Cash plays an important role in shaping the economic system of a country. It influences not only the level of prices but also the cyclical behavior of consumption, savings, investment and employment. The cash is as much important in our lives as water, without which survival is not possible. Due to this importance we can’t even think of being cashless. But in this modern and digitized era, a cashless economy exists.After the demonetization, there is a big transformation in Indian Economy. Hence it could be said that DEMONETIZATION gave birth to DIGITIZATION (with special reference to transactions). Everyone is talking about digitized modes of transactions like mobile wallets, E-wallets, plastic money, etc. Thus, giving this concept an overlook, this paper focuses on the conceptual background of cashless economy and challenges facedby India to go Cashless.