India to become Cashless economy by 2020

By the year 2020, nearly $500 billion (33622500 Crores) worth of transactions in India will happen digitally, using online wallets and other digital payment systems which is 10 times the level currently, according to the reports of Google India and The Boston Consulting Group. The people in India traditionally prefer to save and spend in cash, more than 1.2 billion population doesn’t have a bank account. Previous Year nearly 78% of all consumer payments in India were made by cash whereas in developed countries like the United States and United Kingdom only 20% to 25% of such payments were made, the report said. But the reliance on notes and coins in India is likely to shrink as spending habits changes and financial services reaches more people, said the Google BCG report. It expects cash based consumer payments to fall  40% to 45% by 2025. A keen increase in the use of mobile phones with internet connectivity will help drive the move to digital payments, said the report.

The Nation has more than 1 billion mobile subscribers. By the year 2020 the number of smartphone users in the country would likely be 520 million and the number of internet users is 650 million which is twice the number currently, according to the reports. Personal internet banking has become more popular in the country over the past few years along with digital payment options that allows the users to settle electricity bills, telephone bills and even taxi bills. The next level of growth will come when local mom and pop grocery stores start accepting digital payments, said the report. However, there are plenty of consumers and merchants who still feel sceptical of digital payments or find them too complicated, said the report.