Trillions of dollars worth of transactions are still made in cash around the world each year, but if India’s brave money experiment proves to be an inspiration to other countries we could see mobile initiatives begin to take a significant slice of that commerce pie during 2017.
As covered in detail in the money pages of Mobile World Live in the last few months, the Indian Government took decisive action last year to clampdown on fake banknotes and move its cash-heavy economy towards digital alternatives – a strategy dubbed by Prime Minister Narendra Modi as a move to a “less-cash” society.
Following these measures the country’s mobile companies looked to seize the initiative, with the country’s three largest operators tussling for position alongside providers of money apps and traditional banking institutions.
In the first public barometer of the policy, Bharti Airtel announced it had already signed up one million customers for its new accounts during a two-month regional trial.
If its level of success continues after this week’s full-scale launch and as other players enter the market, the ramifications could go well beyond India.
Cash is still king
Despite ‘death of cash’ headlines being splashed around the financial media for years, the world’s cash economy still looks in good health. Many countries are still heavily reliant on traditional currency and the World Bank estimates cash transactions to small- and medium-sized companies account for $19 trillion of trade worldwide each year.
With this level of usage, there are surely many other authorities who can see the benefit of a more traceable, verifiable and taxable form of transaction such as mobile and digital money?
If the India experiment delivers the impact the authorities intend, there will likely be operators and governments around the world readying similar schemes to increase the scale and scope of banking in their countries. Some of these nations are already mature mobile payment markets and other financial services could be a natural next step. Others are still heavily cash reliant and are starting from a lower base point.
It will be interesting to see how this unfolds: which countries will follow India’s brave step and which services can capture the imagination of consumers? Maybe, fuelled by the successful model in India, 2017 will finally be the year for the mobile money revolution.
The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.