Electronic Payments Seize The Moment in India

Just over a month ago, India’s Prime Minister Narendra Modi made an announcement that took most Indians by surprise – on a Thursday, he took to the airwaves and declared that effective at midnight that night, all 500 and 1000 rupee bank-notes would be taken out of circulation. The move, rendering close to 90% of cash in circulation useless, was aimed at combatting corruption. While new, redesigned notes will eventually be issued, the vacuum created by the sudden announcement has thrust electronic payments into the forefront of Indian commerce.

In the past month, PM Modi’s move has illustrated the vast opportunity present in India’s digital payments marketplace. India is the world’s second biggest smart phone market, with 220 million users. But, with a population of roughly 1.3 billion, that still represents less than 30% of potential users currently able to access to the Internet on their mobile device.

As recently as July, only 7% of Indians were active mobile wallet users according to a study from the Boston Consulting Group and Google. Following the November announcement, mobile payments companies such as MobiQuick have experienced a significant increase in transactions processed. According to The Wall Street Journal, MobiQuick founder Bipin Preet Singh said, “If we continue at this pace, within a month or two we will have made more progress than since our inception [in 2009]. The government is creating large-scale awareness and basically doing advertising for us.”

In fact, PM Modi himself said in a late-November tweet, “Time has come for everyone, particularly my young friends, to embrace e-banking, mobile banking and more such technology.”