A month ago, the Modi Government declared that high-value currency notes such as Rs 1000 and Rs 500 denomination currency will not be a legal tender anymore. We welcome this enormously smart move by Prime Minister Narendra Modi to curb the growing menace of corruption, economic terrorism, fake currency and black money. While the initiative is far-sighted and bear a host of politico-economic benefits in the long run, the immediate effect is that of increased usage of online or digital payment platforms, including mobile wallets, owing to the liquidity crunch. Such payment methods are becoming more mainstream. The other side of the coin is- people are queuing up in front of ATMs and banks and banks are struggling to disburse new currency denominations to everyone. Right after the announcement, as an immediate aftermath, by midnight, 86% of the currency in circulation became defunct for commercial transactions.

Amidst all this chaotic scenario arising out of the liquidity crunch – unending queues in front of ATMs and banks, bank’s facing cash crunch due the unavailability of new currency denominations, people finding it difficult to purchase goods in cash, there is brewing in a distance, an exciting ecosystem of cashless economy, which mobile as its light bearer.

Right after the demonetization initiative was announced, we witnessed a rapid upsurge in the use of online/digital payments, mobile wallets and the use of the mobile or smartphone in general, for everyday transactions. India has one of the largest mobile penetration in the world and everybody, a young man to the middle aged and the old, today has a smartphone, at their disposal. For 2017, the number of smartphone users in India is projected to reach 340.2 million.

Taking into account this growing trend, even the Prime Minister is urging people to use their smartphones for utility bill payments, shopping, mobile banking and others, in the wake of the demonetization drive. He said that the number of mobiles is four times the number of families and people should use their mobiles to make payments. They should download mobile banking apps. Having hard cash in your pocket is not required anymore.

The mobile revolution had started happening quite early on. Since year 2014, rightfully defined as the ‘year of the mobile’, till today, ecommerce and mcommerce has been witnessing increased traction and the magnitude of this traction burgeons at a blitzkrieg rate during the festive season. Interestingly, much of this traction comes from the Tier 2 and Tier 3 cities and towns. We strongly believe in the fact that mobile is the future of commerce in India. Mobile technology is revolutionizing the tier 2 and 3 markets. Half the shoppers in tier 3 cities are already on mobile, as compared to the one third from tier 1 cities. Cheaper smartphone technology, lower tariff rates and the growing range of connectivity in Indian towns seem to be the driving force in the domain of mobile commerce. Though it is true that outside India’s big cities, cash transactions still reigns supreme- this is bound to change given the intense liquidity crunch, and ATMs and banks fast running out of cash.

Experts predict that as demonetization increases the use of electronic and bank-based payment systems, it will make record-keeping easier and more common, allowing government better to track and tax the proceeds.
In order to deal with the cash crunch arising out of demonetization, the Modi Government urged people to download mobile applications provided by banks on their phones and also requested political leaders, teachers, youth to give training to people on how to use mobile banking. Encouraging people to adopt new technology in order to eradicate this peril of black money and corruption, the Government asked them to make payments through their mobile phones.

The Government clearly stated that they are doing everything possible to ensure that the common man, lower middle class, the poor, the farmers and the underprivileged are not exploited. Mobile technology will go a long way in empowering them and protecting them from India’s black money rich.

Prime Minister Narendra Modi, in an address at Bathinda said, "I want to seek your support. Your mobile phone is not only a mobile phone, you can convert into your own bank and wallet. If you don't have one rupee cash even then today the technology is such that if you have money in your bank account, you can shop in the market and make payments through mobile and also you can run your business without touching cash at all,"

The Government, since last year had also started putting in place financial infrastructures and mechanisms in the rural areas, including banking for all, etc, in order to foster economic inclusivity and fight the menace of black money, fake currency and economic terrorism. Increased financial inclusion will allow the government transfer welfare benefits directly into bank accounts and reduce corruption.