A lot has been said in recent months about digitizing payments in India, and making the country a “less cash” economy. Weeding out black money was one of the priorities of the demonetisation drive. But setting aside for a moment the case of the economy as a whole, a closer look at banking operations shows us how much more efficient it is for banks to switch from cash to “less cash”. One of the reasons banking operations are expensive is the cost of handling and managing cash. In India, currency flows from the RBI to the public as follows:

How money moves

In this journey, the role of the banks begins from the currency chests / coin depots. The costs involved are:

  • Infrastructure costs
  • Printing costs
  • Logistics
  • Security
  • Man-hours needed for the transactions at the bank

Arun Tiwari, chairman and managing director of Union Bank of India, recently said1 that every manual cash transaction costs banks approximately ₹65 (in terms of manpower used and stationery). With ATMs automating a few types of transactions, like cash withdrawal, this cost reduced to ₹18. Online transactions further reduced this to ₹10, he said.

A fascinating study2 by Harvard Business Review analyzed the costs of cash in various countries across the world.


There was another interesting study by Tufts University – The Fletcher School on the cost of cash in various countries across the world. The study3 says that the RBI and India’s commercial banks “face a grand total of Rs. 21,000 crores (US $3.5 billion) in currency operation costs annually”.

With the world moving money to the electronic realm, OBOPAY has been playing the role of enabler. With our digital payments solutions suite, we have the capability to help financial institutions cut cash operations costs. We have played a role in digitizing payments in various countries in Africa, including Uganda and Kenya, and are quickly moving on to other geographies like Latin America, South East Asia and the Middle East. OBOPAY is in consultation with several Indian banks to help digitize payments.


Evolys, OBOPAY’s payments solution, is a secure and scalable banking grade platform with industry leading multi-geography compliance and audit capabilities. Its features include digital currency operations, agency banking, individual/group savings accounts and in-line fraud prevention, to name a few. With a flexible solution, a platform designed to accept macro and micro payments, a gamut of mobile payments functionalities, several layers of security, and a wide range of access channels, OBOPAY provides its clients a unified approach to payments.




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