Indians are having a tough time post the recent demonetisation of Rs 500 and Rs 1000 notes. Everything, from travelling to buying groceries, has become difficult without the availability of notes. Although new notes of Rs 2000 and Rs 500 have been issued, the process of collecting them in exchange of old void bills is indeed a tedious task. The move, which has been introduced to uproot fake notes circulating in the economy and unearth heaps of black money, has left people waiting in long queues in front of banks and post offices for exchange and/or deposit of money. Many post offices stated that they do not hold enough number of notes to be given to the public. ATMs too were shut because of low availability of new notes. In Mumbai, some people have also reported problems in swiping cards. Many hotels, shops, and malls are refusing to accept debit/credit cards as their card swiping mechanisms have crashed.
Mobile wallets- a boon for Indians, Demonetisation- a boon for mobile-wallets!
What comes as a breath of relief for some is the existence of mobile-wallets like Paytm and MobiKwik. Mobile/online payment mechanism is probably the only platform which is gaining profits amidst this massive transformation of the economy. As making cash transactions has become a difficult task (and will continue to be so for the next 6 weeks), people have switched to Paytm and MobiKwik apps for shopping and making payments. Paytm has made a record of 5mn payment transactions per day post demonetisation. The India-based company is to process more than INR 24,000 crores, the highest amount ever to be processed by any payment service provider in the country. A 1000% surge has been registered in the amount of money added to the Paytm accounts. While offline transactions showed a five-fold increase, traffic on Paytm rose 700%. Application downloads too increased by three-fold. Paytm revealed that in a week, the number of transactions per user rose to more than 18, up from 3. Moreover, within two days of demonetisation, Paytm registered 1mn new saved cards.
“Growth of mobile-wallets post demonetisation suggests that India, a cash economy, is slowly converting into a digital economy”
MobiKwik, another online payment service provider and Paytm’s close competitor, too saw an 18-fold increase in its transactions during the same time. The firm’s travel partners including Yatra, cleartrip, Lemontree, IndiGo, and Makemytrip informed that there was a 300% surge in transactions made using MobiKwik wallets. App downloads increased by 40% post demonetisation and is believed to be adopted by more than 1mn merchants in a month’s time. What make these mobile wallets more attractive than traditional credit/debit cards are their ‘user-friendly’ features, quick transfer of money, and cashback offers and deals on every transaction.
Hence, the present transformation of the Indian economy can be tagged as a Boon for mobile-wallet companies and also for their users. Not to forget that even the government and banks are taking efforts to pump enough new currencies into the system. In its latest announcement, the government said that the daily withdrawal limit at ATMs will be raised to Rs 2,500 from Rs 2000 and exchange limit at banks will be raised to Rs 4,500 from Rs 4000.