Fears for currency
Research organisation, Mintel, has found that the Indian government’s decision to demonetise INR 500 and INR 1000 - two of its highest currencies - in November 2016 has led to a rise in demands for cashless payments.
The government’s intention was to prevent the handling of black money and reassure the country that the circulation of legitimate currency is both prioritised and monitored.
Since the move, findings show that 89% of Indian consumers are currently using cash as their preferred payment option.
The country’s recent decision, however, is drawing consumers towards more contemporary and digital payment options.
Digital payments on the up
Government data indicates that payments services with e-wallet capabilities such as Oxigen, Paytm and MobiKwik have risen in popularity. In one month, daily transactions on these platforms have gone from 1.7 mn to 6.3 mn. In value terms, this amounts to an increase from INR 520 mn (€7.2 mn) daily to INR 1910 mn (€26.6 mn); representing a 267% rise.
As the nation still grapples with the limited availability of cash, consumers are now turning to digital payment methods for added convenience and safety.
Mintel has highlighted the 'seamless spending' trend, which demonstrates how digital payment technologies are transforming throughout the world; and is now heavily felt in India. These are changing based on how, when and where customers can purchase desired items and brands can sell these.
It reported that although typically, the global trend indicates that consumers move from cash to cards to mobile and contactless card payments, in the midst of rapid change, India has skipped several steps and is replacing cash with mobile and digital wallets as its preferred mode of payment.
Added incentive for all
Mobile wallets entice consumers by providing cashback on online payments for utility bills, and when purchasing discounted products and services.
Retail chains are using this method to maximise brand loyalty to differentiate their offerings from market competitors via mobile wallets.
Ultimately, while India’s demonetisation step may be interpreted as having a negative impact on the population in the short-term, retailers and consumers may gain in the long-term by improving convenience, saving costs and upping brands’ shares in the marketplace.
As digital data is capable of analysing ongoing activities, brands can gather real-time customer transaction information to create deals and offers based on consumer spending habits and personal preferences.
With customisation set to make such as impact in 2017, this feedback can provide brands with a clear and reliable data-driven insight into what consumers choose and deliver via rich results.