Monday, November 14, 2016

How Close Are We To a Moneyless World?

Maybe not as far off as you thought.  Many of you may or may not have seen the news that Prime Minister Modi (India) last week shut the bank ATMs, and announced that all 500 and 1000 notes could no longer be used -- accepted nor given -- in any business (effective at midnight that day) and that those notes would be voided on December 31, 2016.

The story behind the move actually had two objectives, but also provided a wider insight not intended.

The concept behind the move was to cleanse the country of what it known as 'black money.' Black money is undeclared money, and a lot of it is earned through corruption. So in one move those families that have had and passed down stacks and stacks of cash (we're talking crores of Rupees -- a crore is about $200,000), in many cases in the millions and tens of millions of dollars, and those politicians that have been on someone other than the government's payroll are stuck: no shops will accept the notes, and if they deposit the notes by yearend they will no longer be valid, but if they do deposit (more than 2.5 lakh ($3,600)) they'll be fined 200%. So there are reports that many are simply buring their stashes.

The Prime Minister made an empassioned speach to the country saying people wanted to kill him over the affair, but he didn't care -- he is going to straighten out the country.

So no one has had cash now since last week, and it suddenly dawned on me that [at least in the cities] India really is already a cyber country. No one has had cash and nothing seems to have changed; people are simply using debit cards, credit cards, or digital payment systems like PayTM to buy goods.

At the #Craveller Media Launch this past Saturday I did make the point that India has the youngest educated society on the planet, is a mobile first generation, and that by 2019 is projected to the largest smartphone population in the world -- with 650 million users.

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