One month has elapsed by after the sudden announcement of the ban of 86% of the cash running in the Indian economy. The prestigious-looking notes of 500’s and 1000’s became a burden to the Indian citizen in a moment. Though the past one month has inadvertently proved that the step has not been efficient in its goals of capturing black money and fake currencies than it has been successful in making the life of the common man difficult, the trends observed gives hope to technology.
Recently, due to fall in the sales, some small press publishers have had to postpone their upcoming catalogued books for at least 6 to 8 months. The reason is the reduction in revenue from Indian online retailers following demonetisation because Indian online retailers experienced a huge dip in sales and increased return of Cash on Delivery (COD) orders. There was a 30% drop in sales with a mass return of COD orders since the ban.
While the common people are trying to meet their daily needs with the little legal cash they have at their hands, entertainment takes a back seat in the ‘cashless economy’ ride. And the concern is how many industries will fall behind in their production? And another valid question is, wasn’t the step supposed to hike online purchases?
Perhaps, the dip is a temporary glitch in the execution of such a massively impacting plan. However, that should not be forever. And the hope is that the benefits outweigh the trouble caused in the long run, so that the long queues that still seem no shorter were worth the wait.
The aspects that can be immediately examined as a digital marketing agency are simpler. And the answers are pretty much conspicuous as well. Nevertheless, let’s take a look at how technology and the digital sectors have fared in the past one month.
First Things First: The Wallet, The Bills and The Indian
Found that your wallet was slimmer, easier to carry around, or no need to carry around at all now? And also discovered how easier it was to pay your bills (the most relevant ones like water, electricity and mobile recharge)? You are on your way to digitalization. Or are already there.
The hike in the use of mobile wallets and digital payment apps has been huge. The growth has been sensational. PayTm alone claims a rise of 200% in the app downloads and 30% increase in saved cards on the app. And the transactions and transaction value witnessed a volcanic elevation of 250% within hours after the ban. Whopping percentages, right?
The use of debit cards, the installation of swiping machines by retailers and the lifting of Merchant Discount Charges (MDS) are some other changes that has seen an upsurge.
But these digital payment portals are not without risks. Serious risks of theft and phishing accompany these modes. Which is why it is critical that the apps and the browsers used are secured with multiple levels of security.
Quite some hassle, for easing up.
Increased Demand for Cash in an Unstable Economy
This is the worst nightmare of an economy that was mostly unbothered about their day to day needs. But everyone needs cash to run around. And the run is not over yet. The small vendors and local stores have no means to survive without actual paper money. Their profits are in the little bits they get from their daily sales.
India with its vast rural and agricultural population may not be the ideal candidate for such strategies without warnings or adequate replacements. The failure to have kept the solutions ready before launching the economical bomb has pulled down the majority into a pit. We don’t get our staple food without farmers and farmers don’t produce without money and labour.
And the working class is not better off either. Those who get their salaries in their hands are petrified by the new Rs. 2000 bills because again, there’s either a queue, or a neighbourhood vendor who cannot get him a change for this new pink note.
Quite some drama, for giving up.
But Does Hope End Here?
Probably not. It is too early to conclude where this is going. Apart from the trends seen in the digital wallets and card transactions, innovative techniques are being launched for the population without internet access. The facility uses sound-based payment modes and the stores have to be enabled with the particular service as well.
An example is Tonetag, where the payments are done at a Tonetag-enabled vendor after the customer has registered their card details at Tonetag. When the customer calls a toll-free number, the merchant has to play a set tone from his Tonetag-enabled phone which is detected by the servers that process the payment.
But this again calls for technology though offline. Everyone has to have a bank account and card. And a smartphone. The hurdles in between are social issues like illiteracy, lack of awareness and education, which are not invincible. It does sound fantastic, now, doesn’t it, though with a touch of fantasy?
Technology is connecting the impossible to possible.
How About the Market for E-devices?
While the rush has all been about going E, what has happened to the market of tech devices? That has however fallen down. Even the market for smartphones that could make demonetisation easier on the population has met with a decline of 17.5%. But hopefully it is only because of the cash crunch in the society. But then, that has been the sole problem in the past one month.
An Overview from the Digital Eye
The spending behaviour of the population has been impacted significantly and so has the selling behaviour of merchants. Having online selling outlets and e-commerce websites for local business is increasingly becoming popular and marketing products and services via digital marketing techniques like social media marketing (SMM), branding, etc. are turning out to be a favourite among entrepreneurs.
Being armed with digital options of payments, sales and marketing and finding havens with online sales/PoS machines are currently the easiest ways to fix the chinks in the armour of our micro-economies in this situation.
Meanwhile, the reformations and revolutionary changes that have happened with regard to a digital economy in India were tremendous. If not for demonetisation, these changes could have taken a slow stead and arrived years later.
So perhaps, it is not as bad as it seems. The long run is however, yet to happen.