How E-Wallets Have Flourished After Demonetization

On 9th November 2016, it was the day which sent shockwaves among the people of India as the currency notes of 500 and 1000 were suddenly banned in an overnight’s period. The whole economic scenario of every household was turned upside down as everything right from traveling, buying groceries, paying bills, and managing daily expenditure became the toughest job in the world. Even though the new notes of 2000 and 500 hundred were introduced, it was nothing less than a fiasco to exchange the old notes against them as they were very less in number and the amount old currency was huge. In such stage, doing any type of transaction became the toughest challenge especially for the middle-income group of India.
This step was taken with the idea of countering the black money issue and also to resolve the problem controlling the influx of fake currency notes and its circulation. But at the end of the day, the common people of India was at the receiving end as they had to stand in infinite queues outside the bank to get their old money exchanged. The ATMs were not functioning anymore, and every house was feeling the brunt of the cash crunch. It exerted great pressure on the banking sector which compelled them to run for additional hours to serve the people standing in line for exchanging the money or to deposit them in the bank. Even online transactions done by credit and debit card was not working properly as people doing shopping at malls or eating at restaurants reported crash of system and their payment getting stuck.
In this whole scenario, the e-wallets became the major players, and their business flourished with a quantum leap. Mobile wallets like PayTm and Mobikwik at that time became the biggest relief for the people for the transaction of money. At that time, the online or mobile transaction was the only feasible option which was keeping pace with rampant change of India’s economic scenario. As cash transaction was becoming extremely difficult, both businesspeople and the common people were switching to this e-wallet option. Right after demonetarization, PayTm recorded nearly 5 million transactions each day. Not only the big stores of malls and restaurants were now keeping the PayTm transaction mode, the small shopkeepers and hawkers were also opting for this payment mode. An estimated INR 24000 crores were processed by this online payment service provider. There was a 1000% increase in the money registered in PayTm accounts and traffic rose on PayTm by 700%. Mobikwik also registered nearly 18 fold increase in the transaction right after the demonetization. Many bigwigs like Yatra, Indigo airlines, Cleartrip, MakeMyTrip stated that there was nearly 300% increase in the transaction of Mobikwik payment platform. There has been a 40% increase in the app downloads of these online wallets and nearly all the traders, and online portals have adopted payment mode via these e-wallets. Currently, other mobile wallets are also entering the market like Phonepe, Google pay, and Amazon which has made the competition among the mobile wallets even more interesting.

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