In a country where less than 20 percent have access to the internet, cash is a clear winner. India is a predominantly cash-based economy and reversing this mindset is going to be a slow, tedious process. The infrastructure and payment systems in India have been largely fashioned around the concept of cash transactions. The recent demonetisation announcement also highlighted our reliance on cash; it’s simple, easy to use and requires no reliance on the internet or a rapidly dwindling smartphone battery.
A recent report by Google India and Boston Consulting Group showed that about 75 percent of transactions in India were cash-based as of last year. Cash is not going away anytime soon; more so because 80 percent of people don’t have access to the internet. A viable infrastructure needs to be in place in order to facilitate online transactions. And that doesn’t just happen through the government alone, but also depends on companies like us, that strive to educate the next billion and steer the ship. The growing deficit of physical cash in circulation will start affecting small businesses adversely, slowing down the purchasing and producing capacity, which is bound to have a ripple effect on society. Infact, early ramifications of this are already visible around us today.
Our systems saw an exponential increase in traffic the day after the announcement was made because of the frenzy around a shortage of cash and surplus demand. We waived off all charges on debit transactions for our 13,000+ merchants because it was the need of the hour. Clearly, the fight is to get India online and if as a company we want to push the government’s agenda, we need to put our money where our mouth is. Such moves help the broader agenda of getting the larger population online. Interestingly, there is a slow but sure shift in the way people are reacting to this move; be it my watchman or the kirana store near my house, there is a sense of willingness to learn how to transact online and this ice breaker goes a long way in removing India’s dependence on cash.
Demonetisation almost overnight urged all segments of the society to embrace digital transactions. One of the segments that was most impacted by this move were the small traders or kiranas that had physical stores and no means to accept digital payments. While we were thus far solving for seamless online payments, this new problem made us go back to our drawing board and relook at our technology Uma to service offline stores as well. Our product and engineering teams worked round the clock to build the ePOS app, that enables brick and mortar merchants to easily accept digital payments through multiple means straight through an app on their phones without the need for any additional POS hardware, all this while ensuring the highest level of security and ease of use to both merchants and the merchant’s customers. For instance, Uma Medical and General Stores, a local pharmacy store from Chinchwad, Pune is able to tide over the tough times of the cash crunch, by using the ePOS app, which enabled him to easily accept digital payments.
Also, a vast majority of the new adopters of online payments, due to the immediate impact of the demonetisation or otherwise, are users from sub-urban areas who have poor access to internet. Since the demonetisation, we have scaled up our optimisation efforts even more to carry out payments even in average 2G speeds.
India is at the cusp of a digital revolution with many businesses embracing digital solutions and it is only a matter of time before even the common man goes digital and avoids carrying clunky coins and dirty notes. But, to waive off cash completely at the moment would be akin to sitting on an ivory tower and dictating terms to the larger population. Even Prime Minister Narendra Modi in his first radio address after the demonetisation emphasised that India should first focus on achieving a ‘less-cash’ society, which will then pave the way to build a cashless economy. To further drive this agenda, the government, very recently declared incentives ranging from about 0.75 percent to 10 percent on all digital payments made for a variety of products from petrol to insurance to railway tickets. While a few might not completely believe in a cashless society, countries like Sweden have proven that this is an achievable goal; the overall cash transactions in Sweden barely made up 2% of all payments last year.
Above all, digital transactions leave an imprint and help curb black money – a problem that has plagued our country for far too long. It is easily one of the biggest concerns in a rapidly growing country that’s fighting inequality and corruption. This move might not completely wipe out black money or test the will of the elite, but is a sure start to get more people to understand how digital transactions work. Today, we’re wiser about online transactions. A lot more people know how to make digital payments and are aware of the benefits of buying online. A conscious shift to use digital solutions from enterprises and individuals at large, is what will ensure that the next billion Indians are more accepting of technology’s advantages. It’s a small step for you and me, but a giant one for the naysayers and the lesser privileged who bank on 2G speeds to complete transactions. These tiny steps are going to usher in a new age – at a time when India is one of the fastest growing tech countries, the promise of digital can’t come quicker.
About The Author
Harshil Mathur, is the CEO & Co-Founder of RazorPay