In the modern age of digitization, the Indian government is trying to develop a cashless economy in place of the existing custom of physical currency in India. The biggest challenge for saving cash is maintaining a balance between ease of financial transactions and curbing malpractices. To deal with the problems of black money, Hawala, money laundering, the Government of India embarked on a cashless economy. Digital money has ushered in a new era of the Indian economy. The purpose of this paper is to identify the impact, issue and future trends of would face in implementing a cashless economy and possible measures to overcome them. This article focuses on understanding the cashless system in India and highlights the significant obstacles faced by the cashless economy and electronic payment systems. An exploratory study was conducted to calculate the transaction costs borne by customers and banks on the journey to a cashless society.