But drama else­where


De­mon­eti­sa­tion has changed the way Delhi-based Ro­hit Koshy, 41, vi­cepres­i­dent at bike taxi ser­vice Baxi, trans­acts. Koshy used many non-cash op­tions even be­fore 8 Novem­ber 2016. “I re­mem­ber a day dur­ing de­mon­eti­sa­tion. I had to recharge my Metro card while I only had Rs20 in my wal­let. I got to know I could do it on­line. I started do­ing ev­ery­thing elec­tron­i­cally. I also pre­fer us­ing UPI (Uni­fied Pay­ments In­ter­face) for a lot of per­son-to-per­son trans­ac­tions,” he said.

Sur­pris­ingly, his cash trans­ac­tions have in­creased af­ter de­mon­eti­sa­tion. “Be­fore de­mon­eti­sa­tion the trans­ac­tion ra­tio was 80:20—80 be­ing non-cash trans­ac­tions. This peaked dur­ing de­mon­eti­sa­tion. How­ever, the de­mon­eti­sa­tion ex­er­cise has left a fear—what if the same thing (cash crunch) hap­pens again? So I end up with­draw­ing more cash than re­quired and keep­ing with me. Hence, now the ra­tio is 50:50,” said Koshy.

For Man­ishree Gupta, 31, team leader at a fi­nan­cial plan­ning com­pany, the shift was from cash to non-cash. “Wher­ever the plas­tic op­tion was avail­able, I used cards. Things got ac­cen­tu­ated when de­mon­eti­sa­tion hap­pened and cash was in short sup­ply. For in­stance, our of­fice can­teen got Paytm and even for Rs5 trans­ac­tions I started us­ing elec­tronic chan­nels. From al­ready 50% cash­less, I moved to around 80% cash­less,” said Gupta.

These are but two of a bil­lion sto­ries out there on how de­mon­eti­sa­tion brought about a mind­set shift in peo­ple’s ap­proach to spend­ing.

Fall in dig­i­tal pay­ments

Ac­cord­ing to bankers, fin­tech com­pa­nies and the Re­serve Bank of In­dia; while dig­i­tal trans­ac­tions spiked af­ter the note ban, their num­bers have since de­clined. “If we were do­ing 100 trans­ac­tions be­fore de­mon­eti­sa­tion, that num­ber went up to about 300 dur­ing de­mon­eti­sa­tion for the ob­vi­ous rea­son that there was no cash,” said Ra­jiv Anand, ex­ec­u­tive direc­tor, Axis Bank Ltd. “How­ever, as com­pared to say the 100 num­ber be­fore NEFT Be­fore (Oct 2016) 9,50,400 34,400 30,200 2,76,700 6,000 3,400 Debit card de­mon­eti­sa­tion, now it is at 150-160. It has not gone back all the way to 100 de­spite the fact that cash is back in the sys­tem,” he added. Data bears him out. The table ‘Booster dose’ shows how dig­i­tal trans­ac­tions rose and then fell post de­mon­eti­sa­tion.

What next

In the last 1 year, mul­ti­ple pay­ment plat­forms have been launched in the mar­ket, in­clud­ing UPI and Bharat QR (Quick Re­sponse). In the com­ing years, as a con­sumer, you can ex­pect con­sol­i­da­tion. “The Dur­ing (Dec 2016) 11,53,800 43,200 31,200 1,43,000 9,800 7,400 IMPS PPI Credit cards m-wal­let Aug 2017 70000 60000 50000 40000 30000 20000 10000 0 prob­lem to­day is not on the part of ac­cep­tance from the con­sumer side. The prob­lem to­day is of plenty now. If you give too much choice to a cus­tomer, she will get con­fused. Not ev­ery cus­tomer is fi­nan­cially lit­er­ate to un­der­stand all the prod­ucts now. Rather than giv­ing too many op­tions to the cus­tomers, let us just pick up the best few prod­ucts which are con­ve­nient for the con­sumer and are scal­able. That would be the best way to go non­cash,” said Manju Agar­wal, deputy man­ag­ing direc­tor of cor­po­rate strat­egy and new busi­ness, State Bank of In­dia.

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