Mobile money accounts comprise
Why should electronic payment and simultaneous tax deduction not be made compulsory for commercial entities in all those towns and villages which already have the necessary basic profile — access to electricity along with phone and road connectivity? Why not “carpet bomb” the 50 largest cities in India with assistance and persuasion to say no to cash?One cannot develop an entire ecosystem for junking cash by fiat alone. So innovative mechanisms should be developed to provide “barefoot” banking to the poor. Mobile money accounts comprise 55 per cent of such e-money accounts. Engage millennials to figure out how to fast forward us there out of turn.
The future is digital. For individuals, plastic (payment cards) and e-money provides far greater security despite the risk from cybercrime. India stands at a ratio of 480 wholesale plastic blow moulding machine accounts per 1,000 adults. Over the period of 2010 to 2015, the number of e-money accounts have grown at the rate of an astonishing 63 per cent per annum — more than triple the rate at which bank accounts have increased over the same period in economies which lack universal financial access. Typically, micro-transactions of less than $5 (Rs 340) are not viable through plastic money and would need to be cross-subsidised.
Easy access to POS ready merchants and vendors is key for building the credibility of plastic money as an alternative to cash. In comparison cards or e-money options are used to conduct around 280 transactions a year per person in high-income economies. The Reserve Bank of India revolutionised the licensing of payment banks earlier this year by bringing in a “year-around”, entrepreneur-driven approach of welcoming proposals for opening banks and branches which provide less than the full range of banking services without inviting proposals for bank licensing through formal rounds, as previously.Ramping up the scale of e-money is a “quick win”. Compare this with the 25 million registered commercial enterprises in India.
