Digital economy is the buzz word across the globe. Don Tapscott coined the term “ Digital economy” in his best seller ‘ The digital economy and perils in the age of network intelligence’. This steering of economy towards becoming digitized now aims at converting everyday cash transactions by the citizens into a cashless transactions. It’s a shift in not only technology but also a shift in the behavior as well. Everyone by now has availed internet or digital technology for some service or the other. Cashless economy or cashless means all the transactions carried out between two individuals will occur by payment through payment gateways or through the plastic money. It is done with the primary aim of uncovering the nonregistered transactions. The Indian government with another aim to promote the economy through noncash transactions has introduced mediums such as: Banking cards, USSD, AEPS, UPI, Mobile Wallets, Banks Pre-Paid Cards, Point of Sale, Internet Banking, Mobile Banking, Micro ATM’s This paper aims to discuss why India has to become cashless economy, Pros and cons of cashless digital economy and preference mode of people towards cashless transactions and also throws out the challenges faced while transforming to digitalize the transactions.

Keywords: Cashless economy; Banking cards, USSD, AEPS, UPI, Mobile Wallets, Banks Pre-Paid Cards,Internet Banking, Mobile Banking, Micro ATM’s.