India might not be ready yet to completely transition to a cashless country, but in the state of government’s major demonetization decision, people are quickly learning to make payment online.
The Indian government invalidated Rs 500 and Rs 1000 notes two weeks ago. The sudden shortage of cash has impacted the lives of millions of people, people now have to stand for hours in endless queues outside banks and ATMs just to get some cash in hand for daily use.
Mobile wallet apps have been reporting increased number of app downloads in India. The digital payments firm Paytm, has been one of the biggest beneficiaries after the government of India demonetised higher currencies. Paytm announced this week that more people are now using its online payment system than all the credit/debit cards usage combined.
Last Saturday, Paytm handled over 7 million transactions that amounted to more than Rs 1.2 billion. In comparison, debit and credit cards account for over 6.9 million daily transactions, according to data provided by the Reserve Bank of India in August 2016.
Paytm with its competitors like MobiKwik, Ola Money and Freecharge, has been cashing in on the sudden cash shortage in the country. They announced an app-based point-of-sale solutions (POS) that will help small merchants without card swiping machines to accept card payments directly on their smartphones.
Paytm founder Vijay Shekhar Sharma said the POS app will accept all card payment with zero transaction fee till the end of the year and expects to see over 10 million Paytm POS downloads by the weekend.
Vijay Shekhar further added:
“There are about 550 million people with debit cards in India. We just don’t have enough POS machines. We expect about Rs 300 billion ($4.3 billion) gross transaction value on Paytm platform by the year end.”
The RBI also announced to double the limit for the money that people can keep on e-wallets from Rs 10,000 to Rs 20,000 every month. Prior to this announcement, people had to either switch between multiple wallet apps, or somehow they had to manage with the Rs. 10000 limit.