This article is written by Anaya Jain, a student of BA.LLB(Hons) from NMIMS school of law, Bangalore. This is an exhaustive article which explains what is the cashless economy and the role played by mobile phones in digitalisation of the economy. 

Introduction 

“Change is the law of life and those who look only to the past or present are certain to miss the future”. This is rightly said by John F. Kennedy and digitalisation of the economy is one such change. It is the need of the hour towards our journey of becoming a developed nation. Digitalization is the generic term for the Digital Transformation of society and the economy. It depicts the progress from an industrial age portrayed by simple advancements to a period of information and innovativeness described by digital technologies and computerized business development. Digitization of the economy refers to an economy that depends on digital computing technologies, in spite of the fact that we progressively see this as leading business through business sectors dependent on the internet and the World Wide Web. The computerized economy is additionally referred to as the Internet Economy, New Economy, or Web Economy. How 4G Mobile Phones have aided us towards more Digital IndiaEnabling online banking and financial services with high internet speed, the pace of adoption of net banking and finance services, like e-wallets has additionally increased. The nation saw a marked increment in digital transactions after demonetisation in 2016. 4G Mobile Phones assumed an instrumental role in the effective change from hard money to computerized cash all over India.

Digital Services is an ever-increasing number of services are being moved online by the legislature. These days, you have applications and websites for getting practically the entirety of your government paperwork (PAN, Aadhar, Driving License, and so on) on the web(online). At that point, there are devoted portals and e-locker services to save your reports in a computerized format. Additionally, people have been utilizing travel applications to make their appointments for some time now. All these computerized administrations offer comfort which was not accessible a couple of years prior. This is conceivable because of the change to 3G and 4G Mobile Phone technology. 

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Social Media Sharing

While the government, multi-nationals, and new businesses are offering computerized administrations, the social network of Facebook, Twitter, and Instagram is advancing them among the majority. In this way, the job of internet-based life in advancing the Digital India initiative is additionally irrefutable. Applications, for example, Uber, Ola, Zomato, Foodpanda, Amazon, Flipkart, and so on were advanced through web-based social networking. These applications have fundamentally changed the manner in which we travel, eat, and shop. Each rupee spent online is a contribution to the digital economy. Here once more, the web speed and bigger screen size of 4G Mobile Phones have made the browsing experience progressively lovely and bother free, driving the adoption pace of online services.

Day Job of Mobiles in Cashless Economy

As indicated by a recent report from Economic Times, urban India is quickly arriving at the immersion point with 51% market infiltration while provincial India with 16% is the future market for development. It additionally included that the clients in urban India developed at 9%, while development in rural India is just about multiple times at 26%. These numbers clearly show that smartphones are bit by bit making advances into our economy. 

Today it is practically difficult to imagine our existence without advanced mobile phones. Presently versatile applications steer our day by day exercises in each perspective beginning from official communication to amusement. Mainstream mobile brands are presently moving towards a portable first system around their products. For example, brands like Quikr, Olx, Uber, Flipkart and so forth currently promote their presence on cell phones first. Due to the handily reach and accessibility of 3G and 4G systems, banks, and payment gateway companies are exploiting these high-speed networks to expand their payment framework. As a consequence, we can experience the birth of various apps like Paytm, Gpay, Paypal and so on for cashless transactions and thereby making a contribution towards digitalization of the economy.

In Demand Methods for making Cashless Transactions through Mobile Phones

Cashless payments by mobile are worked under banking and money related guidelines through cell phones. The influx of digital transactions gave a push to this innovation and earned wide acknowledgement till date. Here are a few famous models of cashless payments by mobile phones:

Mobile Wallets

Mobile Wallets assist clients with making one step of instalments through smartphones in light of the fact that the client’s card details are safely put away in the cloud. A client simply needs to enter his/her card data once. Some well-known players in this method are PayTM, Mobikwik, Apple Pay, Google Wallet, Paypal, Square Wallet and so forth. 

Mobile Banking Apps

Today, major banks are offering mobile banking applications on Android, iOS, and Windows mobile platforms. Not just that, it empowers clients to monitor their balance, transaction history, money transfer details and so on. In fact, the bank agents presently urge clients to go for mobile banking for its ease of use. These banking applications permit payment utility bills and producing OTP for online purchases. Indeed, even these applications help to find banks or ATMs, change PINs and so on.

