Impact of India's Demonetisation Policy on Digital Payments Uptake One Year Later

Strategy Briefing

About This Report

Mar 2018

"Demonetisation in India was declared on November 8th, 2016. All the existing Rs500 and Rs1,000 notes were banned by the government of India, which caused an acute shortage of cash flow in the economy. With the help of this deck, we will highlight what was the impact of demonetisation on payments after a year of it being implemented, and how digital payments and connected consumerism led the change regarding the payments landscape in India".

Want to find out more about this report?
Request more information
Why buy this report?

Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

Your Recently Viewed Reports

Impact of India's Demonetisation Policy on Digital Payments Uptake One Year Later

Payment wallets emerge as an acceptable form of payments in 2017

Demonetisation was declared in India in November 2016, which expedited the process of making payment wallets more common. However, four months after demonetisation, when cash returned back to the economy, the use of payment wallets continued to remain a popular mode of payments, especially for small ticket purchases.

Despite the popularity of cash, technology became an intrinsic part of payment services in India, which in turn drove the growth of wallets in India

One of the most distinctive changes in the retail and payment landscape in India in the last five years has been the growth of online channels. The change occurred slowly and steadily from 2012, with the help of growth of smartphones and internet availability across the country. Availability of internet became even more common when Reliance launched free 4G SIM cards, which made high-speed internet availability even more common across the country.

The war between cash and cashless payments was driven by payment wallets to a large extent for the latter

Cash continued to be the primary form of payments in India, even in 2017. However, the concept of cashless transactions became much more common and acceptable as a payment methodology. However, this phenomenon was primarily limited to metropolitan cities only, but the use of digital wallets became much more common across all socio-economic classes. This was vastly different from card payments, which were still primarily driven by the mid to affluent sections of the consumer base.

Key findings
Evolution of electronic payments
Electronic payments along with cards will grow faster than cash
Demonetisation fuels growth of electronic transactions
Digitalisation of payments met with infrastructural challenges
Growth of m-wallets will be driven by increased use of smartphones
Impact of demonetisation was not significant after a year
Delving deep into the poster company for payment wallets in India
PayTM has become synonymous with mobile wallets in India
Different services provided by PayTM
Competitive landscape within mobile wallets
Challenges for digitalisation of payments
What lies ahead for digital payments ?