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  • Category: Club House Discussion

    Demonetisation - will it help us see rising technology use in financial transactions?

    India has been witnessing unprecedented queues in front of the banks and ATMs. The demonetisation of Rs. 500 and Rs. 2000 notes has been a reason for joy for us as a nation united. Yes, there are several issues being faced by general public, but for the larger cause a few sacrifices are indeed needed.
    Political and financial implications of the decision apart, will demonetisation drive impact the use of technology in financial transactions in a positive way? The mobile wallet companies and credit/debit card issuers have been leaving no stone unturned to reap the benefits. In fact, I have always believed in using plastic money. I would expect the rise in the use of alternative means of financial transactions like Net banking, wallets and cards. And the money so used will be accountable. That would be another advantage for the nation's economy.
    What do our techian friends think, would be the implications of this huge change? Share your views so that we can have a positive discussion.
  • #24696
    I am myself facing a tremendous trouble of cash crunch. None of our local ATMs are working. As a result all our departmental stores like Reliance Fresh and even small Kirana Stores are forced to accept cards without any minimum amount.
    But that's the urban picture.
    I have every doubt about what is happening in the rural side. People do have mobile, but when the Govt. of India is failing to fund the ATM, how are they going to reach every small retail outlets and small business people with the card swiping machine? It is not only appearing as a wild dream, it feels ridiculous.
    There is no prior preparation taken before this demonetization decision, and people are all busy in fending themselves rather than teaming up or volunteer any sound system to come out of this mess.
    The only hope is there, if some big business house get the idea and willpower to manufacture, integrate and reach each head of this country with a digital solution. But even then one needs a bank account for any digital financial transaction which most of the people do not have.
    Other than maximizing the digital options which were already in place, I don't think there's really any positive technical boon coming our way.

  • #24700
    Digitalisation of financial transactions will effectively do away the practice of stacking of money that has been a menace for a sustainable economy. All our transactions would be transparent, and as such there will indeed be a positive growth. Maybe it will stop hoarders of food grains and other such essential commodity and bring down the cost of living. From that point of view, I would consider digitalisation should be something we need to pay attention to.
    Coming to the problems being faced by the rural population, it depends upon the education of the masses about the importance and benefits of banking system. For instance, in Goa which is my home state, even the poorest of the poor has a bank account. They can be taught about the usefulness of digital money and the digital channels. I know it can take time, but not something impossible.

    Live....and Let Live!

  • #24705
    Even I was very hopeful with the demonetization announcement, and felt proud of our people who stood steady with the decision and took the hardship so sportingly. But last few days the scenario became much more grim than expected.
    The Banks are not supplied with the amount of notes and people like us, who don't have any stacked money to exchange, and keep everything in bank are the ones who are suffering.
    The black money holders are taking out newer ways of corruption and creating a havoc in the society.
    On the other side the govt. is reluctant to release smaller demonition notes than 100s like 10s, 20s and 50s.
    Unless the govt. is equipped with an alternative system which could be implemented 100% especially when "Digital India" was already conceptualized, this demonetization isn't going to help catch the culprits and iron out the mess, the country is going through now.

  • #24707
    It is just not illiteracy and corruption that holds back attempts to go digital. There are many reasons why going cashless is difficult in India. A few of them are:
    1. Charges on each transaction - If you make use of Debit card or Credit card banks usually charge 2% on each transaction which makes up a huge cost for local kirana stores where the margin itself is around 5%.
    2. Low penetration of banks - There are still many places in India where people have to travel 10 kms to reach a bank.
    3. Unwillingness of banks to open merchant accounts for small traders.
    4. Failure rate of transactions with cards as well as with ewallets. You jut can't trust that they will work unlike the good old cash.
    5. Fear of over expenditure since with a card you have your whole bank account balance in your hand to spend.

    I can think of more reasons but I feel the issue of charges or the problem of a large population being still unbanked if resolved, we can much more easily more towards a cashless society.

  • #24711
    The charges being levied by the banks can be an issue, definitely. If the government wants to make digital India a success, it should consider controlling the costs associated with the use of POS machines.
    Live....and Let Live!

  • #24720
    The system is OK but it is basically little tough for the common people to overcome quickly from such scenarios due to lack of Banking and ATM process and transaction for it. In fact, the technology only helps it to get things done quickly whereas manpower lacks or slow down on this process.

    There are few more surgical attacks have been heard, one of the upcoming after Rs 500 / 1000 Demonetization is, Real Estate strike on Black Assets, effective Apr 2017 and property owner shall register and have to have EPPB (E-Property Pass Book associated with PAN and Aadhar card to own his / her property or else it will go to Govt.), not sure about it though. Let us see how it goes :)

    Regards,
    Hafeezur Rahman

  • #24728
    Everything brought by the government so far for demolishing the black money was good work. In most scenarios it brings India in notification compared to the world wide. But more moderate people suffered due to the lack of troubles they facing to change the money, depositing, and lining up in a queue for withdraw in ATM's. It should be avoidable and notable to think before this act passes. One of big shocking news was, government was often introducing new different rules over here. Many changes made by the government were made day by day. It was a critical moment happen so far. Some of them were reducing due dates for changing old currencies, reducing cost of withdrawing money from the ATM and bank, and recent news were targeting on purchase of gold's.
    Even bankers are suffering to handle their own customers and also pitching up to help other customers. It is all due to lack of changes for new currencies. There are no denominations provided in all banks. Large and small retailers were suffering to save their customers. Till December 31st what are the changes will come into act and who are all will be targeted is still questioned.


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