India might not be ready yet to completely transition to a cashless society, but in the wake of governmentâs major demonetization push, much of the country is quickly learning to pay from their smartphones.Â
In the light of the announcement, mobile wallet apps have been reporting astronomical growth in usage and downloads in India. The market leader, Paytm, has gone ahead to break a few noticeable milestones. It announced this week that more people are now using its online payment platform than all the plastic cards usage combined.
Last Saturday, Paytm handled over 7 million transactions that amounted to more than Rs 1.2 billion ($17.5 million). In comparison, debit and credit cards account for over 6.9 million daily transactions, according to data provided by the Reserve Bank of India (RBI) in August 2016. (Plastic cards have likely seen a surge in their usage, too, but updated figures arenât available yet.)
The Indian government invalidated Rs 500 and Rs 1,000 currency notes earlier this month. The sudden shortage of cash has impacted the lives of hundreds of millions of people, with snaking queues outside banks and ATMs becoming a norm.Â
Paytm, much like its local competitors MobiKwik and Ola Money, has been cashing in on the sudden cash crunch in India. Paytm’ss parent company, One97 Communications, today announced an app-based point-of-sale solutions (POS) that enables small merchants without card swiping machines to accept card payments directly on their phone.Â
Paytm POS app will accept all debit and cards with zero transaction fee till the end of the year. Paytm founder Vijay Shekhar Sharma said he expects to see over 10 million Paytm POS downloads by the weekend.Â
Paytm is also poised to surpass the number of point of sale terminals across India with its new POS app.
If that happens, Paytm will also surpass the number of point of sale terminals across India. The country has roughly about 1.5 million card machines. “There are about 550 million people with debit cards in India. We just don’t have enough POS machines. We expect about Rs 300 billion ($4.3 billion) gross transaction value on Paytm platform by the year end,â Sharma said.
The RBI today doubled the limit for the money people can keep on these e-wallets from Rs 10,000 ($150) to Rs 20,000 ($300) every month. It’s a welcome development for many in India. Prior to this, many had to either juggle between multiple mobile wallet apps, or be content with the $150 limit.Â
Even small-time merchants will now be able to transfer up to Rs 50,000 ($750) to the bank account linked with their wallet every month, hence encouraging them to use digital wallets at a time when cash is hard to come by.Â