The idea of a cashless economy has been doing rounds for quite some time now. The first step towards a cashless economy was the development of plastic money (Debit and Credit cards). With the advent of the internet, digital payments started gaining popularity. Card swipes, fund transfer from accounts, payment through UPI enabled systems, and the latest, crypto payments are some of the popular mechanisms of digital payments.
LALA World has a payments arm aimed at encouraging a cashless financial ecosystem. Known as LALA Bill Pay, it is a next-generation digital utility service designed to help with the payment of Utility Bills, Recharges, Business to Business Lending, Prepaid cards and Payments Acceptance by the Merchants. LALA Bill Pay will start its operations from India and gradually expand to other countries. It is collaborating with other payments service providers, NBFCs as well as telecom giants to ensure hindrance free services.
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The cashless financial ecosystem is the need of the hour for developing economies. Going cashless not only eases the life of the users but also helps to authenticate and formalize the transactions. This facilitates in curbing corruption and the flow of black money that eventually results in economic growth. The expenditure incurred in printing and transportation of currency notes is practically eliminated.
Sweden is a classic example of a functioning cashless economy. In Sweden, cash accounts for less than 1.2 percent of the country’s GDP. Many businesses in the country do not indulge in the cash transactions. Even the Swedish banks do not prefer to deal in cash.
Can Blockchain be of any assistance in creating a cashless economy? Blockchain has rightly been called the operating system for business transactions by many critiques. Technically, it is a distributed, append-only, time-stamped, secured, immutable, and when required, a transparent database. Just like the internet (or the intranet), Blockchain can be private or public.
A public Blockchain allows open scrutiny of transactions and thus fosters transparency. Private Blockchain, on the other hand, restricts access to a selected few, who have the requisite permissions. It enhances the security required in high-value transactions. The most significant benefit of Blockchain is the elimination of the intermediaries; the transactions can be completed without the involvement of a third party as well as a detailed audit trail can be created.
With Blockchain, it can be precisely determined what happened, when it took place and who was involved. Removal of intermediaries ensures that no manipulation of records is possible, thus saving the additional fees required to take verification/validation services. When put to use by government and its agencies, Blockchain can have a huge impact. It could change the way the whole judiciary works.
Read more: How LALA WORLD is Going to Re-define Ways of the Alternative Banking.
Blockchain and Government Contracts/Tenders
Blockchain can bring transparency in Government’s tenders by making them cashless. It is evident that intermediaries in the system act towards the withdrawal of unaccounted portion of funds at the time of allotment of the tenders. This results in loss of taxpayer’s hard-earned money. With Blockchain, this can be brought to an end, as every transaction is recorded and made transparent.
Blockchain would facilitate public access to all the tender allotment, transactions processed by the Government, businesses, contractors, public and everyone else who is involved in such transactions. The cost incurred and fund allocated at each level can be easily audited and accounted for. To ensure transparency every action can be recorded on the ledger and this ledger can be made public for scrutiny.
Government Payments and Cashless Mechanisms
With Blockchain in place, any payments made to and from the Government must be made cashless. As these transactions would be recorded on a Blockchain, it will eradicate unfair practices in the Government offices. It will undoubtedly help curb corruption. With the implementation of this technology, official contractors would not be able to underpay or overpay a labor.
Regulatory Banks and Blockchain
The cashless scheme would gain impetus if the central banks of the developing nations adopt Blockchain. Central banks are the regulatory guardians of the economy, and with a state-owned Blockchain system, the loss of revenue to intermediaries would be saved. A state-issued cryptocurrency could do away with the fees of banking services that make them expensive for low-income earners.
Blockchain and Alternative Banking Systems
Alternative banking mechanisms that allow a plethora of services would benefit a lot by adopting Blockchain as it would help in maintaining an indelible record system. LALA World is using Blockchain to empower its KYC platform. Any new user has to get a LALA ID to be benefitted with the services of LALA World. The information related to LALA ID is stored on the Blockchain and once created it acts as a permanent identification document globally. Further, without the permission of the id holder, the details cannot be shared with anyone. LALA ID is the heart of LALA Worlds other financial products such as LALA WALLET and LALA LENDS. With the bouquet of financial offerings, LALA World will certainly play a significant role in shaping a cashless economy.
Know what Disruptor Daily has to say about us: Disruption by Blockchain Part 52: Sankalp Shangari – LALA World