The amazing announcement by PM Modi on the immediate elimination of the existing 500/1000 note and the introduction of new notes of Rs. 500 and 2000 rupee notes now puts new perspective!
Kudos to our PM – a man with guts to wipe out black money! This is a landmark moment for India – SO I’M UPDATING THIS BLOG WITH SOME RELEVANT COMMENTS!
As India aims to move towards a “less cash” economy, and makes significant progress in digital payments, eKYC, Unified Payment Interface (UPI), Payment Banks, Jan Dhan Yojna, Aadhaar, etc. I’m delighted to hear the PM revoke the existing 500/1000 rupee note with IMMEDIATE effect and replace it with new notes of Rs. 500 and adding the 2000 rupee note in limited quantity, in lieu of the 1000 rupee note!
With this change, the difference and KEY BENEFIT of doing Cash Transactions over Digital Transactions will go away. Its time to switch to Digital Transactions – and get the benefits of Digital Transactions.
Its important that ANYONE who is doing a 2000 rupee+ transaction has a bank account – and therefore should be in a position to pay digitally. IMO Any retail merchant should never have to accept a payment of more than 2000 rupees in cash – because the digital forms of payment are available to all merchants who do transactions above 2000 rupees.
I find myself using less than 5% of my spends in cash these days – in India. After initially posting this blog, I checked with my wife – other than the maid’s salary (and I do intend to help her open a bank account) & milk coupons (I do plan to speak to our milkman), our individual cash transactions are rarely above Rs. 500. So going digital is really possible if one is determined to do so – especially in metros.
Ultimately whether you’re using a wallet or a bank account or a debit card or a credit card – the one thing that matters is that all your transactions are digital. No fake currency notes, no torn bills, no ATM fraud, no risk of theft, and oh yes, all the other benefits of going digital such as access to credit, etc.
If India truly does intend to become a less-cash and a digital economy and to reduce the parallel economy, we need to walk the talk. Make life with cash less attractive or convenient and life with digital money more convenient and pervasive.
There are a series of measures I have previously blogged about – like eliminating surcharge, banning transactions above 2000 rupees in cash, mandating that banks accept all merchants who want to accept digital payments, etc. With UPI there is absolutely no excuse anymore – its really a question of our will power to make the transition to less cash.
We have to invest in the transition, it won’t happen without a massive push – and that is the responsibility of the government, not the startup ecosystem – but this also means not investing in the opposite.
By eliminating the 500/2000 rupee notes in circulation, the PM and Government have shown the commitment to record all cash and link it to the owners. This is a big first step in the move to digital economy and digital transactions!
On the day of a landmark US elections, PM Modi has come up with the most significant announcement that will shape our future – I salute sir for taking this brave step. There will be some short-term pain but within 60 days we’ll all be better off!
About Sanjay Swamy
Sanjay Swamy has over 24 years of experience and has worked with organizations like Ezetap Mobile Solutions Pvt. Ltd, ZipDial, UIDAI (Unique Identification Authority of India, mChek, KETERA, mPortal, Portal Software, Xerox/ContentGuard & Integrated Systems. Sanjay holds a MS, Aeronautics, Flight Control Systems from University of Washington, Seattle.