Digitalization of Indian Currency: Post Demonetization

Abstract

An open system demonstrates greater efficiency and fosters a more inclusive environment, thereby appealing to a broader demographic for both economic and political advantages. The evening of November 8, 2016, profoundly disrupted the economy as the high-denomination currency notes of 500 and 1000 were withdrawn from the nation's financial system. The action was sufficiently audacious to attract ongoing critiques. The immediate consequences were evident as the economy experienced a significant loss of control, leading to the disarray of the unorganized sector and businesses, resulting in substantial financial losses and widespread job displacement. The economy experienced a contraction of 1% in its GDP as a consequence of demonetization. The sole system remaining for individuals was to engage in digital transactions and utilize alternative payment methods. Digital payments are undoubtedly essential in today's context, as transitioning to a completely cashless economy presents significant challenges. However, a reduction in cash usage is always a feasible objective. The rise of digital transactions is experiencing an unforeseen acceleration, driven by the expanding array of online payment options available in India. This research assesses the extent of awareness and the perspectives held by customers regarding digital payment systems. The research further elucidates the array of services provided by digital payment platforms tailored to specific user demographics, offering an in-depth analysis of user preferences concerning various modes of digital transactions as observed by world economy. The implementation of demonetization has led to a notable rise in the adoption of digital payment methods, which is a favourable development an approach to address this pressing issue of cash scarcity in the forthcoming years. The payment system necessitates that the end user possesses a fundamental understanding of smartphones or conventional bar phones. Identifying the essential elements that contribute to the widespread acceptance of digital payments among consumers and the general populace is of paramount importance. This indicates that the objective of the study is to identify the factors that impede the adoption of e-wallets in India.