Carrier Billing

Clients can buy on a mobile application utilizing career billing. Based on the two-factor confirmation process, which includes PIN and OTP, Career Billing charges purchases to the consumer’s account. It doesn’t include credit/debit cards and in this way, it’s a protected and safe alternative payment method. 

Contactless Payment

A client can put his/her credit card details in the smartphones (like Apple Pay) with the assistance of Contactless Payment. It is securely put away on the implanted smart chip for sometime later. When the client needs to purchase at any store, he/she just holds up the telephone to the mobile payment reader at the POS terminal. Utilizing NFC or RFID the gadget/card builds up an association with the POS and does a secured transaction. 

Payment Gateways

The payment gateway is an e-commerce service that procedures credit/debit card payments for online buys. These gateways ease online exchanges by moving key information between payment portals like web-enabled cell phones or sites and the front end processor or the banks. A payment gateway serves a pivotal job in the online business exchange process and approves the payments among merchant and client.

Security Challenges

Despite being easy to understand, there are vulnerabilities too in these cashless mobile transactions which can be misused by cybercriminals and result in interruption of services, tax evasion and loss of income. Let us check some potential vulnerabilities below.

Rogue Public Wifi

Individuals have the general tendency of avoiding mobile data if public WiFi hotspots are accessible at any place. However, the security level of free open WiFi isn’t equivalent to home WiFi, also, the chance of lawbreakers actualizing a Rogue WiFi gadget to catch the traffic can’t be ruled out. Besides, the chance of getting contaminated by a Mobile Malware likewise exists when utilizing such rogue networks, henceforth to avoid such chance, there ought to be reputed anti-malware software installed on the phone.

Android Repackaging Attack

With over 95% share of the overall industry, Android had the greatest piece of the pie as it had the biggest market share in 2016-17. Considering the fact that the pattern will continue, a typical security danger of repackaging attack may likewise maximize. Repackaged applications are nothing but contaminated versions of well-known applications. After downloading any well known Android application, the programmers get the codes with the assistance of reverse engineering. At that point, those codes (now and again malicious) are included, repackaged and discharged. This requires a signature database and Multi-day dangers can never be recognized with this. Repackaged applications are one of the significant explanations of infected Android applications and limit the clients from different Android malware.

Installing Malicious Apps

At the point when the client introduces any outsider application without checking its legitimacy, there is a high chance of the gadget getting traded off and private client information being spilt. Thus, it is constantly recommended to introduce applications from trusted hosting platforms and the application’s guidelines and surveys ought to be read appropriately before installing it.

Weak Passwords and not utilizing multi-factor authentication

Powerless and simple passwords and PINs utilization impact online assaults. That is the reason mobile vendors are executing multifaceted validation systems which require more than one identity credentials. It joins at least two or more autonomous credentials, for example, what the client knows (i.e. password or PIN), what the client has (i.e., security token) and what the client is (i.e., biometric check). The objective of multifaceted verification is to make layered protection and make it progressively hard for attackers to play out unauthorized access.

Lost or Stolen Mobile

Since cell phones are prone to theft, it is fitting to execute an Anti-Theft application in addition. Moreover, the clients should consistently reset and wipe to production line defaults before selling the gadget.

Conclusion

The mobile revolution has just started, and as mobile phones keep on being adopted all around, the telecommunications landscape will without a doubt proceed to develop and change. It is discovered that cell phones do indeed have a huge effect on financial development and advancement. Increments in the cellular mobile memberships rate add to increments in real per capita GDP. Furthermore, cell phone use has a little, yet the noteworthy effect on GDP development rates. 

Over the following ten years, the cell phone industry will keep on growing. Cell Phones are just an advancement device. They are insufficient all by themselves to revolutionize any nation’s principle productive industries. In agrarian countries, for example, Uganda, Mobiles can make agricultural production progressively productive. They can expand correspondence about market costs and demand, as well as help coordinate production and work schedule. In nations where fishing is a significant source of revenue, cell phones can improve the norm and personal satisfaction by bringing down hunt expenses and bringing down the dangers of fishing.

Mobile technologies make little, steady changes to existing businesses with the goal that every nation can develop and create at its own, stable rate. It is found over the outcomes that mobile phones have a positive and noteworthy effect on monetary development. In future, it is expected that Mobile Phones will encourage development until the degree of mobile saturation is reached. At this point, new advancements and technologies will probably replace the mobile phone as a development tool.

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