New technology in banking is transferring the financial world and the traditional banking is now a days rapidly changing. One of the latest banking technologies is block chain technology. It decentralizes the Indian banking system from central bank. Banks may not be playing any role in the system which will be shared between networks of computers. This paper studies the process of technological changes in the banking system by focusing more on innovations especially in electronic money in India. In particular, the study aims to gain understanding if block chain technology using virtual currencies like Bitcoin would bring about a paradigmatic shift toward a cashless society. Focus is on the rapid development of ATM, debit cards, credit cards, electronic fund transfer and Bitcoin in India. For analysis and comparing the development in banking area, technology S curve and Schumpeter's model of economic development are used. It can be concluded from the research that there is a shift towards cashless society in India.
KEYWORDS: Bitcoin, Payment System, Cashless, Innovation, Technology, S-curve.
Introduction This paper attempts to find whether the Indian banking system is ready for cashless transactions. This study focuses on the financial innovations and in particular the electronic money innovations in order to find whether Indian banking system is ready for the cash less society. The paper primarily tries to locate the current development in Indian payment system from cash, notes and cheques to electronic money or digital money like ATM, debit cards, credit cards, electronic fund transfer at the point-of-sale (EFTPOS), M Wallet, Mobile Banking and Bitcoin—the latest development of electronic money that has been pushed by countries around the world in attempts to be a cashless society and on the other hand it also attempts to find the position of Indian money payment system in S curve of technological innovation.
Conceptual Framework
This section focuses on the two primary factors that affects the useful life of any given technology – technology evolution and technology diffusion.
Technology Evolution: S-curve model is used to find how technology evolves over time. Scurves are utilized by scholastics and innovation forecasters to foresee how and when an upper limit of a given technology is reached. Technology evolution is changes in performance characteristics of a particular innovation after some time. History demonstrates that once a new technology is introduced, development in performance characteristics has a tendency to be slow, trailed by a time of rapid growth, pursued again by decline as the technology plateaus. The technology evolution can be clarified through the accompanying four phases: emergence, rapid improvement, declining improvement and maturity. These stages are represented in Figure 1, along with S-curve that maps the changes in performance characteristics over time.
