A paper by the National Bureau of Economic Research in Mar 2014 shows results of a study on crime rates after states in the US began providing benefits electronically instead of paper checks (cheques in India).
Paper checks were quickly converted to cash, typically at check cashing stations, and then the availability of cash had a positive correlation with the crime levels in the area. One downside however, was that some of the government benefits were transferred to fee-ridden cards, effectively reducing the amount of available "money" to the beneficiaries. Additionally, the beneficiaries of the government benefits were normally denied access to banking channels, resulting in them having to transact in cash.
In the Indian scenario, this problem of accessibility to banking channels is partially being mitigated by financial inclusion schemes like Pradhan Mantri Jan Dhan Yojana. Thus access to a bank account and a Rupay debit card is commonplace. However, since the acceptance (PoS infrastructure) has not reached grassroots levels, the need to convert the balance in the bank account to physical cash continues to exist.
From the summary extract of the paper titled "Less Cash, Less Crime: Evidence from the Electronic Benefit Transfer Program":
It has been long recognized that cash plays a critical role in fueling street crime due to its liquidity and transactional anonymity. In poor neighborhoods where street offenses are concentrated, a significant source of circulating cash stems from public assistance or welfare payments.
Read the full paper here.
Paper checks were quickly converted to cash, typically at check cashing stations, and then the availability of cash had a positive correlation with the crime levels in the area. One downside however, was that some of the government benefits were transferred to fee-ridden cards, effectively reducing the amount of available "money" to the beneficiaries. Additionally, the beneficiaries of the government benefits were normally denied access to banking channels, resulting in them having to transact in cash.
In the Indian scenario, this problem of accessibility to banking channels is partially being mitigated by financial inclusion schemes like Pradhan Mantri Jan Dhan Yojana. Thus access to a bank account and a Rupay debit card is commonplace. However, since the acceptance (PoS infrastructure) has not reached grassroots levels, the need to convert the balance in the bank account to physical cash continues to exist.
From the summary extract of the paper titled "Less Cash, Less Crime: Evidence from the Electronic Benefit Transfer Program":
It has been long recognized that cash plays a critical role in fueling street crime due to its liquidity and transactional anonymity. In poor neighborhoods where street offenses are concentrated, a significant source of circulating cash stems from public assistance or welfare payments.
Read the full paper here.
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