Up until this campaign of going cashless, India was an extremely cash-centric economy. Cash accounted for most of the transactions, vendors were not equipped with card readers or means of accepting cash electronically, more than ninety percent of the workers in the economy are paid in cash, more than half of the population did not even own bank accounts. Even Uber accepted cash in India, the only economy in the whole world, where this particular option was enabled. The “Cash on Delivery” option was regarded as the preferred choice of more than seventy percent of online shoppers.
Through the turn of events, the government turned off these mediums that ran this cash economy with the hope that more and more people of India would become familiar with using the trackable and taxable digital payment mediums, like e-wallets and credit cards. This demonetization scheme was something that was planned in secret, in the backroom of our Prime Minister Narendra Modi’s home. Whether the fact that India is ready or not for this step is something that will invite a sumptuous amount of opinions.
If we take a survey, among the millennials on how the cashless scheme will reflect upon an economy like India, we will come across some positive feedback. Back in time in 2012, Visa released a survey report. It was entitled “Connecting with the Millennials”. In the report, it was found that the majority of these people believed in the future of a cashless economy. Every eight among the ten voiced their wishes of a someday in the future when they will be able to pay all of their bills online. 70% stated doing this process through mobile phones.
The reservations regarding this big cashless move in India is gradually fading from the demography of the millennials. Opening of new bank accounts has been going on at a heightened rate, the option of cash on delivery has been crashing down at the e-commerce sites, and sectors focused on the digital financing such as the online grocery business has entered into a booming phase. The era of the cashless economy has put the various digitally-focused sectors in the limelight, and the millennials are getting the best use out of them to make their complex and competitive lives easier. Some of the most commonly used digital mediums are Mobile Banking, internet banking, Freecharge, Google Wallet, PayPal, etc. To use these, all you need is a smartphone with internet connectivity, and with just a click of a button, you will be able to transact money for various uses. Vodafone M-Pesa and Airtel Money are some other digital transactions means that act as a mobile wallet. One does not need any internet connectivity or smartphone, to use them. Through these channels, anyone can sell or purchase anything and can do that using any phone they have. One does not essentially need a smartphone to use these channels. All one needs is to top up their wallets, like one does their phone recharges and they are all set to go.
“Even the vegetable vendors on the streets have opened up Paytm accounts and they have a machine outside their shop where someone can scan the bar code and make the payment,” a college student explained.
A 27-year-old working professional in the IT sector, when posed with the question of the prospects of the cashless scheme in an economy like India, replied, “A lot more retail outlets are accepting e-wallets, including my laundry provider and my dabbawala. This is revolutionary, and survival of the fittest.”
When everyone in the country has been abuzz with the Modi’s demonetization announcement, the millennials have found ways to cope with the situation using the various e-payment providers. Usage channels such as Paytm increased, that the CEO of this company reported a surge of three times among the new users. Since the announcement of the demonetization program, a spike has been noticed both in the merchant registrations and app downloads. This spike has been noticeable among all of the cities, towns, big or small, not only within the big merchants but also among the small merchants like shopkeepers, street vendors, vegetable vendors, taxi and rickshaw drivers, and largely across the college students, working professionals in the public and private sectors, etc.
The recent move of the government cannot make the economy a perfectly cashless one, as this needs to be supported by well built, detailed & improved infrastructure, especially the internet banking services. The biggest advantage that the masses of a cashless economy can bank upon is to not get anxious about carrying the wallet or safeguarding huge amounts of cash or getting change for small purchases. All they need to do is click a button or swipe and they are good to go.
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