The demolition of 500 and 1000 currency note by Prime Minister Narendra Modi is welcomed all over the country and industries are optimistic that it will definitely increase India economy’s quantum and will help in curbing the unaccounted cash. In the last few years Indian E-businesses is seeing the greatest improvement (55%) in generating new revenues as a result of digital transformation. This bold decision and major blow on fake money, corruption and black money is affecting common people as well as running businesses. So how does it affect online business and digital space?
E-Commerce sites have stopped Cash on Delivery (COD) option: India is cash driven country and as per a major firm it is estimated that by 2018 $8billion will
India is cash driven country and as per a major firm it is estimated that by 2018 $8billion will be handles in the form of cash by e-commerce companies. COD is the major phenomenon for transactions followed in E-Commerce and with this major change in currency E-commerce might see a dip in business but not for long until the new notes get into circulation.
Major E-commerce companies like Amazon has removed the option of COD. Sites like Snapdeal has also put a message on their website reminding people that Rs. 500 and 1000 notes will not be accepted. Flipkart on the other hand like Amazon has disabled COD option. These major actions clearly shows that next few days will be difficult and quite inconvenient with buyers thinking of how to pay for their deliveries with 1000 and 500 notes vanished from the market. Business also will be impacted as a large part of the orders come from Tier 2 and 3 cities and small towns where COD option is preferred.
Wallets business will rise:
With the major transactions shifting online, wallets like Paytm, FreeCharge, Oxygen, among others will be seeing soaring profits with people using it for food, cabs, shopping etc. Some of these wallets have tie up with kirana and other local shops to make payment easy for both retailers and common man. Online transactions will be at its peak, credit card balance in each one’s card will also soar. This move to curb the parallel economy will encourage digital, paperless and online transactions. The move will affect the common man for a brief duration; however, it will bring a revolution in the digital payments ecosystem, urging people to come online.
To conclude, we at NextWebi would like to see both the positive and negatives to this legendary decision to remove black money from our country. E-commerce companies are bracing for a period of uncertainty and low business over the next few days. As a whole this step will help towards a cashless economy, bringing transparency and convenience for every citizen and first step towards a dream for digital India.