There has to be hard work and persistence to anything you do in life
November 8, 2016
To succeed in business, you need to take care of all stakeholders
November 15, 2016

The power of digital money



The demonetisation of Rs. 500 and Rs. 1,000 notes by the government of India is a great move to flush out black money. That move, while laudable at the vision, has also resulted in hardship for the middle class.


One look at the serpentine queues outside banks and ATMs shows the desperation of people to get hold of paper money to carry on with their daily lives. It is at these times of hardship that one begins to truly appreciate the value of digital money. I have noticed that people who have access to credit cards and digital money accounts like PayTM or Freecharge were able to go about their daily businesses without any hardship at all.  That’s because, pretty much anything that you want to buy or pay for services can be done through digital cash.

It’s no wonder that services like PayTM and Freecharge had quintupled their usage and registration ever since the ban of the higher denomination notes came into account.  It was fascinating to see how the full page advertisements in newspapers saw the real estate ads get replaced with these digital money services.
For many people, especially those who are not used to e-commerce or online payment transfer, this time of paper money crunch would have forced them to try out the digital money providers. I’ve noticed that when people try these for the first time, they realise how easy it is to use it. Finland, the country that first introduced the concept of currency notes in 1661, now finds less than 3% of its economy and transactions are done using paper notes.  I foresee a similar situation in India very soon. In fact, much sooner than we think it is.
This is mainly due to the widespread adoption of smart phones and wide access to good Internet connectivity.   Most people think that the digital money usage will only be prevalent amongst people in the metros.  This is so wrong. I hail from a village and I can tell you from first-hand experience that people, especially in towns and villages, adapt a technology quickly as long as it provides convenience and swiftness.
With smart phones coming up in vernacular languages, even the language barrier will disappear. Digital money and digital wallets will also bring in transparency in payments. I can already start seeing this in villages.
Under the MNREGA scheme which provides 100 days of employment to villagers, the money earlier was given as cash. This was ripe for corruption as the middle-men were swindling away the money.  But now, those payments are getting transferred to the bank accounts that were created for the villagers.
Right now, the villagers access their money via ATMs but with digital wallets becoming prevalent and local shops accepting these as valid payments, the adoption of digital money amongst villagers will zoom. The potential for digital money is enormous and we have just begun to scratch the surface. In my opinion, the 500 and 1,000 rupee notes ban is actually a blessing in disguise and we may see an unintended but positive side-benefit of teaching crores of people the power of digital money and what a great leveller this will be in the new digital economy.
The writer is a digital entrepreneur, professor and author of five books. He can be reached at