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The objective of this 3 part series is to examine in brief the barriers and motivators for the key players in (the author believes it has elements that can stand true for any economy that intends to go cashless) Journey towards a cashless society (India
as a example).
As per the annual report of Reserve Bank of India (RBI) for 2013-14, the amount of currency in circulation stood atRs.12.83 trillion with a compounded annual growth rate of 10% over the past two years. About 5% of the amount is with banks. This implies that
almost the entire amount is in daily circulation, which is reflected in the Rs.32.1 billion cost of just printing the notes.
The overall benefit of migrating to cashless even by liberal estimates is 0.8 % on GDP in emerging markets.
Key players in this Journey are
Retailer (Point of Sale): In digital economies the POS terminal penetration stands between 30-50 terminals per 1000 person while in India it is .9 terminals per 1000. Arguably it can be said that the presence of POS terminals is directly
proportional in driving the business and consumer cashless (Though it does suffer from the chicken and egg phenomenon).
At the current stage in Indian economy below mentioned are the barriers and motivators which if addressed suitably can catalyse the growth in terminals.
Motivators and Catalyst’s
Clearly a switch providing interoperability among various type of wallets is observed as the biggest enabler in making it financially viable business model for the retail point of sale.
This article is written to share author’s personal opinions on the cashless journey and in no way represent the views of the organizations for which I work.
Vodafone m-pesa Ltd
22 Sep 2015
This post is from a series of posts in the group:
Payments systems visions, strategies, trends, pilots, forecasting, and planning for the short-, medium-, and far-term.