Demonetisation but not as we know it

Much has been written about the impact on daily life arising from the Indian government’s decision to withdraw certain denominations of cash from legal tender in a bid to curb corruption. I personally don’t know enough about the situation in India to make any kind of judgement but it has been fascinating to hear from candidates about how Indian society is coping with this very drastic measure.

Coming from Singapore, I am steeped in an ethos of accountability and zero tolerance for corruption in public service. But I also know that Singapore’s enviable track record of combating corruption was hard-won and it is a constant battle to ensure that corruption does not gain a foothold in society.

While a lot of attention is focused on high-profile cases of corruption that lead to prosecution or in the recent case in South Korea, to impeachment of the President, what tends to be taken for granted is that a country can remove much of the opportunities for corruption by adopting e-government systems and policies. This means that rules become very clear and there is a proper payment trail. Of course, this requires a society that has embraced digital transactions and it also means a less personal face to public services mostly because it removes all flexibility and judgement from any kind of transaction.

While speaking to a candidate about India’s demonetisation move, it occurred to me that I hardly use cash anymore. I might make two small cash withdrawals a month, but largely use debit or credit cards for transactions. Increasingly I have been using my mobile to make payments. This shift is made easier in the UK where more than half of the card terminals that I see can now accept contactless payments and I just find it far more convenient to pay with my phone than with a card. I recognise that I am an outlier and most people still prefer cash but it is only a matter of time before cash is no longer king. We can only wait to see what business opportunities will be created as a result of this shift.

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