Since the sudden demonitisation of the Rs 500 and the Rs 1,000 in November of last year, Indians were forced to use mobile and digital A transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. systems – often half-heartedly. Although this abrupt move by the government was primarily aimed at fighting corruption, the secondary and longer term objective of this decision is to encourage Indian citizens to embrace digital payments. For the time being, the population doesn’t seem too keen on using these tools that often require greater investment of time and money such as purchasing a modern smartphone, ensuring an internet connection and understanding the technology to run the apps.
Current data exposes this trend: as Money in physical form such as banknotes and coins. becomes available usage of digital payment tools is dropping. For example, in terms of volume, digital transactions fell 10.4% in January compared to December. In terms of value, the drop was of 6.9% from Rs 100,055 billion in December to Rs 96,794 in January.
This downward trend will most probably continue as cash becomes more available and since the ATM cash withdrawal limit was removed.