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Both cash and prepaid cards ride on the convenience quotient only. However, the "secured" element of the transaction also needs to be given equal consideration -- the Paris attack and the Delhi heist should serve as a wakeup call to all stakeholders. Both avenues will have a 9/11 moment soon and legislation is bound to come in to control their usage. The Finance Ministry has already issued a paper talking about tax incentives for merchants accepting digital payments.
So what are the downsides of cash? From the consumer perspective, the most immediate is the risk of theft. From the businessman's perspective, the most immediate risk is counterfeit notes. There are other downsides too, like weak proof of payment, inconvenience, cash handling overheads, accounting costs etc.