After Demonetization, India’s digital payment market explodes
Following a controversial decision of the Indian government to ban two of the major bills in circulation (500 and 1000-rupee notes), the floodgates have opened for a new tech market. Digital payment is exploding in the country right now, with one provider (MobiKwik) saying it’s seen a 75-time surge in transactions in one week.
So, what’s happened? Earlier this month, on November 8, the Indian government said it’s banning the two bills immediately. Until the end of the year, people would have to change them for new ones. The thing is, these banknotes account for the majority of the currency in India and 98 percent of all transactions in the country are conducted in cash. What was a move designed to combat corruption and inflation, has been very tough for both the market and the Indian people. But when a market collapses in itself, there’s often something that rises from the ashes. In this case, the potential winner is called digital payment.
“All the reluctance and friction in adoption of digital payments has vanished overnight. We are updating our numbers every day as usage is going through the roof,” said Upasana Taku, co-founder of MobiKwik to Bloomberg. What had been a trend expected to happen slowly and gradually in the next five to ten years, happened overnight. Startups like Paytm have also risen to the challenge and are offering lucrative conditions to get people to choose them as their new digital bank.
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