New routes to cashlessness? ICTs, demonetisation, and the Indian informal economy

2017-09-05T09:45:46Z (GMT) by Silvia Masiero
Information poverty, resulting from limited and distorted provision of relevant information on important matters, has increased the vulnerability of India’s poor to the crisis initiated by the announcement of demonetisation in November 2016. In this paper we draw on a study of digital finance providers and informal street sellers in Bangalore, conducted in the immediate aftermath of demonetisation. Using the theoretical lens of information poverty, we argue that technologies such as India’s biometric identification system (Aadhaar) do in principle help unbanked citizens obtain the digital identity that is needed to transact in a cashless economy. However, several design-reality gaps exist between extant financial technologies and the needs of informal street sellers, and digital tools seem to contribute only minimally to their integration in the new cashless system. Still, the marginalised communities affected by cashlessness hold highly valuable knowledge about the consequences of demonetisation, and use their first-hand information to enact a set of dynamic coping strategies.