How safe is the digital world?
During the time of Notebandi, one of the objectives, as stated by Prime Minister Narendra Modi for demonetisation, was to usher in ‘Cashless Economy’ and going ‘Digital.
During the time of Notebandi, one of the objectives, as stated by Prime Minister Narendra Modi for demonetisation, was to usher in 'Cashless Economy' and going 'Digital.' With the advent of the e-wallets and Paytm, the digital economy was making forays and penetrating the Indian economy. But with new ideas come new problems. It is often that we have heard of looting of banks and the cash thefts but the illegal digital lending apps is the digital world issue that has come to the fore in recent times.
The usurious money lenders are occupying the first seat in this digital cashless economy. The digital applications and transactions were already in place since 2016. In the past two months, in between the chaos caused by coronavirus, there have been many suicides by defaulters because of their incapacity to repay the loans taken by them online.
Amid the growing suicides in Telangana, the RBI has cautioned the public to be wary of unauthorised digital lending apps and mobile apps. The RBI took note of the reports of individuals and small businesses falling prey to a growing number of unauthorised digital lending platforms. "Members of the public are cautioned not to fall prey to such unscrupulous activities," the RBI said and also urged the public to first verify the antecedents of the company offering such online loans before taking it.
A research study carried out in 2019 by Global Data shows 83.6 percent of survey respondents in India confirmed they have a mobile wallet and regularly use it–compared with 31.5 percent in the US and 24.6 percent in the UK. Interestingly, Paytm is the most preferred mobile wallet while Google Pay occupies the second place.
The Cyberabad pólice, on December 22, busted a multi-state online money-lending racket with heavy interest rates up to 35 per cent on the loans in Hyderabad. As per the investigation, as many as 70,000 people had fallen victims to this online money-lending racket.
When we note 2020 figures, the number of transactions for PPIs (Prepaid Payment Instruments) (Wallets + PPI Cards) increased by 94.6 million in May 2020 and this growth again can be attributed to the financial crunch and crisis caused by coronavirus. Both the digital transactions, lending and borrowing, and the fraudulent extortion of money have been rampant ever since.
Can India be another US?
Now the question arises whether the dream of cashless economy can be achieved anytime soon and can India actually walk parallel to the US economy in this aspect. The cashless economy is an economic system where small amount of cash is used in transactions. Cashless economy is based on transactions made by credit cards, debit cards, wallets or digital modes.
After the best cashless economies in the world —Sweden and Canada---US accounts for 45 percent transactions in terms of cashless economy while India is far behind with just 5 percent but growing faster. Yes, India can be another US and can go on to become the best cashless economy and this can happen only when the illegal lending apps and illegal extortion are brought under foot.
Need more robust
In the wake of rising instances of illegal digital transactions, there is every need for more robust anti-apps to counter such illegal apps. Hence, the IT professionals and companies should first engage in developing digital security apps to counter the illegal usage. The police can also work best in this regard by hunting down all the racketeers involved in such immoral acts.
Can this be taken as the good side of demonetisation or side effects of coronavirus?
When we trace the trends, we see that at two different times, the cashless economy was taking a gallop in the Indian economic scene, that is, in 2016 post-demonetisation and now when the unprecedented cash crunch is brought out by stalling of businesses, loss of jobs and slowing down of the economy itself.
Every move has both sides-- good or bad to it-- and thus the increase in digital economy can be taken as the good side of demonetisation. The current crisis may prove to be launching pad for the digital transactions again but it has also brought with it the pitfalls of the modern day world — the fraud and illegal extortion by digital gangsters. Thus, there is an immediate need to bring in digital security to check misuse.