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PERSPECTIVES ON DIGITAL CURRENCY

Aug 26, 2010

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Bringing the Benefits of Financial Inclusion to India

India is the world’s second-most populous country with more than 1.3 billion people, GDP growth of more than 7 percent and the world’s largest rail system that carries 6 billion passengers a year. Despite its growth, the government is eager to shift consumer spending from cash to electronic payment to accelerate growth, transparency and financial inclusion. In our recent trip to Mumbai as part of the Currency of Progress project, we found many encouraging signs of consumers and merchants embracing digital currency as a more secure, transparent and convenient alternative to cash.

Everyone we met, from India’s largest employers to their smallest merchants, agreed that cash creates problems that card acceptance helps solve. A powerful example of the benefits of digital currency is Indian Railways, which began accepting cards for online bookings in 2002. Today, the company sells 250,000 tickets online daily. Online booking saves a quarter of a million people time and money daily, and helps Indian Railways reduce operating costs at over-crowded stations.

Also fueling the Indian economy is Modern Future Retail Group (MFRG),  the country’s largest retailer. The goal of the company, according to Sandip Tarkas, is to bring formal retailing to the Indian masses. Cash handling is an intensive activity for a store as large as MFRG, and going cashless saves on the headache of cash management. Currently, 50 percent of MFRG’s sales are on some form of card – a phenomenon Sandip encourages and hopes to see grow.

But it is not only large businesses that have begun to accept digital currency; millions of small businesses are doing the same. For owner Prakash, accepting Visa was a straightforward business decision – it brings in more business to his restaurant, requires a lot less labor and negates a safety issue many small business owners face with customers carrying cash.

Prakash and millions of other retailers across India are growing their business and reducing their reliance on cash by embracing electronic payments.

Posted by: Richard Martin, Visa Corporate Relations on August 26, 2010 at 6:03 pm