It has been over a month since the Indian government has first announced the demonetization move on November 8, 2016. Amid various steps taken by the government to balance cash crunch, it is evident that the situation has not become any better with non-functioning ATMs spread across the country. As a result, people have started using digital payments to pay for their daily essentials, with an increase of nearly 300% digital transactions when compared to the period before demonetization.
According to the statistics released by the Indian government, the number of daily transactions recorded on November 8 with various e-wallet services like Paytm, Mobikwik and Oxigen was reportedly 17 lakhs. The rate of transactions has shot up since then with an estimated 63 lakh transactions per day post demonetization. In term of value, the amount of money spent on each day through e-Wallets has increased from Rs 52 Crore (November 8) to Rs 191 Crore (December 7), recording a 271% surge.
Also, the transactions done through RuPay debit cards were on a high with a surge of 316% at a pace of 16 lakh daily transactions. On November 8, the number of daily transactions done through RuPay cards was only 3.8 lakhs. In terms of value, the growth has been 503% with Rs 236 Crore (earlier Rs 39 crore).
The digital payment companies expect that the surge will stay strong at least till the situation of cash crunch fades away. Digital Payments in India got a boost after the Finance Minister Arun Jaitley announced a host of measures to encourage citizens to transact through their debit and credit cards. Union Minister for Electronics and IT, Mr. Ravi Shankar Prasad said, “Our government is looking forward to utilizing the opportunity created by demonetization, towards making India a cashless economy. We have also provided incentives such as Waiver of service charges to encourage digital transactions. At the end, money spent through digital mode will be accountable, legitimate and beneficial as the government can generate more tax to undertake welfare programs”.
Pramod Saxena, Chairman of the e-Wallet company Oxigen expressed that the current trend may stay longer than expected with good results. “Though we anticipate that the rate of digital payments will come down after the cash crunch disappears, it is not easy to let off once we get habituated to paying online. Whatever be the case, no country has seen such a rapid transformation in making digital payments and I am confident that this trend will go on with good results”.