It’s been a rough week for Indians as they continue to suffer under the act of demonetization. The currency swap announcement was made on the eighth of this month and has encountered several hurdles due to the lack of cash. However, digital payments have concurrently, seen a tremendous boost in adoption. Now, for easing the situation further, RBI (The Reserve Bank of India) has increased the limit for digital wallets to Rs 20,000.
RBI, last night doubled the balance limit for platforms such as Freecharge and Paytm to 20,000 rupees. Additionally, merchants can also transfer up to 50,000 rupees every month from these prepaid wallets. The alteration will be in action only until next month’s 30th, as stated by the RBI, and will be reviewed again. Consequently, Freecharge has already updated its services to match these new guidelines. Surprisingly, Paytm hasn’t yet reacted to this agenda which is quite bewildering given they’re the leading service in the market as of now.
Following the demonetization, digital wallets have sustained an enormous rise in their user base. Freecharge, most importantly, saw a 12x surge and has already launched a series of new products in order to enforce the incoming traffic. One such feature is for businesses in remote areas, called “on the go pin” which will allow users to complete a transaction even when there is no internet or phone coverage. Additionally, they recently unveiled “Wallet on Delivery” with Snapdeal, that lets buyers pay through digital wallets for orders placed online. They also partnered with IRCTC for offering digital wallet option to customers when they book a train ticket. Furthermore, these companies enacted a 0% fee for transferring the balance to a bank account.
It’d have been nice if the government and RBI acted upon the balance limit as soon as the demonetization was put in force, as it’d have ensured faster adoption of digital wallets by small traders. But this is still noteworthy. Hope we see more such useful steps in the near future to digitalize the transactions in the country.
Commenting further on the event, Govind Rajan, CEO of Freecharge, stated, “FreeCharge welcomes RBI’s decision to increase the limits on wallets to Rs 20,000 for users and to Rs 50,000 for merchant bank transfers. This doubling of limits will have an immensely beneficial impact for users and small merchants. Given the quantum jump in digital wallets usage in recent days, this increase in limits makes it easier for both users and merchants to shift more of their cash transactions to digital wallets. The progressive policies of the RBI and the government’s prompt resolution of industry issues will go a long way in building a cashless India.”
Update: Paytm too has now updated its digital wallet service for allowing recharges up to Rs 20,000.