We all agree on the fact that demonetisation has been pinching several lower business class where cash and carry is the way out. It has been one month since the entire nation was levied with the note ban. The announcement, which banned the currency from the midnight of November 8, was immediately followed by long queues outside ATMs and panic at hospitals and for wedding preparations. Within no time, the informal retail sector was crashing, and those with no bank accounts (leave alone plastic money) were losing out on their daily wages. New currency notes of Rs 2,000 were not useful for their daily expenses, as nobody had change. Online payment, however, suddenly gained popularity.
A high percentage of startups are experiencing a slowdown in receivables and transaction flow as a result of demonetisation of high-value currency notes, a survey by LocalCircles has revealed. The survey had a participation of over 30,000 start-ups and entrepreneurs from across the country. Some of the members reported that their customers were paying the bills in the old currency notes. It was reported that 34% of them saw a reduction in customer transaction flow post demonetisation, 21% saw no impact, 13% saw an increase in the customer transaction flow while 33% did not have customer transactions in their business.
While online wallet companies including Paytm, MobiKwik and Free-Charge are declaring massive growth in business post the withdrawal of Rs 500 and Rs 1,000 notes from circulation, provisional data shared by RBI paints a far less buoyant picture.
Digital payment companies have been rushing to capitalise on the short supply of physical money following the government’s announcement on November 8 and its push to encourage cashless transactions. They have been pumping in lakhs of rupees to expand and ensure their platforms are accessible widely, in taxis and auto-rickshaws and at the smallest of stores and street vendors.
Let us now wait and watch how this unfolds further.
— Team SoS