The recent government ban on the INR500 and INR1,000 currency notes has been received with mixed reactions from the different sections of the society. The move is taken by the government in an attempt to curb black money hoarding as well as the growing menace of fake currency notes. The government has also taken steps to ensure that the currency exchange takes place as smoothly as possible in appropriate time. However, this is also a golden opportunity for Indian consumers to adapt to the innovative mobile banking technology, which is seen as the future of financial transactions.
Indian PM Narendra Modi, in his recent speech in Bathinda also announced the need for people to turn to cash-less mobile banking for efficient and safe monetary transactions. While pointing out the immense mobile smartphone usage in India, he advised families to use their mobiles to make payments for a variety of services and products to avoid using cash.
Indian B2B Industry post-Demonetization
This demonetization has also turned a new page for the Indian online business and many conventional business-to-business services as well. As is, the Indian retail and daily needs industry were slightly affected due to a shortage of cash with consumers in the beginning, however, with faster adaptations to non-conventional payment methods.
For businesses offering B2B solutions, this situation has not resulted in much change. Leading industrial companies in India are largely dependent now on cash-less payment methods seeing the immense benefits gained from this. The demonetization may have certain sectors of the Indian industry, however, as a majority of such companies were already engaged in cash-less transactions, the recent currency ban has not affected the B2B industry in all.
Growth of Mobile Banking in India
Mobile payments in India gained popularity mainly in the metropolitan cities initially. However, it is slowly becoming more adapted to in the semi-urban regions as well. As the banking and mobile payment companies are focusing more on KYC to help increase the transaction limit from the present INR10,000 to INR100,000 at least.
According to estimates, the current mobile banking usage in India is around 14% and is expected to rise to more than 30% with the recent demonetization move by the government, by the end of this decade, in 2020. The report pointed out to several factors that are set to drive the mobile banking usage in India to an all-time high.
Some of these important factors that are estimated to contribute towards the growth in popularity of mobile banking in India are the increasing penetration of mobile smartphones (from the current estimated 290 million) and the growing popularity of online shopping and other online cash-less payment methods, such as digital wallets, mobile payment agents, etc.
Increase in use of non-conventional and cash-less payment methods by companies in India
With the increasing economic power, Indian industries had started to rely more on cash-less methods of money transaction, such as NEFT and RGS a long time ago, and had ditched the conventional payment methods of cash and cheque. Leading companies in India are today relying increasingly on these better and faster cash-less payment methods for doing business today.
The NEFT and RTGS payment methods are more efficient and safe compared to other conventional large-scale bank transaction method. These allow companies to make due payments in large amounts.
These factors have already combined to give the Indian industry another boost towards adapting more of the efficient and cash-less payment methods. Apart from this, the increasing popularity of smartphones in the country is also set to help enhance the use of non-conventional mobile banking payment procedures in India to cope effectively with the recent currency ban.