November 25, 2016 1:53:58 am
The move towards less-cash, less-paper transactions, characterised by significantly larger volumes of electronic transfer of funds and use of credit cards and debit cards, has a social and behavioural aspectthat is especially important in a society like India, in which literacy levels are low, and the concept of plastic, despite making rapid inroads, remains alien to large sections of the population.
A set of 85 surveys carried out by sociologist Nima Lamu Yolmo in 2014 recorded the change in social behaviour that accompanied the introduction of new forms of monetary transactions in New Delhi. The research concluded that credit card use, consumer debt, and digital fraud must be seen as interlinked phenomena, embedded in the very functioning of electronic money transactions.
Increased expenditure: The increase in electronic payments is attributed to the impact that the doing away with the tangible aspect of monetary value, embodied in cash, has on an individual’s psychology. Carrying out electronic transactions makes people feel more safe and confident; cashless transactions also have an idea of modernity and class embedded into them, making them more popular among young working professionals, the study showed.
Studying the manner of spending in malls, Yolmo concluded that respondents were likely to spend more frequently and lavishly when using cards instead of cash. A majority of those interviewed said they viewed both the malls and payments by cards as “a sign of development and progress, which reflected India’s competitiveness with other advanced countries”.
Trauma of debt: Higher spending through cashless transactions had a powerful link to debt-making, the survey showed. 95% respondents claimed to know someone who was in debt picked up through the usage of credit cards, and 32% admitted to facing the trauma of debt themselves. A large number of them mentioned having taken the desperate measure of applying for a second credit card just to pay off the debt on the first one. The respondents said the experience of using credit cards was thrilling at first because of the ability to pay for something immediately without actually having the money for it; however, the initial experience of thrill soon changed into distress with escalating credit card bills.
Digital fraud: The increase in electronic transactions increased the vulnerability to fraud. Crimes like credit card cloning, misuse of debit cards through impersonation, and site-cloning saw a steady increase. Despite the steps taken by the RBI and banks to secure transactions, close to 94% said they believed that the security measures were not adequate.
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