By CGTN’s Cyrus Ye
India is recovering from the economic disruption caused by the removal of two banknote denominations from circulation five months ago, but the move has boosted electronic payment usage in the country.
People wait to exchange demonetized Indian currency near the closed gates of the Reserve Bank of India, in Bangalore, India, on January 2, 2017. /CFP Photo
Last November, Indian Prime Minister Modi announced the demonetization of 500 rupee and 1,000 rupee banknotes, and the issuance of new notes in exchange for the old. The decision caused significant chaos in the Indian financial market, giving a boost to the development of electronic payment technology.
In the days following the demonetization, the country faced severe cash shortages, and an e-wallet app, named Paytm, became popular overnight. The company said they are still promoting the concept to small businesses.
"Many of the big shops actually know (the concept) because they are transacting through credit cards, but for smaller merchants, this is a new and innovative way, so that is why we launched a campaign to teach them, we have to be physically there, make them confident, whatever problems they have, I have to identify them, we help people on the street, making them much more comfortable using Paytm," said Ripunjai Gaur, Paytm's business lead in the Mumbai Region.
Bank employees marking customers exchanging defunct currency notes with indelible ink in a bid to tackle long queues and chaos in banks and ATMs at a bank in New Delhi, India, on November 16, 2016. /CFP Photo
Small businesses and street vendors took the biggest hit from demonetization, but they had no choice other than opening up to electronic payment.
"Paytm was promoting their mobile application, I turned them down, but after the demonetization, I had no choice but try to learn what mobile payment is. I didn't expect more customers using mobile payment, and my business started to grow," a street vendor Satish Pujari told CGTN.
Now different kinds of mobile payment softwares are in the Indian market, consumers are getting used to a cashless life. Although the banknote demonetization brought economic disruption, it has opened up a new era of electronic payment.