Demonetization to give major push to e-wallets, payments through UPI
New Delhi: The central government’s decision to demonetize Rs500 and Rs1000 notes will give a major push to e-wallets and the recently launched unified payment interface (UPI), an interoperable system launched by the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI), which will allow peer-to-peer and peer-to-entity payments. E-wallets like Paytm, Freecharge have been quick to capitalize on this and have been aggressively advertising to promote the usage of digital wallets as a way of moving towards a cashless economy.
Taglines like “Ab ATM nahi , Paytm karo” and “cash is so yesterday” are doing the rounds.
“This is a bold move by the government, although it may cause little bit of inconvenience for some people in the short run. Our target is mainly to capture the offline transactions into the picture, which is majorly cash based,” Madhur Deora, CFO, Paytm said.
Apart from this, other companies are also using different strategies to welcome this move by the government. Ola sent out notifications to its passengers saying – ‘Recharge Ola Money now and you don’t have to worry about carrying any notes, whether 500 or 1000. Ride cashless’.
Mobikwik also is providing cash pick up facility to its customers for some days. A person can click on ‘cash pick up’ on the Mobikwik app, a representative of the wallet will come to them to exchange Rs500 and Rs1000 notes and will directly load it in their e-wallet. This means, one doesn’t have to go to bank or automated teller machines(ATM’S) at all.
Big Bazaar kept all its stores open on Tuesday up to 11:50 pm and popular cafe Social too was accepting Rs500 and Rs1000 notes until midnight.
The fact that the trend has always been low value-high volume transactions in the online space is likely to change in future.
“Now both high and small valued transactions will become equally important in the digital space,” said Rajeev Arora, COO of FINO Paytech, one of India’s biggest business correspondents which will soon start its payment bank operations.
The Narendra Modi government scrapped the currency notes of Rs500 and Rs1000 denomination on Tuesday with an aim to curb black money and counterfeit currencies.
“This is a master stroke by PM which on one hand takes care of fake notes for funding terrorist financing and black money stashed in cash and at the same time is encouraging transactions using cheque, electronic transactions through wallet/cards and electronic fund transfers like IMPS/NEFT,” Sunil Kulkarni, deputy MD, Oxigen Services said.