India's digital payment journey turbocharged by currency ban

INDIA'S massive currency swap - the result of a ban on high-value notes of 500 and 1,000-rupee denominations - is expected to end on Dec 31. From 2017, the next stage of the exercise will unfold. This could result in a forced digitisation of much of the cash-based Indian economy.

The two high-value notes together accounted for 86 per cent of the currency in circulation. This represents around US$250 billion, which is more than the gross domestic product of 80 per cent of the world's economies.

When Prime Minister Narendra Modi announced the ban on Nov 8, India was chugging along nicely with a trend GDP growth rate of 7.5 per cent and was the fastest-growing major economy in the world. This sudden move is expected to result in a couple of quarters of reduced growth. It will also hurt and inconvenience people massively, especially those in India's rural and informal sectors. So the question is: has it been worth the effort?