How is demonetization affecting your startups?


#1

As we all know our PM, Shri Narendra Modi has recently taken a significant action of demonetization to curb black money. The same had a notable change on the market.

While the aim of cashless India seems to be a good initiative, over 28% of startups saw their business affected.

E-commerce startups might have to face problems in COD orders due to the shortage of cash throughout the country.

While the shortage of money possessed a problem to the majority of startups, digital wallet services like Paytm saw a sudden growth in the charts due to the shift of people from paper money to online wallets for their convenience. Most of the small businesses now accept Paytm as a new payment mode. This has led to a sudden boost in revenue of such apps. New wallet apps are also coming up every other day trying to take advantage of the same.

Food delivery and cab startups will remain undisturbed by the implementation of policy as they are well equipped with POS machines and other modes of cashless payment.

IT and finance related startups tend to avoid payments as physical cash as the services are generally high priced. Negligible effect would be seen on the same.

The policy seems to be startup friendly and will help boost the revenue substantially.

How is demonetization going to impact your startup? Do let me know in the comment section.


#2

Good topic, i was curious why know others had posted this question earlier since it is a gamechanger for the indian economy , cashless or otherwise, it has captured the imagination of the country and there are all kinds of opinions on the topic, some political, some economical , but for the most part the evidence for both sides of the argument is out there for all to see.

The demonetization is likely to have a positive impact on the startup community , and especially those interested in mobile wallets, bitcoin and online commerce, which constitutes a fair bulk of startup innovation going on in the country.
Unfortunately the banking system has been caught unawares, and the move to demonetize has exposed a lot of inadequacies in our banking system , especially the rural footprint of digital commerce, and even basic facilities for banking even.

The Cyber Security threat that all online transactions face is also likely to get a strong mention at startup related discussions, since tech entrepreneur’s will be keenly looking to plug any loopholes in our digital economy, and be suitably rewarded for the same.

Specifically on the PayTM front, my experience with the local traders has been very dissapointing both prior to demonetization and even after the new wave of PayTm , FreeCharge advertising in support of the Governments move.

I spoke to a few chemists, Bakers, Dry Cleaners , Tea Sellers, Biriyani Sellers and their responses were as follows.

  • The Chemists were averse to PayTM, as they were not aware of how PayTM / mobile wallets work.
  • The Tea Seller & Dry Cleaner and Biryani Seller didnt have a bank account, and one of them said they have an account only in their Village.
  • One owner of a Bakery agreed to install PayTm, but he doesnt use a smartphone , and is not aware of how to install / use PayTM.
  • Couple of people also got a bit irritated when i wanted to make mini-Transactions using PayTM.

So there is more than meets the eye when it comes to demonetization paving the way towards a cashless economy, personally i think the way forward is not cashless, but plastic in the form of Rupay Cards for Indians.