With India is embarking into digitization, the cashless economy to get an extra boost by the government’s decision of demonetizing high values notes. The rescuer is your own smartphone. As in China where paying through smartphones have become an order of the day, India too can emerge as an economy where money transactions can happen over smartphones.
“While India is implementing the government-led de-cashing via demonetization, China is experiencing a rapid market based de-cashing process via the digitalization of transactions on the online or mobile payment platforms,” an article in the state-run Global Times said today.
In China on the day of 11 November, consumers spent 120.7 billion Yuan (USD 18 billion) on Tmall, which is one the largest B2C shopping websites in the country. All transactions were settled via Alipay – the online payment system by Alibaba Group.
“Meanwhile, Alipay and WeChat Pay (the online payment platform of WeChat by Tencent) are widely accepted by restaurants, shops and even grocers throughout the country,” it said.
China already has a high rate of smartphone users and it is easy to explain why the country can depend on the smartphones based money transactions. A recent study by Pew Research Center said that 58% of phone-users in China do already have smartphones while and 37% Japanese population using phones do already have smartphones.
“This high ownership rate plus a relatively slow growth rate in credit card ownership has led to the ‘leapfrog development’ of de-cashing in China,” the article said.
“Compared to traditional bank transfers, online payment systems are usually more convenient and user friendly. Hence, market-based de-cashing faces much less resistance than other types of de-cashing,” it said.
“India is currently the largest growing market for smartphones and it is estimated that the number of smartphones sold in the country is very likely to be greater than 100 million in 2017,” it said, pointing to high sales witnessed by Chinese phone makers like Xiaomi.
“If India would like to try the Chinese style of de-cashing through online/smartphone payment, it is very likely to be beneficial to both countries,” it said.