In November 2016, the Indian village of Dhasai took a radical decision and declared itself completely cashless overnight. The move came at a time when 80% of the currencyThe money used in a particular country at a particular time, like dollar, yen, euro, etc., consisting of banknotes and coins, that does not require endorsement as a medium of exchange. More in circulation was demonetised in an effort to promote digital paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More instruments. After less than a year, the project proved to be a complete failure. Indeed, almost all transactions reverted to cashMoney in physical form such as banknotes and coins. More.
Following the government’s recommendations to minimise daily cash transactions, Dhasai officials decided to transform the tribal village into a cashless one as of December 1, 2016. The Bank of Baroda actively participated in the initiative and equipped all retailers and shops with POSAbbreviation for “point of sale”. See Point-of-Sale terminal. More terminals. Initially, the project seemed successful. People even used debit cards to buy small-value items and locals were amused by the use of plastic cards – a payment instrumentDevice, tool, procedure or system used to make a transaction or settle a debt. More that some had never seen. But this phase didn’t last for long as the downside of digital instruments were quickly felt by locals such as such as a faulty internet connection and frequent electricity cuts. As a result, people had to wait for up to three minutes before the card swipe was approved, making the operation extremely frustrating.
The project started at a time when the country experienced a dramatic cash shortage due to demonetisationSee Demonetised banknote. More. As a result, the residents of Dhasai and other neighbouring villages welcomed the project with open arms as it was the only acceptable option to carry out transactions. Nevertheless, once the situation normalised and people were able to get banknotes at ATMs again, they completely abandoned the project, preferring to use a payment methodSee Payment instrument. More that they know and trust: hard cash.
The initiative was supposed to serve as an example success story for the rest of the country, demonstrating that banknotes are obsolete. On the contrary, it showed that paperSee Banknote paper. More moneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More plays a crucial role in rural economies and that it is extremely difficult to changeThis is the action by which certain banknotes and/or coins are exchanged for the same amount in banknotes/coins of a different face value, or unit value. See Exchange. More people’s habits and impose a payment method. What’s more, the experience proved that many regions of the world are not yet equipped for digital instruments.
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