Demonetisation of 500 and 1000 Rupee Notes – Boon or Bane for the E-commerce Sector

The unexpected move of demonetising 500 and 1000 rupee notes was accompanied by a startling number of sequels in the eCommerce sector. Though not significant enough, the movement definitely showed a mounting trend on the digital front.

With cash transactions suffering a reduction, there was an increase in demand for alternative forms of payment including online transactions using e-banking and credit or debit cards, digital transaction systems, e-wallets and others. This has in turn, led to a progress in the online purchasing of several basic consumer products as means of .

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While we see an increase in the number of online orders, there has also been a large percentage of returns in the cash on delivery (COD) orders due to unavailability of cash. With several popular eCommerce stores such as Amazon, Flipkart, Paytm and Snapdeal crippling the COD option for many of their items, they will have to provide alternate means of payment to customers for all orders opted with cash on delivery during the period of demonetisation.

With the not-very-positive ripples of demonetisation still in presence, there will be a considerable increase in demand for digital payment options. If this rise in the digital payments during the period continue to exist even after everything falls into place, the e-commerce companies will have substantial reasons to rejoice upon. It is still uncertain if the ban will pave way for more and more payments moving to digital. The e-commerce companies are hoping that demonetization will inspire more people to move online.

E-commerce companies cheer the decision of ceasing the usage of 500 and 1000 rupee notes as a precursor to an increase in digital payments. However, as the majority of online orders in the country fall under the category of cash on delivery, it remains to be seen whether the unanticipated liquidation of the 500 and 1000 rupee notes will emerge with a positive note for the e-commerce industry.

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