74% believe that demonetization has led to a cashless society: Post-demonetization study by Velocity MR
Marking the third anniversary of Demonetization on November 8th, Velocity MR, a leading market research analysis company announced the results of their pan India study to understand the impact of demonetization in the past three years. The national study was conducted among a sample size of 2,100 respondents and covered prominent Indian cities including Delhi, Kolkata, Mumbai, Bangalore, Hyderabad Chennai, and Pune.
The study highlights that more than 50% of the respondents across cities felt that demonetization has had a positive impact on our economy. Demonetization was announced in 2016 and one of the primary reasons was the huge rise in the black money aided by the high-value notes in the circulation of the Indian Economy. This by consequence led to the digitization of the economy, given that cash transactions were banned overnight and people started looking for alternative ways to make payments.
During this note-ban period, the majority of the population took a shift to the adoption of digital payment methods through E-commerce platforms/E-wallets/Mobile wallets for their shopping and monetary transactions. The study observed that PayTM, GPay and PhonePe were leading the list in terms of high recall value in the digital transaction apps.
Adds Jasal Shah, Managing Director & CEO of Velocity MR, “From being primarily a cash-obsessed economy, India’s digital transformation story is new but exciting. The evolution of the industry has been triggered by increasing internet and smartphone penetration. Pushed by increasing smartphone penetration, the launch of 4G networks and increasing consumer wealth, the Indian e-commerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion as of 2017.”
He further adds, “As digital consumer behaviours change, so should the technologies and services. To lure the consumers, the digital wallets rolled out lucrative offers and cashback to get customers on board using the payment channel. Thanks to the ease of use, attractive offers, and increased smartphone penetration. According to a report by Google and Boston Consulting Group (BCG), the Indian digital payments industry is estimated to touch $500 billion by 2020, contributing 15 percent to the country’s GDP.”
Highlights of the Study
- 81% people use E-commerce platforms and digital payment apps
- PayTM, GPay and PhonePe are the top 3 apps in terms of usage, preference and frequency of the usage. Other apps like BHIM, Freecharge and Mobikwik come in the second league of awareness, usage and preference.
- Other services like nearby deals/vouchers, games, buying gold, MF & Insurance are slowly getting into the picture
- 74% of the respondents have mentioned that Demonetization has driven the country towards a cashless society & adoption of alternate digital payment modes, e-wallets have increased over time, which is quite evident from the drastic growth of the e-wallets and other payment apps.
- 71% have stated demonetization has played an important role in curbing terrorism as it dealt a huge blow to the funding of terror in Jammu & Kashmir as well as Left-wing extremist violence across several states
- About 67% of the respondents feel that demonetization did not affect people who had black money in the form of real estate, shares, gold, silver and foreign currency.
- At an overall level, more than half of the people (55%) feel that demonetization has had a positive impact on our economy
- Major issues related to these e-wallets/UPI apps are incomplete transactions & low-speed internet, which is stated by close to 50% of the respondents.
- With the introduction to new instant credit/post-paid apps, players like Paytm Post-paid with 56% of awareness and 40% of usage, and Lazy Pay with
- 25% of awareness and 15% of usage, have topped the list of financial Apps with most awareness and usage.
- As we have observed purchase of gold, mutual funds and insurance via these financial apps are slowly increasing over time, close to 50% of the respondents invest in Mutual Funds via the PayTM Money app. The rest half mostly consists of AMC Apps/Bank Apps, ET Money, MyCAMS and Piggy