Ban on INR 500, INR 1000 Notes Can Drive Growth for Digital Payments Ecosystems

The government of India has just announced a ban on the ongoing use of INR 500 and INR 1000 bank notes and this bold move by the government can drive adoption and growth for digital payment ecosystems in the country.

The industry is quick to acknowledge this move -

“We welcome the Government’s bold and courageous move to weed out black money, which will have significant long term benefits for the economy. With this, the quantum of India’s economy moving through the digital pipes will witness massive growth. Both Snapdeal and FreeCharge are committed to supporting all such initiatives.” says Kunal Bahl, Co-founder & CEO Snapdeal

Upasana Taku, Co-founder MobiKwik, comments that the announcement of discontinuation of Rs 500 &Rs 1000 notes is a mind blowing initiative taken by Prime Minister Narendra Modi to curb black money in India.

"This is the biggest surgical strike on the menace of cash ever heard of anywhere in the world. This is a historic policy change and will do down in democratic India's history as more impactful than the economic reforms of 1990s. Our kids will read about this in their history and economics books. Within a 50 day period a billion Indians will change their payments behavior - we will move from cash only to a cash-free economy. This a strong step taken by the Modi government and will benefit the growth of digital payments and digital banking in India. We (MobiKwik) are excited to be a part of this historic moment." said Bipin Preet Singh, CEO of MobiKwik.

“There is already a state of panic - average Indians are freaking out as their money in 500s and 1000s is very soon going to be useless. They are figuring out what to buy or how to exchange it in a bank. Further there are limits on cash withdrawal also for next 50 days - so millions of Indians who never adopted digital payments are now scrambling to figure out how to use a mobile wallet or a debit card for daily life transactions. For retailers, its no different. All their hesitation for card/wallet acceptance will now disappear as they will be forced to declare all their income by depositing cash in bank. Cash on delivery for eCommerce will now become a thing of the past.

India users do a trillion US dollars worth of payments annually off which more than 90% are in cash. We at MobiKwik were trending to process $1 billion of payments in 2017. With this policy change, we expect a 10X impact - we expect to easily hit $10 billion in payments volume by 2017, “ adds Upasana Taku.

“Aligned with PM Modi's objective of preventing money laundering , we at MobiKwik have always aimed to encourage our customers to do cashless transactions. It is not only easier in keeping a track of transactions when money is exchanged online but will also help the government in ending crime and tax evasion. This long overdue change is finally made and will certainly boost our economy as a whole,” she explained.

Sathvik Vishwanath, CEO and Co-Founder, Unocoin, commented, "The intentions are good but very difficult to achieve. If going cashless is the only way forward, certainly the bitcoin which is borderless trustless and transparent currency makes more sense".

Manavjeet Singh, CEO & Founder, Rubique, said, "This is a promising move made by the government towards cashless economy. This will boost innovation in the nascent electronic payment industry. Without doubt, this will bring down frauds and thefts and costs of printing cash. A great blow to black money. If executed well, the costs of doing transactions between buyers and sellers will lower significantly by 2019."

Ranjit Punja, CEO &Co-founder, Creditmantri, explained, "Sweeping step taken by the PM, but this should have a positive impact in curtailing black money and reducing corruption. Likely to cause some temporary hardship, and with the introduction of the Rs. 2,000 note, along with the security and tracking features, currency will be used as intended."