Cash-less Drive and Mobile Multi-swipe Devices
By: Amit Bhushan Date: 24th Dec. 2016
The Demonetization has brought a sense of urgency to the Cash-less drive in India. The politically difficult initiative needs to be bolstered with drive towards Cash-less, so that the population can feel that some move is on towards greater compliance by businesses and improvement in convenience for the masses which hitherto had only cash as their option. It might be noted that because of cash based transactions, there was literary no record for the economic activity that were carried out by such masses and there were excluded from meaningful participation in credit markets which could have been of at least of some help to grow their activity level and further develop capabilities. There present cash-less drive still is about shifting some of the cash transactions to electronic deposit transfers, however fails to convey full benefits that are likely to the small businesses who have been pushed into cash-less on account of demonetization. It was already pointed out on 9th Nov.16 that for demonetization to be driven home, it has to be on the back of Cash-less ( http://www.managementparadise.com/article/9019/the-game-got-interesting ). In so far as the netas in government can keep focus of cash-less, they may be able to push their respective envelop forward, however harping on demonetization would see them wanting on account of lack of preparation. The market of such cash-less transaction devices already seem heating up as new players announce their launches. Then off course we have different languages markets as well since a larger plethora of masses are much more comfortable only in the vernacular. So these devices should also be able to support language preference of the mass users and have ability to take input communication and deliver output communication in their preferred languages. A rise is technological capabilities is perhaps the answer along with rapid enhancement of the digital infrastructure to support such transaction. Suitable incentives and dis-incentives based on taxation might help prepare a suitable ground for the rapid adoption. The challenges like hacking, bugs or glitches will need to be addressed on an ongoing basis and an alert media would perhaps be of help to shape consumer choices. Regards the obstruction politics, it would subside as the demonetization is deemed completed perhaps by 2nd or 3rd week of January, although some of the vested interest would continue to keep floating balloons at sight of any possible trouble or political opportunity.
What India would perhaps want to see is rapid rise in Mobile App based Multi-swipe machines which are capable to process payments to be received from a variety of cards and wallets. Suitable mobile based hardware alongwith a capable software application would see a host of Gas cylinder suppliers to Cash on delivery courier personnel collect these transfers in a secured manner. Many small shop-keepers would be empowered as well. What may also be needed is ability to make authenticated payments using such devices so that multiple beneficiaries can be paid as well in their card/wallet accounts. This would perhaps ensure that the Milk collectors, honey/farm/forest produce collectors would be able to be empowered on the go including possible kabadi-wallahs. However apart from technologies which is rather a smaller challenge, its distribution to reach the entire length and breadth would be required which is where the real test may lie. Then it would need suitable incentives and dis-incentives based on taxation to alter behavior including the promise of credit to grow the economic activity of the small businesses carried out by the ‘masses’. So far the demonetization drive has allowed for, is perhaps the netas can think big initiatives. However for any initiative to be deemed as a success and leaving some legacy, it is necessary to be deemed as successful as well. Without cash-less, demonetization alone would perhaps fail miserably on this count, and the opposition would mount political challenges which is their rightful duty, give the scale of disruption and continuance of chaos. If the cash-less drive attempts to defang such criticism, the promise of credit on the back of cash-less transactions, help reiterate the new paradigm. The growth in government coffers on account of improved tax base would allow government to fund such model till it becomes self-sustaining which should be within 2-3 years. The true test here may be to overcome these in the medium term (as it is the challengers who may perhaps succeed in the short term) and lay out a new normal. The political will to see through all this and overcoming challenges over the medium term would have its rewards although the path would not be entirely without challenges.
There already have been enough ideas floated including by these articles.
http://www.managementparadise.com/article/9073/incentives-to-government-departments-for-cash-less
http://www.managementparadise.com/article/9094/businesses-reluctance-for-cash-less-payments
http://www.managementparadise.com/article/9096/the-new-curbs-on-old-notes