India’s cashless future

Following the decision to ban 500 and 1,000 rupee notes, Narendra Modi, Prime Minister of India, has announced his ambition to turn India into a cashless society.

But can a country of over 1.25 billion people really function without hard currency?

The 500 and 1,000 rupee notes were banned as part of a campaign to undermine India’s widespread and well-established black market. But by removing 80% of the country’s currency from circulation, legitimate commerce across the nation has been brought to a staggering halt.

Credit Suisse estimates that 90% of transactions in India use cash, and digital payment penetration is very low.

Modi has conceded that the country may never go completely cashless, but he is calling on the younger generation to help educate the less tech-savvy, and urging small businesses to take the current opportunity go digital.

It will be interesting to see if the black market decides to embrace the future as well.