A2 RW Ch2 L3 · Cashless Societies — Good for All? 🌏

1In 2016, Prime Minister Narendra Modi of India ordered the removal of the 1,000 rupee note (valued at about $14.50). Most Indians were upset and ran to the bank to exchange their money before it became useless. Modi's idea was to fight corruption and tax evasion, but the result was something else: millions of Indians joined the digital economy.

2Before Modi's order, cash was the most popular way to do business in India. According to some reports, 95 percent of all business was done in cash, and 90 percent of businesses did not have credit card readers or accept mobile payments. Now that has changed. Mobile payment companies have become popular. For example, Paytm, India's biggest mobile payment company, currently has 200 million registered users and 7 million sellers who accept payment. However, some are asking if a cashless society benefits everyone in India.

3Critics worry that the poor will be hurt the most. Two hundred seventy million people live below the poverty line, which is like living on $1.25 a day in the United States. Many of those work in India's informal economy as day laborers, housekeepers, drivers, and street vendors, for instance. Many cannot read or write and have always used cash. However, because the people who employ these workers use mobile payments, owning a smartphone is becoming necessary.

4Some street vendors have accepted the change and are using mobile payment apps, like Paytm. But others just can't. According to a study by Counterpoint Research, more than 1 billion Indians don't have smartphones. Smartphone prices are going down, but smartphones still are not cheap. When a government creates a cashless society, like Modi's government has, it must think about how to include the poor. Only then can a cashless society benefit everyone.

1In 2016, Prime Minister Narendra Modi of India ordered the removal of the 1,000 rupee note (valued at about $14.50). Most Indians were upset and ran to the bank to exchange their money before it became useless. Modi's idea was to fight corruption and tax evasion, but the result was something else: millions of Indians joined the digital economy.

2Before Modi's order, cash was the most popular way to do business in India. According to some reports, 95 percent of all business was done in cash, and 90 percent of businesses did not have credit card readers or accept mobile payments. Now that has changed. Mobile payment companies have become popular. For example, Paytm, India's biggest mobile payment company, currently has 200 million registered users and 7 million sellers who accept payment. However, some are asking if a cashless society benefits everyone in India.

3Critics worry that the poor will be hurt the most. Two hundred seventy million people live below the poverty line, which is like living on $1.25 a day in the United States. Many of those work in India's informal economy as day laborers, housekeepers, drivers, and street vendors, for instance. Many cannot read or write and have always used cash. However, because the people who employ these workers use mobile payments, owning a smartphone is becoming necessary.

4Some street vendors have accepted the change and are using mobile payment apps, like Paytm. But others just can't. According to a study by Counterpoint Research, more than 1 billion Indians don't have smartphones. Smartphone prices are going down, but smartphones still are not cheap. When a government creates a cashless society, like Modi's government has, it must think about how to include the poor. Only then can a cashless society benefit everyone.

1In 2016, Prime Minister Narendra Modi of India ordered the removal of the 1,000 rupee note (valued at about $14.50). Most Indians were upset and ran to the bank to exchange their money before it became useless. Modi's idea was to fight corruption and tax evasion, but the result was something else: millions of Indians joined the digital economy.

2Before Modi's order, cash was the most popular way to do business in India. According to some reports, 95 percent of all business was done in cash, and 90 percent of businesses did not have credit card readers or accept mobile payments. Now that has changed. Mobile payment companies have become popular. For example, Paytm, India's biggest mobile payment company, currently has 200 million registered users and 7 million sellers who accept payment. However, some are asking if a cashless society benefits everyone in India.

3Critics worry that the poor will be hurt the most. Two hundred seventy million people live below the poverty line, which is like living on $1.25 a day in the United States. Many of those work in India's informal economy as day laborers, housekeepers, drivers, and street vendors, for instance. Many cannot read or write and have always used cash. However, because the people who employ these workers use mobile payments, owning a smartphone is becoming necessary.

4Some street vendors have accepted the change and are using mobile payment apps, like Paytm. But others just can't. According to a study by Counterpoint Research, more than 1 billion Indians don't have smartphones. Smartphone prices are going down, but smartphones still are not cheap. When a government creates a cashless society, like Modi's government has, it must think about how to include the poor. Only then can a cashless society benefit everyone.