Cashless or digital transactions play an important role in the development of commercial cities. Dimapur is one of the major commercial hubs of North East India and the main commercial centre of the state of Nagaland. Trade transactions between Nagaland and the rest of India are mostly carried out via Dimapur. Over the years commercial activities have been rising in Dimapur. Thus, Dimapur becomes a natural choice to make a gradual transition to a cashless economy. This paper assesses the prospects and progress of Dimapur in transitioning into a cashless economy and also identifies the advantages and challenges involved in the process. A survey was conducted using two questionnaires for this purpose: one designed for any resident of Dimapur and the other specifically designed for the goods and service providers of Dimapur. Based on the responses to the two questionnaires and secondary data from reliable sources, this study concludes that there is a high prospect for Dimapur transitioning into a cashless economy and there is a rising and encouraging trend in cashless transactions among the people. The major challenge detected in this direction is average internet and banking services.