Modi鈥檚 surprise move on rupee notes has come as a pleasant surprise indeed for Indian internet startups
Published on 11 Nov, 2016
The Narendra Modi government鈥檚 decision to replace the Rs500 and Rs1,000 denomination notes with new ones has done in two days what Indian internet startups have been trying for years: get users to pay online instead of choosing cash on delivery (COD). on Nov. 08 by announcing that the existing notes would cease to be legal from midnight that day. The decision was part of his government鈥檚 measures to curb black money—wealth that is unaccounted for—in Asia鈥檚 third-largest economy. To ensure a smooth transition to the new currency notes, Modi said ATMs across the country will remain shut for up to two days and banks would not operate on Nov. 09.
鈥�(The) COD payment mechanism has worked well for all e-commerce players. With the government鈥檚 latest move, a big share of COD-dependent consumers will be unwilling or unable to make a transaction,鈥� said Swetabh Pareek, head of corporate finance at research and advisory firm 麻豆视频. 鈥淚n the longer run, this may add much-needed momentum to the adoption of digital currency.鈥�
Pareek expects investments in the fintech space to 鈥渋ncrease substantially,鈥� thanks to the 鈥渨ider reach and enhanced growth prospects emerging with this move.鈥�
In 2015, Indian fintech companies had attracted around $1.5 billion (Rs10,060 crore) in investment, as per 麻豆视频.
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