Indians are ready to try out a less cash economy
A week ago, my newspaper vendor Avneesh Kumar came to collect his bill. Even before I could check my wallet for the necessary cash, he smiled and said in his typical West UP accent 'Madam cheque de do na!'
[Also Read: How Modi changed the demonetisation narrative]
Similar experiences were narrated from several of our friends who found that their tailors, fruit sellers, dairy shop owners and in one case even the 'Presswalla' were readily accepting payment from mobile wallets. Grocery shops in Delhi/NCR have already been accepting card payments predating the demonetization.
The difference now being that earlier it was limited to the big retail outlets but now even the corner 'kirana shops' have started trying it out. Of course, one may argue that this is Delhi/NCR and NOT the story of the country. But what about the stories of the Bastar chaiwalla inviting customers with his mobile wallet notice, the Gujarat village turning cashless and small time shopkeepers in Bihar giving customers the option of electronic payment despite poor electricity?
Indians willing to try out a cashless economy:
Let us take a look at the arguments forwarded by some of India's most well known experts. The most common being that India and Indians are not quite poised to move over to a cashless economy. But nobody is saying that transactions would become completely cashless. Much less Narendra Modi. However, if the idea is to migrate towards a less-cash economy, then Indians are ready and willing to try it out.
The second argument is more technical. It questions the possibility of electronic payments when smart phone penetration in the country is extremely limited. That is a genuine concern. But while smart phones are still expensive and complicated for simple, less-literate folk, the ordinary mobile phone is not. By making mobile wallet payments possible on the ordinary cell phone and enabling Aadhaar related electronic transactions popular, the goal of limiting cash dealings to the minimum may be within reach.
Some of the doomsayers have based their argument on behalf of the 'poor'. Nothing can be farther from the truth. Whether a dhobi, a newspaper vendor, a fruit seller or the corner Kiranawala lives in Delhi or Bastar or Patna, he can hardly be called rich. Their willingness to opt for digital transactions shows the poor are certainly more open to the idea than the experts.
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In any case, it doesn't require much brilliance to understand that the jump start towards cashless economy as shown by latest data cannot be limited to the rich classes or the big cities alone. The reason is simple. These people were already dealing in debit card/credit card for much of their purchases and payments. The upsurge obviously reflects those who were NOT dealing in it earlier.
India is changing its transaction pattern:
Here are some important statistics to prove that it is indeed REAL India which is changing its transaction pattern...the same India which the experts so incorrectly use to weave their arguments. Post demonetization Ola Money transactions jumped to an impressive 1500 percent across 102 cities of India. PayTM was next with an increase of 700 percent. Razorpay was third with 200 percent while Mobikwik recorded 15 times more traffic. The spike in card payments throws some more interesting facts. Card payments below 500 rupees more than doubled.
To break it down further, transactions less than 250 rupees rose 177 percent while it was 135 percent in the range of 250-500. On the contrary the rise in transactions above 500 was modest that is 75 percent. The spike in deals above 700 rupees was not even notable. So there...
To further prove the point that it is the small towns and average Indian buyer who is changing, it would be relevant to quote a bank official who said the number of requests for POS machines daily (3000-4000) is now equal to what they would get every month pre-demonetisation. In the end just one data (sourced from RBI) would suffice to close the argument. The volume of cash transaction in India was 78 percent predating the demonetization. Today, this figure has slipped to 20 percent in all. Indians have decided to jump over to a digital, less cash economy. The sooner the experts recognize the better for them.
(Smita Mishra, Advisor, Prasar Bharati)