Is india ready for cashless economy

According to the IAMAI report, the number of mobile internet users in India was estimated to touch 478 million by June 2018. Now guess the population of our Country?

Even when India has the second largest population of Internet users in the world, internet penetration is way less than 50 percent.

(Courtesy: Wall Street Journal)

In fact, the latest report from Pew Research Center confirms that India ranks AT THE BOTTOM on the list of internet usage-to-population ratio.

Similarly, even when the number of smartphone users is high in our country, compared to its large population, it’s meagrely low.

So, given these numbers, do you really think that India is ready for a cashless economy?

Did you really buy the garb of ministers and politicians who sold you their speeches?

Did those large banners and appealing ads of PayTM make you believe that the whole country is paying online?

Or wait, did that “we accept PayTM” QR code board outside a tea stall made you think that the entire baseline population in our country knows how to make online transactions?

Stop buying what politicians and ministers sell you from election campaign stages. It’s very likely that they have no clue whatsoever about the real picture and ground reality.

Cisco says India will have 800 million internet users by 2021. Now that is a mammoth number. But don’t underestimate the rate of population growth in our country; according to estimates, we will easily cross the 1.4 billion mark in the next 2-3 years.

(Courtesy: Business Today)

On top of that, aside from a slow consumer adaptation, we don’t have an infrastructure to support the cashless economy in our country. There are no proper outlined policies that are in sync with the latest industry challenges. Online websites and apps still have plenty of security loopholes that can be manipulated. Enrolling people in digital citizenry is still difficult given the lack of human capital and will. The people working in banks and relevant organization, even they don’t know how to operate cashless correctly.

In short, away from the promises of politicians, India is still a decade away from welcoming a cashless economy. And this is when we start working today to create a culture and infrastructure that supports the cashless economy.

Earlier in 2016, when the Prime Minister Narendra Modi announced demonetisation, the government supported its decision by calling it an exercise to curb black money. To some extent, it worked well in that direction. We saw news reports of people burning their black money, while some threw their Rs 500 and 1000 notes on roads.

Due to lacklustre curb to black money, the government kept changing its narrative around demonetisation. It later said that government’s move will address the issue of terrorism funding.

When this did not bode as planned, the government said that demonetisation was aimed at taking the Indian economy towards cashless economy.

But the billion dollar question is are we ready for it?

We are still not clear about government’s intent behind demonetisation but India did a commendable job and has took a big leap towards cashless economy ever since demonetisation has been announced. Considering India’s gigantic demography, we would need a robust infrastructure and a lot of education for bringing our rural under the ambit of cashless economy. In addition to that, the government need to take rigid steps to avail secure cashless transitions to build trust among masses.

The government should make sure that if India has to go cashless it should be safe. Cyber-crime in India is growing at an alarming rate. This has to be eliminated or at least reduced so that people believe and start transitioning towards a cashless economy.

If India manages to do so, we will be the first country in the world to become a cashless society.

Infrastructure: A large chunk in India is still not has access to mobile phones. We need to make sure that each of us, atleast whosoever is involved in online transaction has a mobile phone.

Network: It is no secret that India has worst cellular networks around the globe. Can you imagine a dream of going cashless without a good network?

Secure Payment gateways: India is a country where we have more hackers than good developers. Every now and then we hear a news report of phishing, hacking and financial fraud. Please also consider that over 50% instances are not reported as people themselves are not aware that they are being attacked.

PoS Machines: According to a 2015 Ernst and Young report, there were only 693 machines per million of India’s population, compared to similar emerging countries such as Brazil, which has 32,995 terminals per million people and China and Russia, each of which has around 4000 terminals per million people.

Corruption: Since all digital transactions can be monitored or traced easily. The income tax sleuth can easily nab people involved in doubtful transactions. In such a scenario, people who are involved in rampant black money transactions would never let India become a complete cashless economy.

Unfortunately, people who are involved in country’s decision making would not wish India to turn a cashless economy. India is ready for cashless economy but some Indians are not.