On November 8, 2016, Prime Minister Narendra Modi made an unexpected announcement. The Indian government decided to withdraw all INR 500 and INR 1000 notes as legal tender and replace them with new INR 500 and INR 2000 notes. The move intended to flush out all the black money in the country, which, according to the government, was being held in high denomination currency.
Much has been said about the rather drastic move since then. Some have gone all out in support of the PM’s decision, calling it a short term pain necessary for future benefits while others believe that it has done nothing but cause the masses untold misery. Yet others have taken a moderate approach acknowledging that while the government’s intentions may have been brilliant, the execution was rather blotched.
Over a month and half has passed since the government’s demonetization announcement and yet the long queues at banks and ATMs do not seem to abate. Even as bank officials fuel the ATMs, long lines start to form and one never knows when the cash shall run out. Withdrawal restrictions and unavailability of new currency notes have compounded the challenges. Worst hit, probably, were the seniors and those who are unable to get in queue due to some ailment or disability.
Ola Cashes In
Apart from bringing the people untold woes, the demonetization undertaken by the government has also brought with it some great business opportunities. Ola Cabs, the cab-on-demand service that has made its name as one of the leading taxi services in the country, was the first to capitalize on the cash crunch. By the first week of this month Ola Cabs announced its partnership with Yes Bank to bring its customers a mobile ATM service.
Yes Bank launched mobile ATM terminals that would be placed in Ola Cabs. Customers with bank accounts in any bank can withdraw a maximum of INR 2000 from these. These ATM empowered Ola Cabs service 30 locations in 10 different cities across the country.
Grofers Joins The League
After Ola Cabs, Grofers next partnered with Yes Bank to deliver cash at the doorstep of its customers. Grofers is an e-grocer, an application that can be used from a mobile device to order fruits, vegetables, and grocery items for home delivery. It has enabled its delivery men in Mumbai and Gurgaon with mobile swiping machines, where customers can swipe their debit cards and withdraw up to INR 2000, along with their regular orders.
The service is soon to be extended to other cities serviced by Grofers. “Grofers delivery executives will carry POS machines where customers can swipe and get cash within the comfort of their homes,” said the company. Following the demonetization announcement Grofers has registered a 40 percent growth in its order volume.
Snapdeal – New Kid On The Block
The latest addition to this cash delivery service is renowned e-commerce player, Snapdeal. Snapdeal has initiated a new service that it calls “Cash@Home”. Customers can now order cash at their doorsteps. Snapdeal with use the cash it receives from its Cash on Delivery (COD) orders to service customers who place such a Cash@Home order. Customers can ask for any amount up to INR 2000 to be delivered and Snapdeal will charge a nominal fee of INR 1 per booking. Customers will need to use an ATM debit card or its mobile wallet, FreeCharge, to reimburse the company. What sets Snapdeal apart from the other services is the fact that its customers need not order any other product from the site to avail of this service.
While the service is currently available to Snapdeal customers only in Gurgaon and Bengaluru, it is soon to be extended to other metro cities of the country. “We aim to be the marketplace that seamlessly services every customer need…the launch of the cash-on-demand service is intended to further help our consumers tide over any cash crunch that they might face in addressing their daily needs,” said Snapdeal co-founder Rohit Bansal.
The one great advantage of the demonetization drive announced by the government is the robust stride that the country has taken towards going cashless. From small time food vendors to major establishments have started to make provision for accepting digital payments through credit or debit cards and mobile wallets such as PayTM and FreeCharge. While there is much that needs to be done in terms of digital security of financial assets, this is certainly a move in the right direction.