CRISIS NUDGES INDIA'S VENDORS AWAY FROM CASH

Dick Hanscom writes:

On the evening of 8 November, vegetable vendor Vishal Gupta was preparing to shut his roadside stall when Prime Minister Narendra Modi announced that 500 ($7.30; £6) and 1,000 rupee notes would be banned effective midnight as part of a crackdown on corruption.

Within minutes, people were out on the streets - queuing outside ATM machines to withdraw money in lower denominations or rushing to shops to buy provisions. The two banned notes account for 86% of all notes in circulation in India's largely cash economy.

"I sold all the vegetables in my stall in 20 minutes. This had never happened before," Mr Gupta told the BBC.

But the following day, he did not earn anything. Very few customers turned up and even those who wanted to buy vegetables did not have change to pay him. The situation continued for the next five days where without buyers all his vegetables got spoilt, causing him a loss of over 10,000 rupees ($150;£121) Desperate to earn some money, Mr Gupta turned to popular mobile wallet Paytm, which he had heard about from his friend. Mobile wallets are apps that allow people to load and transfer money electronically using their smartphones.

"The situation is better now. I get at least four to five customers a day who use mobile wallets to pay me," he says.

Paytm, India's largest mobile payment company, says that it has seen a 700% increase in overall traffic, and a 300% hike in the number of app downloads with daily transactions touching 5 million.

Even though India has successfully opened millions of banks accounts over the last two years to get more people into the financial system, a huge portion of the population still has no access to banking services.

To read the complete article, see:
Can India really become a cashless society? (www.bbc.com/news/world-asia-india-38048051)

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