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.

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Digital paymentsand walletscompaniesrejoice NarendraModi'shistoric decision
NarendraModi'sannouncementtocurb blackmoneybymakingRs 500 and Rs 1000 notesillegal
overnighthascausedthe digital paymentsindustrytojumpupwithjoy.The elatedgroupwhichhas
beenforeverengagedinatough fightwithcashintheireffortstopromote digital transactionsseesthis
as a big boostto theiropportunities.
#DigitalErra Thought Corner
PMNarendraModi’sannouncementof demonetizingthe INR500 and INR1000 currency notescould
rewrite anewstory forthe financial ecosystemof Indiabeginningfromtoday.
Digital PaymentBoosts
The biggestgainertohave come outof the unfoldingnewsincludefintechstartupsprovidingwallet
services–Paytm,Mobikwik,MyAirtel,Oxigen,PayUMoney,Freecharge,Mobikwik,Momoe etc.The
boostwill alsobenfitestablishedfinancial servicesproviderswhohave joinedthe online wallet
bandwagon includingSBIBuddy,Citi Masterpass,ICICIPockets,HDFCPayZapp/Chillr,AxisLime among
others.

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"We welcome thisextremelyboldandmuchneededstepbyPrime MinisterModi andthe government
to cure usfrom disease of cashinour society.IalongwithPaymentCouncil andIndiagreatlyadmire this
move andprovide ourfull support,"saidNaveenSurya,chairman,PaymentsCouncil of India.
The demonetizationisahuge supportformovingtowardsa cashlesseconomy.Inducingatechnological
change was alwaysa toughtask forwalletplayers,butsucha unique situationwillprovide themwithan
unprecedentedopportunitytomodifyconsumerbehaviorandmake themfeel more comfortablewith
usingonline wallets.
WalletcollaboratorssuchasEcommerce,hyperlocal,cabaggregators,fooddeliveryservicesandmany
otherswill alsoface a tide of incomingordersthatwill be sweptawayfromtraditional retailersonly
dealinginhardcash.
Implicationson Startups
Startupscan expectmore foreigninvestorfundingas the investorscangetmore bang perbuck due to
rupee appreciation.However,rupee appreciationcarriesitsowndisadvantagesaswell.Mostexporters
of productsandserviceswill earnlesseronthe same productstheysell.Companieslike Freshdesk,
Appointy,GreyOrange will needtoreconsidertheirfinancial strategiestoweatherthe oncomingstorm.

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The move will furtheraugmentthe organizedsegmentof the industry.AmitSachdev,the Co-founder
and CEO of CoinTribe,“Withlimitedtax arbitrage betweenthe organisedandunorganizedsegments,
Indiawill see amuchsharpermove from unorganizedtoorganisedsegment.”
Use of digital currencywill pave the wayfora fasterevolutionof fintechcompaniesinIndiaespeciallyin
transactionsandOnline lendingspace.Similarlyonline jewellerystartupwill getapowerboostasmany
people willtrytoconverttheirunaccountedwealthintogold.Alsoonlinetax paymentplatformslike
TaxSmile,Quicko,RTINation,andTax2winwill getmore customersforfilingtax.
UnifiedPaymentInterface (UPI) Push
UPI will have amajor part to playas a digitalizationacceleratorinthe processof becomingcashless
economy.
DewangNeralla,CEOof paymentservicesproviderAtomTechnologies,shedlightonthe decisioninthe
wake of the UPI push.He stated,“It isgoingto be a bigplusfor pushingdigital paymentsinIndia,which
we wouldsee increase manifoldindaystocome.People will startusingdigitalchannelsforsmall and
micropayments.”

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Decrease In Cash on Delivery(CoD)
E-commerce companiescanexpectsome uncertaintyinbusinessoverthe nextfewdays,giventhata
significantnumberof theirpurchaseshappenthroughcash-on-delivery(CoD).All companiesare
unanimousthatthiswill helpthemreduce CoDsandimprove marginsoverthe longterm.The
proportionof CoDsvariesfrom80% for some toas low as 0.5% fora few others.
"We expectthe businesstoslowdownfora few weeks.Asforthe longterm, CoDswill declinefaster
and (this) will have apositive impact,"saidShopcluesco-founderRadhikaAgarwal.
SujayathAli of online fashioncompanyVoonikandLenskartfounderPeyushBansal sharedsimilar
sentimentthey,“Nearly75-80%of Voonik'ssalesare CoD."Prepaid(orcardtransactions) isbetterunit
economics,butsince we have ahigher(share of) CoD,thiswill have animpactin the short term,"Ali
toldTOI.
The decreasein CoDswill push formoreonline paymentswhich will bring more efficiency in terms of
cost-per-delivery and makeonlinepaymentsmoreacceptableto newerand existing users. The future
looksoptimistic in forwhatmight bethe boldestmovefromthis governmentto date.