How to make India cashless economy in limited time and solve cash crunch?
Some of the steps that need to be taken:
1) First, inform retailers and shops to use eMoney wallets such as SBI Buddy for taking payments. Also, people to pay with these wallets. It's the MOST IMPORTANT step.
Informing is not an easy step, it requires the support of media, all politicians, and volunteers .
Digital money transfer through IMPS also costs about Rs 24 per transaction. This has to be completely removed. Transfer costs should be same as that of payment gateways.
There is another problem: server load. Are our bank servers ready to make such a huge amount of transaction? How many transactions a bank server per minute can make?
I think it has the limited capacity now because transaction fails many of the time, also we don't get OTP.
So in order to solve the server issue we need to distribute the load among different apps. With a limited number of transactions possible per an hour.
A merchant should install all the apps together to get money, just like merchants who do mobile top-ups.
We have two types of apps one: Issued by banks and others are third- party apps such as paytm. All should be used.
People should do top ups on more than one different apps and pay the merchant accordingly. Also, guidelines and limitations for apps should be given. Like you can transfer up to Rs.25000 in a calendar month when you are using Paytm.
Tell people how easy it is to use these wallets. I checked the SBI Buddy, its super easy, just entering the mobile number and MMID or account number, IFSC code will do the job.
But some of the technical steps need to be taken before getting started, such are linking the account, passwords which can be done by the help of volunteers
But if the retailer is ready of accept money through eWallet, people will know it and make the payment through it. SO THE FIX SHOULD BE STARTED FROM MERCHANT OR SHOPKEEPER SIDE.
Also if you are transacting more than Rs 100, and have smartphones, eWallet should be a must. Even for a small transaction. This will concentrate the small denomination notes towards the poor people who actually require it.
2) What about people who don't have smartphones?
Most retailers already have smartphones. There are some students who are not given smart mobile phones. Also, housewives who don't use smartphones. They are usually financially ok, so no need to subsidize them for phones. Information is enough for them, that retailers are accepting money through eWallet. Then they will find the way to buy phones and make the payment.
But the problem is with some very poor people.
One solution is to subsidize phones to the poor or bring an exchange offer or getting the phone through EMI.
If this policy is made, following problems arises:
a) How to identify those who don't have a phone?
b) Also, will phone get out of stock?
One method of identifying poor people is their bank account or income. But again it will create pressure on banks. It has to be done without the help of banks. Maybe BPL cards will do.
Will phone get out of stock? It can also require identification process, people who don't have actually smartphones.
In the first phase, people such as vegetable vendors, chai wallas etc. who sell products should be given smartphones.
Then in the second phase, it comes to the people who buy products, per family one smartphone should be allowed. It should be done by scarcity and demand in different phases.
3) Another problem is Internet package:
It can be solved by circumventing net neutrality. Traffic for using these apps must be free. It will not create a loss to the telecom operator, because, very small amount of data is used for the transaction, but it will benefit them, as they will get an immense number of internet subscriber due to more use of smart phones. Sometimes retailer can use more data, so daily limit may be kept for those who are using huge traffic through these apps.
These are the short-term measures that can be taken. In long run, further streamlining the process, such as improving the user experience of apps, upgrading servers and other problems that are faced by people can be done.
1) First, inform retailers and shops to use eMoney wallets such as SBI Buddy for taking payments. Also, people to pay with these wallets. It's the MOST IMPORTANT step.
Informing is not an easy step, it requires the support of media, all politicians, and volunteers .
Digital money transfer through IMPS also costs about Rs 24 per transaction. This has to be completely removed. Transfer costs should be same as that of payment gateways.
There is another problem: server load. Are our bank servers ready to make such a huge amount of transaction? How many transactions a bank server per minute can make?
I think it has the limited capacity now because transaction fails many of the time, also we don't get OTP.
So in order to solve the server issue we need to distribute the load among different apps. With a limited number of transactions possible per an hour.
A merchant should install all the apps together to get money, just like merchants who do mobile top-ups.
We have two types of apps one: Issued by banks and others are third- party apps such as paytm. All should be used.
People should do top ups on more than one different apps and pay the merchant accordingly. Also, guidelines and limitations for apps should be given. Like you can transfer up to Rs.25000 in a calendar month when you are using Paytm.
Tell people how easy it is to use these wallets. I checked the SBI Buddy, its super easy, just entering the mobile number and MMID or account number, IFSC code will do the job.
But some of the technical steps need to be taken before getting started, such are linking the account, passwords which can be done by the help of volunteers
But if the retailer is ready of accept money through eWallet, people will know it and make the payment through it. SO THE FIX SHOULD BE STARTED FROM MERCHANT OR SHOPKEEPER SIDE.
Also if you are transacting more than Rs 100, and have smartphones, eWallet should be a must. Even for a small transaction. This will concentrate the small denomination notes towards the poor people who actually require it.
2) What about people who don't have smartphones?
Most retailers already have smartphones. There are some students who are not given smart mobile phones. Also, housewives who don't use smartphones. They are usually financially ok, so no need to subsidize them for phones. Information is enough for them, that retailers are accepting money through eWallet. Then they will find the way to buy phones and make the payment.
But the problem is with some very poor people.
One solution is to subsidize phones to the poor or bring an exchange offer or getting the phone through EMI.
If this policy is made, following problems arises:
a) How to identify those who don't have a phone?
b) Also, will phone get out of stock?
One method of identifying poor people is their bank account or income. But again it will create pressure on banks. It has to be done without the help of banks. Maybe BPL cards will do.
Will phone get out of stock? It can also require identification process, people who don't have actually smartphones.
In the first phase, people such as vegetable vendors, chai wallas etc. who sell products should be given smartphones.
Then in the second phase, it comes to the people who buy products, per family one smartphone should be allowed. It should be done by scarcity and demand in different phases.
3) Another problem is Internet package:
It can be solved by circumventing net neutrality. Traffic for using these apps must be free. It will not create a loss to the telecom operator, because, very small amount of data is used for the transaction, but it will benefit them, as they will get an immense number of internet subscriber due to more use of smart phones. Sometimes retailer can use more data, so daily limit may be kept for those who are using huge traffic through these apps.
These are the short-term measures that can be taken. In long run, further streamlining the process, such as improving the user experience of apps, upgrading servers and other problems that are faced by people can be done.
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