Digital payment firms in India have witnessed a surge in transactions following the termination of large bank notes in the country earlier this month. The country’s largest mobile payments provider, Paytm, reported 7 million transactions on Saturday, a new record for the company. Prime Minister Narendra Modi proclaimed the end of 500 and 1,000 rupee notes, thus removing 86 percent of the country’s cash. As a result, people have had to look for alternative methods of payment. Credit card payments are not as widely accepted as expected, and even less so are mobile payments. The challenge is for digital firms is to get more people using their products now to take advantage of the change, before credit card companies catch up.
Paytm has 150 million customers, nearly five times as much as MobiKwik, the second largest provider in the country. Paytm is valued at $5 billion dollars, and is backed by Chinese online-retail giant, Alibaba. The company is currently running at a loss, but with the new legislation, that might soon change. The cash-less initiative is intended to curb corruption. Mobile payments were already growing at a fast pace before the announcement. “Paytm is registering over 7 million transactions worth Rs 120 crore in a day as millions of consumers and merchants across the country try mobile payments on the Paytm payment platform for the first time,” said Paytm vice president Sudhanshu Gupta. The company has registered 5 million new users in the past few weeks, with 45 million total consumers using their service in the past ten years. The cash restriction initiative has been backed by Microsoft founder Bill Gates, and many leading economists.