How India’s Demonetization Policy is Affecting Smartphones, Carriers and Mobile Payments

17 Nov 2016

The night of November 8 was huge and path-breaking in defining the economic reforms and curbing corruption in the largest democracy of the world. The country demonetized two of its biggest currency notes that comprised 86% of the total liquid currency. For a country fighting desperately against money hoarders’ black money and corrupt people, this is a very major or I should say a brave step.

What is Demonetization?

To put the term demonetization in simple terms, I say that it is an act of stripping a currency unit of its legal status or legal tender. Generally demonetization is done whenever there is a change in national currency. Under this, the old currency notes are retired and are replaced with the new units.

Moreover, demonetization can be a vital weapon for a country looking for major economic reforms and stopping forgery, wrongdoing and malfeasance related to money. It can also matter a lot more while dealing with bribe and illegal trading across and outside the country.

This was seen recently in the European countries when they adopted Euro as their main currency and now, a Nation of 130 billion people has taken this gigantic yet utterly necessary step for the betterment of the country.

Before getting on the more technical front, let us have a look at the impact which demonetization has on a more general yet important basis.

Impacts of Demonetization

Be it Martin Luther King Jr., Mahatma Gandhi or to the very recent Barrack Hussein Obama, every new beginning had its share of pros and cons. The same criterions apply here on the decision of demonetization. But, as we head only towards the positive things, here also we’ll concentrate on the sunny side.

The entire business structure will undergo significant changes and would swipe of some of the ill-social or anti-social businesses totally. GDP and tax collection will rise immensely and due to large tax collection, demonetization can bring down the tax rate for the common man. Un-wanted expenses that were done with the ill-mannered money can be minimized to a great extent and help in the emergence of a society that as a fair standard of living. Channelized crime inside and out of the country would end because of lack of funding.

The decision of demonetization might have initially paralyzed the economy, but has been the catalyst and a much needed fuel that will ignite the mobile payment ecosystems. Amidst economic transition that a developing country like India is facing right now due to demonetization, mobile payments can prove more than handy to minimize the chaos and bring stability to the money flow.

So let us hit the nail on the coffin and take a detailed look on how mobile wallets will be the new bank for the common man and equalize the doldrums caused due to demonetizations.

Mobile Wallets: The Rescuers

When a developing country like India goes through economic reforms or takes major step for the betterment of the country related to money, it’s the digital wallet or the mobile payment system that come to the fore and helps in setting the topsy-turvy ride straight. Mobile wallets are the secured payment methods with a wide range of payment options so that the users can complete the purchases easily and quickly.

It is needless to say that at the time of demonetization, the mobile payment processing companies have to deal with a hell of traffic as there is an immense spike in downloads and usage. Stats also show that, during the recent movement of demonetization in India, mobile wallet biggies like Paytm and Mobikwik had a 435% and 15x rise in their total business respectively.

They (mobile wallets) can be the apt ally in dismantling the synchronized channel of the money hoarders and bring back that money in-flow throughout the country. The cashless economy can prove handy in channelizing the view of digitization and help the common man to withdraw or use that money anywhere. Be it in the educational institutions or the hospitals, with the help of mobile wallets the users can transact money instantly and can reduce the mishaps to a major extent. The patients doesn’t and his/her relative will not have to wait in long queues or cash counters depositing the money or a student will not have to wait to continue his studies due to cash crisis.

Some of the major reforms can be seen in the banking sector as well as in the real-estate firms. With money directly transferred and withdrawn using the digital medium, the chances of cash getting stolen or misplaced is almost nullified. In the real-estate sector, builders and buyers can deal their money terms online and would have a much secured and ordered transaction every time.

A major example of Digital Money and all-round digitization can be found in a village near Ahmedabad in the state of Gujarat. A village name Akorda in SabarKantha district of Gujarat was adopted by ICICI bank last year under the country’s Digital India program is functioning in a hassle free manner in the situation of the so called cash crisis.

So, if a village can be largely benefitted by the mobile wallets, just image the positive impacts that the mobile payments would have in major cities with immaculate internet and many other facilities.


We are not done yet folks!! Let us get in flow with some of the other major possibilities that could turn into reality with digital money and mobile wallets.

  • Mobile Payment programs are relatively inexpensive and do not require any kind of major technical assistance or knowledge for implementation. They are immensely helpful for new businesses or naïve startups that are in need of quick money to get their business rolling. Moreover, they don’t require large infrastructure for functioning and thus provide the best possible threshold energy for the initiation of money inflow.
  • They have the ability to generate loyalty among the customers with their attractive incentive programs. For example, during the time of demonetization, the mobile wallet provides lucrative offers to cash exchange or going cashless so that the customer will not have any problem with the scrutinized money that he/she has.
  • With the advancement of technology, this cashless money transfer system has reached even the remotest of places so that there is no hindrance to business deal or money transfer anywhere. Also, companies and organizations can track the product and services they are selling to the customers and by that can keep in constant touch with their demands and suggestions. Also with the plethora of options provided, mobile payment system will enhance the checkout experience of the customers.
  • As the process of mobile payment involves money, the two foremost things that the users would look in is the convenience and the security issues. Both these concerns are resolved nicely as the mobile wallet devices provide a seamless payment process anywhere and anytime with the devices connected with internet. Also with multiple security layers, the documents and the updates related to the money transactions would be watched with a closed eye and has a scrutinized encrypted layer over it.


Demonetization should not be looked as a road block but should look at the broader picture as in correspondence to any country’s economy. Instead methods like digital payments should be increased so that customers get fair and quick results of their hard earned money and even during such a crisis the day-to-day life goes on as usual. Mobile wallets can be a boon for people with less or no cash strangled at an unknown place as they provide multiple payment options and credits that can be used as money as and when needed. In addition to this, mobile payment options could be formidable in reforming the economic situation of any country and give the idea of digitization a huge and comprehensive boost.

Pratik Gothaliya

Pratik Gothaliya is the Founder and CTO of Quest Infosense, A web & Mobile app development company. Pratik has accomplished over 9 years of experience in the software industry. Being an integral part of the company he assures uncluttered functionality for service or products development to clients. he promptly stands with unparalleled accomplishment for his clients and people.


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