DIGITISATION -- this is the new Mantra in India after demonetisation. Some describe it as "going cashless." It simply means one should increasingly use credit and debit cards, write out cheques, opt for e-wallets and choose other electronic
money transfer options in financial transactions, refraining from flaunting
cash. What is outstandingly remarkable is that it is
being advocated and promoted on a war-footing by state as well as non-state players,
despite virulent protests in some quarters. Newspaper advertisements, emails from banks
and messages from wallet promoters are exhorting people day in and day out to
go in for it.
FACTS, FIGURES AND FALLOUT
(A compilation by Subbaram Danda)
The backdrop
At present Sweden has a near
cashless economy. Its people use electronic modes for almost all of their
transactions. Next comes Denmark, followed by Belgium. Interestingly, Somalia
and Kenya are also in the race.
India currently accounts for 2.64
crore “outstanding” credit cards issued by the entire banking system, according
to Reserve Bank of India statistics. Of
these, HDFC Bank leads the pack with 79.6 lakh cards.
What is interesting is that the
number of debit cards in circulation is significantly far more than the credit
cards—many, many more times. They total 71.24 crores! Of
course, some people hold multiple credit and debit cards. This should be seen against the current
population of the country, which stands at 127 crores.
More fascinating is the emergence of
e-wallets in India in recent years. The
cashless drive has given them a shot in the arm. They
have registered phenomenal progress in recent weeks. Currently, more than a
score of e-wallets are on the forefront. They are run mostly by private organizations,
banks and mobile phone operators.
Yet, the process of digitisation
bristles with challenges. Now, as many
as 95 crore Indians or over three-fourths of the population do not have access
to the internet, which is necessary for several digital operations. This is revealed in a study made by Assocham
and Deloitte. However, the silver lining
is that mobile data plans in India are among the cheapest in the world and the
average retail price of the smartphone is falling fast.
 |
| (The statistics in the diagram pertain to credit cards. Picture courtesy: "The Times of India") |
Comments
Former Union Finance Minister P.
Chidambaram: “Cashless India is an illusion. It is a distracting mirage.
It may not even be a desirable goal.”
Union Finance Minister Arun
Jaitley: “Digital payments constitute a
parallel mechanism, but not a total substitute for cash transactions. The
Centre is trying to encourage digitisation because an excessively
cash-dependent economy has its social and economic costs and consequences.”
“The
Hindu BusinessLine” in an editorial:
“The Centre’s push to promote digital payment is a welcome move…. (But
at the same time) the threat of cyber attacks — by both state and non-state
actors — is a reality the Government needs to acknowledge even as it
aggressively pushes digital payments over various platforms.”
“The Times of India” in an editorial: “To curb
black money at its root, make all political funding cashless and digital.”
Columnist Amit Varma in “The Times of
India”: “A cashless society would be a disaster for India. It would mean end of
privacy and end of dissent… It endangers
freedom... It is a myth that an advanced society must necessarily be
cashless. Even in the US, 45% of
transactions are in cash.”
Former Chairman of the Central Board of Direct Taxes Sudhir Chandra in a report in "The Hindu": "Those who are above the age of 50 don't have the propensity to pay by cards. They normally pay even restaurant bills by cash...."
Former Chairman of the Central Board of Direct Taxes Sudhir Chandra in a report in "The Hindu": "Those who are above the age of 50 don't have the propensity to pay by cards. They normally pay even restaurant bills by cash...."
Allurements
Private and public sector players are
on an overdrive offering a plethora of incentives, concessions and inducements
to people in a bid to encourage them to switch over to electronic modes of
payment. Sample the following:
ICICI Bank is drawing the attention
of its customers to its special “Expressions Debit Card.” Printed on it will be a photo of them
reflecting any precious moment in their life so that they can re-live it at
every use of the card.
In a full front-page newspaper advertisement,
a leading e-wallet company FreeCharge has highlighted one of its unique
features: “Even if your phone is lost, your FreeCharge wallet balance is safe… It is now insured upto Rs.20,000.”
A leading durable consumer goods firm
has invited its customers to make year-end purchases without hassles. It said in an advertisement, “No
cash, no worries and no service charges.
