalization, the country could lose out on the opportunity to save about 2% of its GDP, which amounts to Rs. 215,000 crores.
Therefore, it only makes sense that there is consistency in intent and approach towards creating mass awareness about long-term gains of going digital, something that Internet Marketing School is proud to be an integral part of through its digital India ready crash course.