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The novel coronavirus (COVID-19) pandemic is expected to be upheaval our society in an irreversible manner. The deadly virus has already infected nearly 8,00,000 people worldwide and claimed the lives of many, and the toll is only rising. India has registered 1,300+ coronavirus cases so far, raising alarm over the country’s ability to contain a full-fledged outbreak. However, the authorities have put in place strict restrictions including travel bans, cancellation of flights, trains and buses, and a 21-day nationwide lockdown.
India urges citizens to take the digital route
The Government of India is also urging its citizens to take certain precautionary steps to break the cycle of transmission. Among other measures, people are encouraged to eschew cash for a more sanitary option, i.e. digital modes of payment. Although there’s no concrete evidence suggesting COVID-10 is transmittable through paper money, cash is identified as a possible carrier of the virus. In a tweet, Prime Minister Narendra Modi said, “This is the time to ensure social distancing. Digital payments help you do that. Let’s listen to these stalwarts and adopt digital payments,” while stressing the importance of avoiding any physical contact. The Finance Ministry and banks, too, have been nudging people to use e-payment tools in wake of the coronavirus crisis. As such, many public and private sector banks are waving off charges for digital transactions for the time being. The Indian Banks’ Association (IBA) has also asked customers to use digital banking services and avoid visiting physical bank branches as it could pose a health risk to banks’ front desk staff.
Can India become a completely cashless economy?
The RBI’s Payment And Settlement Systems In India: Vision – 2019-2021, aims to transform India into a cash-lite economy while ensuring that the country has a secure ‘state-of-the-art’ payment and settlement system. The discussions around India becoming a cashless economy have been around a while, but the coronavirus pandemic is expected to bring a permanent shift from cash to digital payments. With new cases being reported every day, it is high time that the entire country jolts out from traditional methods of payments and plunges into the digital payment ecosystem.
Previously, a similar disruption was caused by the implementation of the demonetization. After Prime Minister Narendra Modi put a ban on old 500 and 1,000 rupee notes with immediate effect, India witnessed a sharp spike in the adoption of e-banking, mobile banking as well as UPI-based payment platforms. Demonetization of high-value currencies is still considered a major turning point for India’s digital payment landscape as it marked the beginning of a new era for FinTech in India. Today, as the country grapples with the virus outbreak, it’s anticipated that more and more Indians will take the digital route as a safety measure. Not just bank transactions, they will use e-payment solutions to pay their utility bills as well.
Of course, the challenge lies in bringing people from the country’s hinterlands into this equation, but new-age FinTech players leveraging cutting-edge technologies such as blockchain, artificial intelligence, machine learning and mobility to bring the digital payment facilities to the underserved. While the pandemic may last for months, India’s transition into a cashless economy is likely to be smooth on the back of such technology-led advancements.