According to the World Payments Report 2018 by Capgemini, the demonetisation exercise by the ruling government actually boosted global e-payments growth by one percentage point more than what was expected. The report also noted that India is all set to become the ninth-largest country in terms of non-cash transactions in the next two years.
The report indicated that electronic payments growth is significantly high in India at present. India is expected to overtake Canada and Australia in terms of electronic payments in the next two years. The report stated that the developing markets witnessed a growth of 16.5% in digital payments driven by higher adoption of mobile payments and better financial inclusion.
Following the demonetisation program announced by the government in November 2016, India has witnessed a 33.2% growth in non-cash transactions. The highest contribution towards non-cash transactions came from debit cards, which witnessed a 76.2% growth during this period.
In terms of digital payments growth, India’s growth was second only to Russia, which witnessed a 36.5% growth in electronic payments. China took the third spot with a growth rate of nearly 26%.
With higher financial inclusion, various digital payment modes also witnessed a significant growth. There was a 38.1% growth in credit card volumes in the year 2016 compared to a growth rate of 27.8% in 2015. During this period, transactions conducted through mobile wallets witnessed a growth of 75.5%.
The ruling NDA government announced the demonetisation of Rs.500 and Rs.1,000 currency notes on November 8, 2016. The government also introduced new Rs.500 and Rs.2,000 notes in exchange for the ones taken out of circulation. Many experts have criticised this move stating that it did not contribute much towards to the country’s economy. Many critics even say that this has slowed down the economic growth of the country.
Source: Financial Express