Indians sign up for mobile wallets after most cash rendered useless

Indians have avoided digital transactions for decades, but this week they are increasingly looking at cashless solutions.

In the aftermath of withdrawal of Rs 500 and Rs 1,000 denomination currency notes earlier this week, people are increasingly downloading and using mobile wallet apps such as Paytm, Ola Money, and Freecharge, the companies say. Most of them took the opportunity to advertise their solutions with full-page advertisements in national dailies.

SEE ALSO: How India is coping with most of its cash becoming useless

Ola Money said Wednesday it saw a 1,500 percent increase in wallet recharges (adding money from a bank account to the digital wallet). Paytm said it saw a 435 percent upward spike in traffic as "millions" of people used its app. It also saw 200 percent increase in app download numbers, and 250 percent surge in overall transactions and transaction value.

Banks were closed on Wednesday in India, which resulted in people struggling to find enough paper cash to handle their daily expenses. Mobile wallet apps are seeing this as a big opportunity to win customers. 

Snapdeal-owned Freecharge today launched a new feature in its wallet called "Wallet on Delivery" which allows users to pay for their purchases on Snapdeal when they are delivered using their FreeCharge wallet. The move comes as most of ecommerce businesses in India temporarily restricted or suspended popular cash on delivery option.

Digital disconnect is a big challenge in India, with hundreds of millions of people still preferring cash and having no bank accounts. This has forced digital payment solution providers to look for ways to attract customers. 

Paytm said today it will hire over 10,000 people to expand touch points where users can pay cash to top up their mobile wallets. The company currently has partnership with over 2 million offline merchants, who accept payments via Paytm cash.

“As millions of consumers across India have taken to using their Paytm Wallets to transact offline, our biggest opportunity is to be available in every town and city in the country,” the company said in a press release.

Indian banks opened Thursday to long queues of people waiting outside to exchange their now-scrapped notes and withdraw new Rs 2,000 and Rs 500 notes. The government currently isn't allowing people to exchange more than Rs 4,000 ($60) per day of their old currency for new bills.