Cashless system has engrossed the flow of currency in India and since commencement it is estimated to take Indian economy towards digitization. Demonetization has indeed started a revolution by providing a vital business platform for mobile wallet companies and the citizens to follow.
Prime Minister Narendra Modi, in November asked the nation to cope-up with the situation for 50 days, for a better future. During rallies in Goa and Gujarat, Modi assured citizens with another influential speech.
“If you find anything wrong with my intentions or actions, hang me in public. I promise you, I will give you the India which you desired. If someone faces problem, I also feel the pain. I understand their problem but this is only for 50 days.”
The completion of 50 days on December 31, 2016 leaves the nation with mixed thoughts and opinions. The decision of note-ban has indeed moved people to digital wallets and net banking, but does that leave us with a guarantee of a better future?
Reaping Rich Rewards
The dawn of demonetization bought every FinTech company in limelight for transactions and financial deals on every street, nook and corner. With PM’s requested 50 days completion, Dataquest studied the business and trading facts of companies. The renowned mobile wallet companies including Paytm, MobiKwik and FreeCharge have reaped maximum out of this huge business opportunity.
With the recent partnership of AIIMS (All India Institute of Medical Sciences) Delhi, with mobile wallet company MobiKwik, the renowned medical institution has taken a leap to go all cashless.
Paytm and MobiKwik have eventually witnessed record high transactions. Paytm announced 700% increase in its traffic and three times increase in installations nationwide; making the revenue touch up to $3608 mn. Whereas, MobiKwik earned over 2000% increase in money addition to its wallets along with around 18-times increase in transactions.
The overall effect of demonetization seems beneficial for regular mobile wallet companies. With government authorities opting for these companies to ease-off transactions through digital wallets, the economy can be said to be on the path of gradually becoming cashless. From local vendors to departmental stores, auto-rickshaw rides to paying electricity bills, the companies have left no corner untouched for business.
Somehow, the lack of digital banking infrastructure has played a major role in mobilizing the flow of business towards these companies to cash upon. Credit cards and debit cards have been replaced by e-wallets now.
Undoubtedly, the whole and sole effect of demonetization is the journey towards the digitalization of Indian economy. Apart from this, the completion of 50 days summed up the scenario for the nation as cash is still not fully accessible in ATMs and banks.
Apart from digital payments, the decision has proved beneficial for boosting tax payments and puts non-tax payers in radar of the Income Tax Department.
The conversion to cashless economy is estimated to increase savings in financial assets also. However, micro and small scale industries are in dire need of time and money to bring back their revenue and profits in line.
In a nation with a major portion of its population still untouched by digitization and internet as a whole, the dream still seems to be a long path to experience. According to a recent joint study of ASSOCHAM-Deloitte, however, India is said to reach 600 million internet users base. Till then, Digital India is reckoned to enhance the financial as well as digital infrastructure in India. The adoption of mobile and digital penetration will indeed be an asset towards the desired economy.