DIGITAL WALLETS ' " BLACK SWAN " MOMENT
Is cash set to abdicate its throne in India ? It wouldn ' t be an understatement , especially given the recent furore over demonetization in the country ! Without trying to sound too ironic , the government ' s move to demonetize 500 and 1,000 rupee banknotes has , without a doubt , had profound and far-reaching implications . It is a courageous move ( in my opinion , at least ) towards tracing and eradicating black money and counterfeit currency . Having said that , however , let ' s not forget that it is merely the tip of the iceberg . How ? Well , from our perspective , this development has had an interesting impact on the country ' s digital payments space . Almost 86 per cent of India ' s currency circulation was reduced to mere paper after November 8 , 2016 . Yet , digital wallets and financial technology companies laughed all the way to the bank . Naturally so , as customers turned their attention to digital payments almost immediately , thereby side-stepping the serpentine queues outside banks and automated teller machines . Here ' s why this is significant-up until 2015 , 78 per cent of all customer payments in the country were carried out via cash , as per a joint report by The Boston Consulting Group and Google India . Clearly , cash was the king in India !
Things have , needless to say , changed rather dramatically since then . Let ' s take a closer look at the numbers to understand how . Shortly after the announcement , digital payments company , Paytm , registered over 7 million transactions worth Rs 1.20 billion a day . This propelled its gross merchandise value to over $ 5 billion . Of course , every digital payments company in the country left no stone unturned to leverage this opportunity to the fullest . And , they succeeded quite admirably , if the numbers are anything to go by . To cite another example , MobiKwik also witnessed a 200 per cent increase in downloads and added over 200,000 customers on a daily basis ! That apart , the company is well on its way to on-boarding 1 million merchants in a span of 45 days . No small numbers , these ! As a brief side-note , I feel that it is pertinent to highlight the example of Akodara , a village situated 60 miles from Ahmedabad . What makes this example so special is the fact that it is India ' s first digital and cashless village . Most of the 1,200 strong population there execute daily transactions-value notwithstanding-through digital payments . Of course , the intent of this piece isn ' t to wax eloquent on how these companies managed to set their cash registers ringing , in the aftermath of demonetization . Instead , the question is-is this a short-term surge or will the Indian consumer ' s behaviour towards digital payments undergo a sea-change ?
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