The Indian government is determined to spread financial inclusion by ensuring banking services are available for all.
The Reserve Bank of India (RBI) issued licences to 11 companies in 2014 to operate as payment banks and of those Airtel and Paytm have started operations. More recently, India Post, which is a government-operated postal system, got the nod to operate as a payment bank.
Efforts by both the government and the RBI over financial inclusion through mobile phones will help more consumers adopt m-banking and commerce in coming years.
While consumers are getting habituated to using apps, many private players including e-commerce companies, banks, and individual mobile wallet companies are offering payments, shopping, bill and peer-to-peer payment services with huge discounts and cashback offers in order to woo and bring consumers on their platform.
Reluctant small merchants trying to hide income to reduce their tax bills might act as a deterrent to the growth of a cashless economy. However, such merchants are already suffering from declining consumer attention and will likely quickly adapt to the new world.
Age-old cash habits could act as another deterring factor, especially now when cash is back in circulation and the effect of demonetisation is fading.
Both government and private players should keep consumers motivated to use cash-alternative payment instruments.
The Indian government has already announced a series of incentives from free insurance to discounts on digital payments which will continue to boost consumer motivation to become and remain cashless.
Priyanka Bagde is a Survey Analyst with Euromonitor International
You can read Euromonitor International’s full article HERE