The 8th of November was just another normal day in the country, at least until news channel flashed with alerts about the ban on 500 and 1000 denominations currency notes and the Prime Ministers address to the nation. Although emergency services were to continue to accept these large denominations, small businesses struggled with a surge in demand for returning the balance change. On the larger scale, online sentiment was positive when it came to the efforts taken by the Prime Minister to curb black money.
Despite the initial inconvenience, Twitter users supported the government on the issue of demonetisation, but had complaints with the banking system in terms of the execution of the plan. With a majority of people feeling that the execution could have been much better, there was a huge increase in the number of downloads of payment apps. The government’s move to withdraw 500rs and 1,000rs notes has come as a windfall for the digital payment solutions start-ups.
Paytm, which is the largest Indian mobile payment wallet with more than 100 million users, saw app downloads going up by three times and payments for offline transactions by five times in the first two days following the government’s move. Mobikwik with its 35 million customers saw a 100% increase in customer numbers in the past few days. HDFC’s Chillr mobile payment app has seen a growth of 30% in app usage and a 50% increase in downloads. PayU digital wallet also experienced a rise in wallet loads in the first two days. There has also been a surge in retail merchant enrolments to E-Wallet services. Digital wallet Freecharge has seen a 10 fold increase in the number of retail merchant signups in the past few days.
Although a number of industries are finding it hard to come to terms with the new reality, E-Wallet companies are the biggest benefactors of the government’s decision to demonetize 500rs and 1000rs notes. The trend has always been low value-high volume transactions in the online space, which is expected to change in future.
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