The first cashless wave post electronic card payments first swept India post demonetization in 2016. Currently, due to the Covid pandemic, a massive transformation to a cashless economy has emerged in India. By 2020, digital payments are projected to reach $500 billion. At the end of 2019, there was a 383% growth in digital payments in India.
Cash payments are still the primary method of transaction in India in all manners and forms. However, under the Digital India initiative’s sub-program Cashless India, the government aims to make India a ‘faceless, paperless, cashless’ society by 2021. RBI’s Vision Document which hopes to create a ‘cash-lite’ society predicts that UPI/IMPS will grow by 100% by 2021 while NEFT will grow over 40%.
It makes sense for a housing society to get on board the cashless train as the ecosystem is poised to grow with possible new incentives. Already co-operative societies in villages going cashless are being rewarded Rs 25,000 by the government.
Statistics aside, the biggest advantage that a cashless economy offers is the saving of time and ultimate ease of transaction. More so during the crisis of Covid-19 as it averts virus infections, but as cashless becomes the new norm, a post-pandemic era will witness a society more at ease with technology, especially if the government makes e-payment more accessible and secure.
Why is going cashless good for a housing society?
Members of residential societies are already accustomed to writing cheques when paying huge deposit amounts or other common funds towards society’s upkeep, repair, and upgrade. This is quite a tedious task for MC members to visit the bank physically to deposit/withdraw money.
Another common but redundant practice in housing societies is to collect maintenance fees in cash month on month (especially when the amount is under Rs 2000 to Rs 3000). Not only is it time-consuming but impractical and susceptible to theft or loss. A better option of course is online banking and mobile wallet payments which medium and large residential complexes have already adopted. However, that would entail another lengthy procedure for the Secretary or the Treasurer – maintaining accounting ledgers and reconciliation (physical or Excel spreadsheet) along with constant back and forth between pending dues and reminders to pay.
In the midst of half measures like mobile wallets, the complete and wise solution would be to have a community management software with a stellar integrated feature that enables online app payments and digital record keeping. Not only would your society be truly cashless but also advanced entirely with respect to any and all financial transactions. These apps enable payment through UPI, net banking, credit card, debit card, RuPay, Diners Card, Amex, etc., and are also integrated with major payment gateways as well as international cards. They’re equipped to allow auto bank reconciliation, quick settlements to society account, and the bonus benefit of zero convenience fees through app payments.
Regular service staff and domestic help can also be added as beneficiary and be paid cashlessly by the residents. Tracking advance payment, overdue payments along with auto-reminders make it convenient for MC to manage all wings and buildings effortlessly.
Pros and cons of digital payments for a housing society
- No danger of loss of money
- No chance of robbery/theft
- Convenience and speed of execution for residents
- No frequent trips to the ATM
- Less possibility of financial fraud and embezzlement
- No chance of contracting Covid-19, other contagious bacteria and viruses
- No waste of time writing cheques or visiting banks
- Easy and reliable tracking of incoming and outgoing payments
- Digital trail for audit, traceability, and reviews
- Ease of executing small, medium, or complex transactions
- MC can focus on high-value tasks instead of unnecessary paper-based accounting
- Lower prevalence of cashless ecosystem in certain neighborhoods
- Lack of knowledge and technical education
- Prone to hacking and online fraud
- Depends on WiFi networks and mobile devices, thus unavailable in case of no internet and battery
- Resistance from within the traditional mindsets and lack of faith in technology
With the RBI predicting a 50% increase in mobile payments by 2021, the future for a cashless society in India is already set in high gear. The real change happens from the inside. If the Managing Committee and proactive residents can promote the awareness of ongoing cashless as a best practice, slowly and surely enough traction can be generated towards going 100% digital. The MC can hold training and demonstration camps within the society to educate the residents of the multiple benefits of going cashless, which by the way is much easier now that lockdown has made it pretty much inevitable to transact digitally.
What society must invest in is a reliable and first-class society management app that’s a boon for the community and a true asset for the managing committee.
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