In November 2016, Prime Minister Narendra Modi took the nation by surprise by demonetizing Rs 500 and Rs 1000 currency note. The annual report of the Reserve Bank of India estimates that about 99% of the demonetized Rs 500 and Rs 1000 currency notes returned to the banking system after demonetization. India’s former Prime Minister Dr Manmohan Singh considers demonetization was a black day for democracy and economy, whereas eminent Nobel Prize winning economist Richard Thaler praises Modi’s note ban.    

But the data and statistics released by various organizations clearly depict the devastating impact of demonetization on Indian GDP and industries. The GDP of India dropped to 5.7% for Q1 2017. At the same time, demonetization also affected the growth of several sectors including software application development and mobile app development. After demonetization of high value notes, mobile apps and mobile payment systems contributed immensely towards facilitating cashless payment and digitization of the economy.

But demonetization made it difficult for small and medium enterprises (SMEs) and startups to launch new mobile apps. Many small enterprises and startups also opt for web-based mobile apps instead of native mobile apps due to resource constraints. Also, resource constraints compel many entrepreneurs to optimize their websites and web applications for mobile devices. Many entrepreneurs even decided to make their apps accessible across devices and platforms by using widely used web technologies like HTML5, CSS3 and JavaScript. Let us understand the impact of demonetization on mobile app development and developers  and see how it contributed hugely towards making certain category of apps popular.

Assessing Impact of Demonetization on Mobile App Development

Surge in Mobile Wallet Usage

The demonetization of high value currency noted and restrictions on daily cash exchange compelled Indians to adopt cashless payment. Many consumers find it easier to use mobile wallets and payment options that debit/credit cards and net banking. The mobile wallets even made it easier for consumer to pay at stores and outlets that did not install POS machines. Hence, the surge in cashless payment increased the adoption rate of Paytm, Freecharge, Mobikwik and other mobile wallets within a short amount of time.

Net and Mobile Banking

The surge in cashless payment also increases popularity of net and mobile banking apps. Many consumers downloaded apps provided by their bankers to pay bills, order products online, transfer funds, and track account balance. Many users even downloaded and used mobile banking apps despite being skeptical of security of net banking. Hence, demonetization persuaded many users to adopt net and mobile banking apps.

Mobile Shopping

The absence of POS machines and lack of option to use mobile wallets compelled many customers to buy goods and services online. Many customers downloaded mobile shopping apps provided by both large and small retailers. A large percentage of such customers even use shopping apps to purchase groceries, fruits, vegetables and similar daily-use items. At the same time, the surge in mobile shopping also helped large online retailers like Amazon and Flipkart to drive sales by allowing customers to choose from multiple cashless payment options.

Hotel Booking

Despite the cash crunch created by demonetization entrepreneurs and professionals have to travel frequently throughout the period. The entrepreneurs and professionals find it convenient to book hotels through popular hotel booking apps like OYO Rooms, Goibibo, MakeMyTrip, and Trivago. The multiple payment options provided by the hotel booking apps further make it easier for users to book hotel rooms despite the cash crunch. Some apps even acquired new users by providing attractive offers and discounts.

Taxi Booking

The cash crunch created by demonetization made it difficult for passengers to pay taxi and auto rickshaw fares in cash. Many passengers switch to taxi booking apps like Ola and Uber to take advantage of cashless payment options. The competition between the leading taxi booking apps further made it easier for passengers to avail attractive deals. That is why; demonetization helped taxi booking apps hugely popular among Indian users.

Expenses Management

Demonetization compelled Indians to explore various cashless payment options. Many customers switched to mobile wallets and mobile/net banking to overcome the cash crunch created by demonetization. Hence, the customers need apps to track their online financial transactions and expenses. Many customers downloaded expense management apps to monitor and track their expenses. Certain expense management apps even enable users to find the nearest ATMS.

Innovative Mobile App Marketing Strategies

The cash crunch created by demonetization made a variety of apps popular among Indian users. But several enterprises launched innovative mobile app marketing strategies to accomplish more app downloads. In addition to communication with users directly through their mobile apps, the enterprises even offer coupons and in-app offers. The innovative marketing strategies helped many enterprises and financial institutions to make their mobile app popular.

On the whole, demonetization of high value notes affected several Indian industries including mobile app development. The resource constraints created by the note ban persuaded many entrepreneurs to focus on their websites’ mobile user experience. Also, many enterprises opt for cross-platform mobile app development to overcome resource constraints. But demonetization still contributed towards making certain category of mobile apps popular among Indian users.