Narendra Modi's announcement to curb black money by making Rs 500 and Rs 1000 notes illegal overnight has caused the digital payments industry to jump up with joy. The elated group which has been forever engaged in a tough fight with cash in their efforts to promote digital transactions sees this as a big boost to their opportunities.

1. wwww.etailingindiaexpo.com
Digital payments and wallets companies rejoice Narendra Modi's historic decision
Narendra Modi's announcement to curb black money by making Rs 500 and Rs 1000 notes illegal
overnight has caused the digital payments industry to jump up with joy. The elated group which has been
forever engaged in a tough fight with cash in their efforts to promote digital transactions sees this as a big
boost to their opportunities.
#DigitalErra Thought Corner
PM Narendra Modi’s announcement of demonetizing the INR 500 and INR 1000 currency notes could
rewrite a new story for the financial ecosystem of India beginning from today.
Digital Payment Boosts
The biggest gainer to have come out of the unfolding news include fintech startups providing wallet
services – Paytm, Mobikwik, My Airtel, Oxigen, PayUMoney, Freecharge,Mobikwik, Momoe etc. The
boost will also benfit established financial services providers who have joined the online wallet
bandwagon including SBI Buddy, Citi Masterpass,ICICI Pockets,HDFC PayZapp/Chillr, Axis Lime
among others.

2. wwww.etailingindiaexpo.com
"We welcome this extremely bold and much needed step by Prime Minister Modi and the government to
cure us from disease of cash in our society. I along with Payment Council and India greatly admire this
move and provide our full support," said Naveen Surya, chairman, Payments Council of India.
The demonetization is a huge support for moving towards a cashless economy. Inducing a technological
change was always a tough task for wallet players, but such a unique situation will provide them with an
unprecedented opportunity to modify consumer behavior and make them feelmore comfortable with
using online wallets.
Wallet collaborators such as Ecommerce,hyperlocal, cab aggregators, food delivery services and many
others will also face a tide of incoming orders that will be swept away from traditional retailers only
dealing in hard cash.
Implications on Startups
Startups can expect more foreign investor funding as the investors can get more bang per buck due to
rupee appreciation. However,rupee appreciation carries its own disadvantages as well. Most exporters of
products and services will earn lesser on the same products they sell. Companies like Freshdesk,
Appointy, Grey Orange will need to reconsider their financial strategies to weather the oncoming storm.

3. wwww.etailingindiaexpo.com
The move will further augment the organized segment of the industry. Amit Sachdev, the Co-founder and
CEO of CoinTribe, “With limited tax arbitrage between the organised and unorganized segments, India
will see a much sharper move from unorganized to organised segment.”
Use of digital currency will pave the way for a faster evolution of fintech companies in India especially in
transactions and Online lending space. Similarly online jewellery startup will get a power boost as many
people will try to convert their unaccounted wealth into gold. Also online tax payment platforms like
TaxSmile, Quicko, RTINation, and Tax2win will get more customers for filing tax.
Unified Payment Interface (UPI) Push
UPI will have a major part to play as a digitalization accelerator in the process of becoming cashless
economy.
Dewang Neralla, CEO of payment services provider Atom Technologies, shed light on the decision in the
wake of the UPI push. He stated, “It is going to be a big plus for pushing digital payments in India, which
we would see increase manifold in days to come. People will start using digital channels for small and
micro payments.”
Decrease In Cash on Delivery (CoD)

4. wwww.etailingindiaexpo.com
E-commerce companies can expect some uncertainty in business over the next few days, given that a
significant number of their purchases happen through cash-on-delivery (CoD). All companies are
unanimous that this will help them reduce CoDs and improve margins over the long term. The proportion
of CoDs varies from 80% for some to as low as 0.5% for a few others.
"We expect the business to slow down for a few weeks. As for the long term, CoDs will decline faster and
(this) will have a positive impact," said Shopclues co-founder Radhika Agarwal.
Sujayath Ali of online fashion company Voonik and Lenskart founder Peyush Bansal shared similar
sentiment they, “Nearly 75-80% of Voonik's sales are CoD."Prepaid (or card transactions) is better unit
economics, but since we have a higher (share of) CoD, this will have an impact in the short term," Ali told
TOI.
The decrease in CoDs will push for more online payments which will bring more efficiency in
terms of cost-per-delivery and make online payments more acceptable to newer and existing
users. The future looks optimistic in for what might be the boldest move from this government
to date.