The usage of mobile wallets has fallen “drastically” after demonetisation, with e-wallet payments dropping by 40.6% in August and September, according to a study conducted by research firm Chrome Data Analytics.
“On November 8, 2016, when demonetisation was announced, nobody knew what was in store,” said Pankaj Krishna, CEO and founder of Chrome Data. “A lot has changed since. Demonetisation took away nearly 86% of the currency in circulation, creating a huge cash crunch in the economy and forcing a digital economy push.”
“However, as we near the one-year anniversary of demonetisation, cash has once again started gaining momentum. The usage of e-wallets has decreased drastically, though people continue to use them for paying electricity bills, online food chains and cab-hailing services, because of the convenience they offer,” he said.
A statement from Chrome Data said: “... remonetisation has started... e-wallets are offering big cashbacks to consumers or [are] opting to diversify to sustain the business.”
Of the 2,672 respondents surveyed in the age group of 15-30 years, 64% preferred cash to digital transactions. As much as 76% preferred e-wallets to Internet banking, and most of the respondents did not find cashbacks and discounts offered by e-wallet companies attractive.
“The wallet, in its existing model, might face challenges standing up to banks and UPI (Unified Payments Interface), especially in a country like India where having a bank account is necessary to operate a digital wallet. e-wallets are gearing up to face the challenges by providing multiple banking services to their existing user base,” Mr. Krishna said.
