Recently, the Indian government moved to ban the 500 and the 1000 rupee note, a move which the government notes will have an impact on “black money,” a term used to describe money earned on the Indian black market, where no taxes are paid. This means a lot of bills in circulation are about to be declared worthless, and that’s put households in a spin about what to do with this currency. A new alternative—that’s not really so new—has stepped in, and Indian mobile wallet firms are laughing all the way to the bank, or rather, account balance.
Benefits have been clearly seen at the three largest mobile wallet firms, Freecharge, PayTM and Mobikwik, Mobikwik offered some information on just how well this was going for the company, which has seen a 40 percent increase in app downloads following the announcement of the banned bills. Both user traffic and merchant queries have doubled, and the average balance carried in a mobile wallet system has gained in a big way.
PayTM offered up some gains of its own; app downloads doubled, and transactions and transaction values alike were up 250 percent. The absolute winner of PayTM’s report, however, came with the money added to its wallet systems overall, up fully 1,000 percent. This complements some of PayTM’s earlier moves nicely, as the company has been working to get its payment systems accepted in more than online shops, a move that has allowed it to be involved in utility bills, gas bills, cab rides and more.
Some believe that this is the start of a cashless economy in India, a move which would doubtless be welcomed by the government. There are few better ways to get rid of “black money” than to make each dollar readily traceable and accountable to individual mobile wallet accounts. It’s not exactly the best response—a lot of people still use and prefer cash—but it’s easy to see where the motivation is behind putting such a plan forward.
Regardless of the motives behind it, one thing is clear: mobile wallets are very happy with India’s plan to take a couple denominations out of circulation, and are seeing benefit accordingly.
