What are the pros and cons of pre-paid debit cards?

Why don't governments make using debit/credit cards instead of currency mandatory? What are the pros and cons?

• All transactions could be tracked by any point of time. Also it would stop the black money as well smuggling of duplicate currencies.

• Answer:

  I used to think about this solution when I was in school and the reasons that I thought are not favorable for this, still hold valid even after over 10 years. Talking about Indian context, a few scenarios, especially for lower income groups, where we cannot follow the 'only debit card' approach - 1) Unavailability of banks in a lot of village areas : Everyone will need to have a bank account - not only to spend money, to receive money too. A lot of daily wagers, earning a mere two digit daily salary, should have a bank account to receive the money which he/she has to spend right away to buy daily food. Some surveys suggest close to half of India's population still don't have bank accounts. 2) Unavailability of electricity & internet in villages: The problem can only be solved if follow of money can be tracked both ways - who is receiving how much money, who is spending how much money. Even if everyone has an access to banks to get the money de-materialized, to keep track of money flow banks have to be centralized and connected well over internet. Even if people have multiple bank accounts, any transaction has to be linked to one identity of a person, UDID can work for this now. But, as per a few sources, over 80,000 Indian villages have no access to electricity, forget about internet. If some big players acquire farmers land in remote areas, transactions will continue to be in cash and remain unregistered.  3) Unavailability of mobile Point of Sale (POS) to receive payments : Now let us talk about how small vendors or street hawkers will receive money. Local shops can still install required infrastructure, but workers like rickshaw pullers or the unorganized sector cannot carry expensive infrastructure to stay connected on internet to receive payments from their customers.   If at all this noble idea can get implemented someday, apart from corruption control, one of the benefits will be reduction in beggars, I am sure beggars cannot be moving around with POS devices to get them swiped. So most of them will know this is not an option, they need to do some work to earn their living :)