How the ban of Rs. 500 and Rs. 1000 notes, introducing new currency notes and temporarily suspended COD is going to affect ecommerce websites and online payments.
On 8 November, Government of India announced the ban of Rs. 500 and Rs. 1000 notes and they ceased to be legal tender from midnight 9 November. However, there would be new currency notes in circulation later on. This move has come as a surprise and shock for everyone, even within government, but has been widely accepted and applauded throughout the whole country.
The change in currency notes would force people to declare unaccounted money thus curbing the flow of black money and its use in various illicit activities.
Why Ban of Rs. 500 and Rs. 1000 notes
Big denomination notes are highly used for corruption, terrorism, money-laundering, and other illegal activities, which is the major reason behind the decision to ban of Rs. 500 and Rs. 1000 notes. Fake currencies freely flowing in the market, was also a major concern for the government, hence in an effort to curb all these and improve economic conditions, old notes are to be replaced with new ones.
Some of the industries, which would be highly impacted by this move, are –
- Real Estate
- Construction Material
- Unorganized Trade & Services
Affects on Ecommerce Industry with the Ban of Rs. 500 and Rs. 1000 notes
Change in Currency Notes is the first step towards digital economy by the government therefore; it would highly affect ecommerce industry. With the announcement of ban of Rs. 500 and Rs. 1000 notes, major ecommerce sites stopped Cash on Delivery (COD) payment. For anyone who wants to order online now has to pay money online too.
Big brands such as Amazon, Shopclues, all stopped offering COD payment; however, some are ensuring customers they would add the payment method later. While these would affect sales in the short term but many are certain about the positive impact in the longer terms.
There are many customers, mostly in semi-urban and rural areas that always go for cash payments, irrespective of the amount to be paid, as they do not believe in plastic money. They would go to banks, withdraw money, and then pay for products bought. While online shopping is slowly gaining more customers, Indians still prefer COD to Plastic money and that obviously meant more transaction details and more headaches for ecommerce websites.
This move would encourage people to use online payments through payment gateways, decreasing dependency on cash. According to some sources, app download of eCommerce websites have increased highly in the past couple of days.
This shows the long-term positive impact and high growth rates of the e-commerce websites. Online payment or alternate payment options would help in more transparent transactions and higher returns for e-commerce businesses. Apart from some short-term glitches, everyone is hoping for a higher economic growth and better future developments.
According to Digital360, a digital marketing company, this is certainly welcoming news and would prove hugely beneficial for IT sector as more and more retail stores would opt for virtual stores. In the coming times, more websites would introduce online payment gateways and other payment methods would emerge to fulfill the gap from decreased cash transactions.