India isn’t only trying to fight corruption with its move to take high-denomination currency out of the system; it is aiming to get rid of plastic money by 2020.
According to a report by the Wall Street Journal, Amitabh Kant, CEO of NITI Aayog, said over the weekend that India was in the process of a “huge disruption” in financial technology and innovation that will lead to citizens moving away from plastic money to mobile payments.
“By 2020, India will make all debit cards, all credit cards, all ATM machines, all [point-of-sale] machines totally irrelevant,” Kant said at the Pravasi Bharatiya Divas event inaugurated by Prime Minister Narendra Modi in Bangalore and covered by the WSJ. “In 30 seconds flat, we’ll all be doing our transactions by using our thumb.”
Kant pointed to the government’s new app, Bhim, which currently lets users of Google’s Android platform transfer money from one bank account to another bank account without the need of a middleman. The government is gearing up to link that app to Aadhar, India’s unique identification program. Once that is complete, consumers will be able to make transactions via their thumbprints.
“In the next two years, the power of ‘Bhim’ will be such that you wouldn’t need a smartphone, feature phone or even internet. Your thumb would be enough,” Prime Minister Modi said at the unveiling of the app at the end of December, noted the WSJ. The app has been downloaded more than 10 million times, Prime Minister Modi said in a tweet, noted the report.
In early November, Modi announced that the country’s 500-rupee and 1,000-rupee banknotes were being taken out of circulation. As reported by the BBC, taking those notes out of the financial system represents an effort to stymie fraud efforts, corruption and what the site noted as “illegal cash holdings.” Prime Minister Modi stated that the illegal activities are among the “biggest obstacles in eradicating poverty” — with a bead being drawn on tax evaders, according to the BBC.