Bitcoin’s Path to Adoption in India: Serving an Underbanked Population
Awareness for Bitcoin has been steadily increasing in India, as online e-commerce merchants and small businesses have begun to understand the benefits of bitcoin as an international currency and as billion dollar tech giants such as Microsoft, IBM and VISA have begun to sponsor Bitcoin- and blockchain-related conferences, hackathons and meetups throughout the country.
India has an Internet user base of about 243.2 million people and the country’s e-commerce industry is worth $12.6 billion USD. India has the potential to become one of the largest Bitcoin markets in the world, given the country’s extraordinarily large remittance market, which currently is worth more than $50 billion USD.
Despite the growing remittance demands, much of India’s population is underbanked, suffers from poor payment infrastructures and lacks access to traditional financial services.
With the help of local bitcoin exchanges such as Bitcoin India and UnoCoin and tech giants such as Microsoft and IBM, many merchants and entrepreneurs are finally shifting toward bitcoin and beginning to recognize its advantages.
“From publicly available sources that diplay data transparently, like LocalBitcoins and Coinsecure, we see about $4 million to $5 million USD moving in Bitcoin in India every month,” Samuel Benson, CEO of Bitcoin India told Bitcoin Magazine. “Apart from that, the forums see few 100 BTC being traded as well. This is still early days, as a lot of businesses in India in this space are relatively new.”
Benson added that achieving mainstream Bitcoin adoption in India is not a hard task. He believes that as more Bitcoin startups continue to emerge, more merchants and businesses will turn to bitcoin.
“Bitcoin has to be simplified a lot more for viral growth,” Benson said. “When we look at numbers in India which point to the current distribution of payments, wherin 90 percent is cash, 7 percent is via checks and 3 percent is electronic, the cash part of this shows that it is a fairly decentralized system as it is.”
Making the switch to Bitcoin is not a tough one for India, he said. “In order for Bitcoin to quickly reach mass adoption, we need more Bitcoin-related business building up and working on this as a technology that needs to be polished and spread rather than a golden goose.”
A majority of Indian merchants accept payments on e-commerce platforms such as FlipKart using PayPal or credit cards. PayPal, known for its tendency to freeze payments and its high transaction fees, is extremely inefficient for merchants, especially for those required to pay their suppliers outside of India.
As a temporary solution, Bitcoin exchange and wallet service provider Unocoin launched a Bitcoin merchant processing platform, which any merchant can use to accept bitcoin on e-commerce platform sites. The company also has been working with the HighKart team to develop India’s first bitcoin-only e-commerce site.
Unocoin also has partnered with eTravelSmart, an online bus ticket booking portal, to allow Indian citizens to purchase bus tickets with bitcoin.
“The Bitcoin community in India is maturing, and people started understanding it now,” an eTravelTeam spokesperson told Bitcoin Magazine. “I see many bitcoin meetups happening in India. Now we are doing sales around five transactions, worth less than one bitcoin per month. We expect the sales to double month on month in coming days.”
Hackathons and Research
Microsoft and IBM have sponsored bitcoin- and blockchain-related hackathons in India. The most recent event was “HackCoin Mumbai,” which was joined by more than a hundred developers looking to build blockchain-based applications for payments, big data and digital experience.
The hackathon is sponsored by Microsoft, IBM and Citruspay, and the executives of these companies will participate in the event as mentors and panelists, Bitcoin Magazine reported previously.
“We were fortunate to be a part of these events as title sponsors as well. We had given out challenges with Bitcoin-related builds and got many entries from participants,” Benson told Bitcoin Magazine.
“This is heartening, because it is a huge change in the ecosystem compared to what India has been doing with Bitcoin over the past few years,” he said. “Larger companies are exploring the blockchain, and as they understand it better they will turn to Bitcoin as well. Almost eveyone at these events had heard about Bitcoin and were curious to know and build more.”