Coronavirus or Demonetization? Which One Helped India’s Digital Payment More?
The coronavirus outbreak may finally accomplish what India’s shock demonetization four years ago failed to achieve: Use of digital payments is soaring for everything from groceries, electricity bills and cab fares. The value of transactions on the Unified Payments Interface, a platform created by India’s largest banks in 2016, reached an all-time high last month as people feared to handle banknotes amid the pandemic. Electronic fund transfers from banks, which had dropped in April as economic activity slowed almost to a halt, have also rebounded.
Prime Minister Narendra Modi’s government has long sought to push digital payments for India, where three in four consumer transactions are handled in cash. In November 2016, Modi suddenly invalidated most of the country’s high-value currency notes — a move aimed at curbing corruption that would also, he later noted, help encourage a move toward digital commerce.