The recent demonetisation move by PM Narendra Modi has resulted in a sharp rise in the use of online payments. Leading digital wallet player Paytm claims that it has witnessed 700 per cent increase in traffic, resulting in five million transactions per day, while MobiKwick has reported a whopping 2000 per cent spike in its traffic and almost 20 fold increase in overall transactions since the announcement was made by the government.
The masses, including small business vendors, are lapping up cashless payment options in the hope to tide over the present cash crunch, which according to reports is going to last for some time. Given the scenario, the critical question to ask is: are digital wallet companies equipped to sustain the current rush of customers and more importantly, what steps should these companies undertake to ensure new customer engagement once the cash crunch situation is resolved.
Highlighting how the age of digital wallets has finally come to bloom and how digital wallet companies were prepared for such a situation much before the demonetisation move was initiated by the government, Nitin Misra, Senior Vice President, Paytm, says, “While the demonetisation has led to a surge in Paytm’s traffic over the last couple of days, we have been scaling our systems for over a year to serve half a billion consumers by 2020. Hence we were fully prepared to tackle the current rush of customers. As far as engagement goes, for the last year we have been aggressively expanding our merchant network and as a result, Paytm today is accepted literally across every user case. We have also set bolder targets in merchant acquisition, and are aiming to reach over 5 million merchants by the end of the fiscal year.”
Experts believe that the present cash crunch situation will provide a big boost to cashless transactions, especially involving online and mobile platforms. Commenting on how digital wallet companies will redefine their status in the Indian consumer market, Harish Bijoor, Brand-Expert & Founder, Harish Bijoor Consults Inc., says, “The future is digital. As everything from entertainment to education to money goes digital, digital wallet companies will need to re-define their status in the great Indian consumer market. What these companies have achieved thus far must be treated as beta stage offers. They have established platforms, have been running after customers of the B2B and B2C kind, and have been able to manage traffic or a particular order to date. Post Prime Minister Narendra Modi's masterstroke on demonetisation, which I call a 'Modistroke', the opportunity for digital wallets is bound to boom. If you were carrying traffic of X, expect that to be 200X if not 2000X! That is the kind of preparation that these digital wallet companies need to have made to date.”
While India has attempted its big push from a cash only economy to the intended cash free economy, in the course of this big jump the online wallet game is about to witness a new turn. Summing up the road ahead for the digital wallet players, Bijoor adds, “The true-blue digital wallet game is about to begin. And guess what, this is true for credit cards, debt cards and card companies of every kind that believe in electronic transfer of funds from point to point.”