Why Consumers Spend More in Cashless Transactions ?

consumer-spending-indiaAcademic research indicates that digital mediums (credit/debit cards, digital wallets, etc.,) do not have cash outflow vividness, and hence reduce the pain of payment during a transaction in comparison to cash. As pain of payment reduces, spending propensity increases. Also, when using these mediums, people are more likely to underestimate or forget the amount spent on recent purchases; the lack of saliency for these mediums leads buyers to believe that they have more liquidity than they actually do, and this increases the purchasing probability of additional products (even non-essential ones).

Research also indicates that

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Demonetisation – Government of India’s Measures to Promote Cashless Transactions

government-cashless-transactions The central Government of India has announced a slew of measures for systemic adoption of digital / plastic currency. The benefits accorded to digital transactions and benefits perceived by the government are as follows,

Demonetization Effect – New Payment Platforms Grows

india-payment-platformsWith the boldest move in the History of India, The Demonetisation of Rs 500 and Rs 1,000, the nation continues to see a gradual shift towards newer payment platforms which should help India move towards a less cash economy. Higher tax compliance as well as lower costs have the potential to accelerate this change, especially post demonetization, but we would watch the pace of change for a few more quarters.

With 200,000 ATMs and 1.4 million POS machines, Indian banks seem to getting an unexpected benefit coming through demonetization as the bulk of 711 million debit cards and

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