Select (your product) and swipe.”
Canara Bank has come up with pre-paid
cards of a new kind. It is issuing two
types of cards charged with limits of Rs.500 and Rs.1,000. Every KYC-compliant Savings Bank account
holder can receive five cards, which can be used by him, his family members or
associates. They can be swiped at any
shop like the credit and debit cards.
Once the amount in any card gets exhausted it can be recharged. The greatest advantage is that if it is lost,
the burden of loss will not be heavy. It
has a wider plan for corporate account holders.
In lighter vein
Though digitisation is not as
glamorous and colourful as demonetisation, it has generated its own moments of
hilarity. Some of its comical outbursts
are thought-provoking too!
Cartoon
Here is a cartoon that appeared in
the “Deccan Chronicle,” following an official offer of a variety of incentives
and prizes for people taking to digitisation more and more.
Joke 1
Members of the All India Pickpockets
Association are highly frustrated. They
have called for a rally in front of the Finance Minister’s residence to protest
against the cashless India campaign.
Reason: it seriously undermines
their birth right to earn their livelihood.
Joke 2
Vijay’s newspaper supplier hands him the
monthly bill and asks for payment in cash.
Somewhat upset, Vijay, a vociferous advocate of technology, gives a long
lecture on the virtues of keeping abreast of times and advises the supplier to
go cashless in tune with the times. Unfazed,
the supplier replies with a broad smile on his face, “Sir, that is all
perfectly okay. But, you still read a
newspaper, no?”
Joke 3
A report: The 5,000-strong Greater
Chennai Beggars’ Conglomerate has urged the Union Government to supply to every
one of its members a swipe machine free of cost, as they are in no mood to go
out of business in view of the current cashless drive.
Joke 4
The Prime Minister: “Go cashless.”
Several bank ATMS seem to have taken
the diktat literally. They have gone
“cashless.”
Joke 5
“Who are the first people to welcome
digitisation?”
“Those with Diabetes!”
“Why?”
“They know the value of a bitter
bill.”
Punch dialogues
Newspaper advertisements have been churning out catchy texts to
attract readers. Here are some of
their creations:
“Why pay in cash? You can now
pay in a flash.”
“Live more, bank less.”
“It is now electronic economy.”
“White is right.”
“Get cash worries out of your sight, as we make your bill light.”
Novel effort
An individual has come up with an imaginative idea to promote digitisation, as reported in a news channel.
An onion trader in Coimbatore, he has designed an invitation for the wedding of his daughter in the size and shape of an ATM card with all the details printed in English and Tamil! He says with a touch of pride, “My idea is to encourage people to go in for digitisation. The Prime Minister’s initiative is a bold one, which all citizens should support.”
The impact
The cashless initiative has produced
some dramatic and swift changes in the financial scene of the country.
Daman
and Die, the tiny Union Territory along the Arabian Sea coast has become the
first cashless region of India, according to a report of the Press Trust of
India. This follows the tireless efforts
of at
least 190 teams of trained volunteers visiting over 25,000 households spread
across the UT to educate their members about the benefits of cashless
transactions.
PayTM, the most visible e-wallet company,
has added over 2 crore new users in 40 days post-demonetisation, taking its
total user base to 17 crore. It is
reportedly clocking over 70 lakh transactions a day.
Several grocery stores, which were
hitherto accepting credit cards only for bills over Rs.1,000 have now put up
notices that their customers are welcome to tender plastic money for
transactions as low as Rs.200. One
famous restaurant chain in Chennai has started accepting
cards even for Rs.100. Interestingly,
temporary canteens put up in the premises of halls hosting music and dance
programmes during the annual fine arts festival in Chennai too have swipe machines.
India’s biggest milk and milk product
producer Amul has opened 5.4 lakh savings bank accounts across the country for
its suppliers. The idea is to remit
money due to them into their accounts avoiding cash payments. This is
considered “not only a revolutionary step but also a big push” to PM’s digital
India initiative.
The road ahead of digitisation is
long and daunting. But the destination
is full of promise.
December 30, 2016
