Indian government’s sudden move to demonetize some of its most circulated currency papers reveals how utterly unprepared the nation is to accept online payments. Wherever you see ATMs, you will find thousands of people standing in a queue outside them with faint hopes of withdrawing some cash from their bank accounts. No, they know that there isn’t enough of cash in the ATMs but they too hardly have any other alternatives. Although there are plethora of e-payment solutions like MobiKwik, Paytm and Freecharge which have been there in India for a while now but recently they have seen a booming hike in popularity since the Prime Minister’s announcement of demonetization. Indians are trying to seep in the new trend of using online payments as the only worthy alternative to cash.
This announcement may serve as a lesson for those nations who have been looking forward to move their monetary transactions towards e-payments but who haven’t taken into account how it could have an impact on the lives of the millions of common men. Yes, it is true that going cashless has got multiple benefits but at the same time it isn’t easy enough to copy this kind of success in all markets.
Online payment solutions – Why does a country need it?
Payment solutions which are electronic includes using plastics to make payments and this process has got enough potential. Not only are electronic payments easy to track, they are instant and also cheap. Above all, leveraging online payments will save your nation a huge amount of funds. Financial analysts and economists have recommended that India could save up to ten billions of dollars every year if the citizens cut down their dependence on cash or rather paper cash.
Delivering payments of the government to the poor will pay for itself and the best part is that they will also be connected within a financial grid. The basic connectivity and infrastructure which is provided by this venture also plays a vital role in attracting business proposition to boost private players to offer different kind of services to the poor. These days, almost everyone has an option to buy their movie tickets either by using mobile wallet or their debit card. People don’t even have to use their paper cash as these can also be taken care of online. However, the only problem is dealing with low priced products like vegetables, groceries and milk and the common men are finding it extremely difficult to cope up with such expenses.
Where do we stand today?
Rural areas and small towns constitute the major part of India and this is why things are getting worse. There aren’t many branches of banks and finding out ATMs is a tough task to do. Each and every shop in the remote areas has a POS terminal which can easily accept payments and also debit and credit cards. In 2013, only 400 million Indians possessed a bank account and in 2015 it was seen that 85% of the female population of India didn’t possess any bank account.
One of the biggest challenges which are preventing India from becoming cashless is the dearth of smartphones. Although India boasts of the second-largest smartphone market, there are just 300 million smartphone users in India. This is barring most of the people from setting their hands on such POS terminal.
So, it can be clearly concluded that cash still remains the king of most countries and you need to spend decades before you can part with cash and paper bills in the best way.
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