Demonetization:Unpacking the Digital Wallets

On Nov. 8, 86% of India's currency was nullified in a great demonetization effort that aimed to clean out the black market's cash supply and counterfeit notes which completely disrupted the social, political, and economic spheres of the 'worlds second largest emerging market. All 500 and 1,000 rupee notes were instantaneously voided, and a 50 day period ensued where the population could redeem their cancelled cash for newly designed 500 and 2,000 rupee notes or deposit them into bank accounts. India has done this before. In 1946, all 1,000 and 10,000 rupee notes were recalled. In 1978, 1,000, 5,000, and 10,000 rupee notes were demonetized. In the days following Modi's announcement, the banks didn't have enough of the newly designed banknotes on-hand to distribute in exchange for the cancelled notes, and there simply wasn't an adequate supply of smaller denominations in circulation to run the cash economy. This could be the opportunity for e-wallet, companies to flourish and increase their customer base. For safe and fast transactions e-wallet are emerging as an alternative to cash.