How do I solve the coin problem?

Are there any technology based solutions that will solve the coin shortage problem in India?

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  • Answer:

    Mobile payments. India has to bypass the conventional payment mechanisms and get on to mobile payments at a mass scale. The technology is already maturing in this space. http://en.wikipedia.org/wiki/Immediate_Payment_Service. Another related technology pioneered by an Indian company is the prepaid wallet - http://www.oxicash.in/.  Oxicash doesn't even require a bank account. The concept of mobile wallet is accelerating as shown by the infographic below. Given that a vast majority of India is unbanked/underbanked this could be a great solution for a variety of problems - from banking to black money avoidance to better accounting. The coin shortage could be a catalyst for more people to be moved towards this.

Balaji Viswanathan at Quora Visit the source

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I was asking this question to everyone around me - Why do we have such an acute shortage of coins in India? I got interesting answers, however not yet the right answer.... # 1. Everyday at the end of the day, most of us keep the entire day's coins (collected back after each transaction) in our homes, and never carry it back the next day. This certainly accumulates a lot of coins in our houses, and hence a shortage. (in-convenience factor) # 2. We do not feel the pinch of not getting back the 1, 2 or 5 rupee coins, instead we are given back the chocolates or something equivalent to make up for those 1,2 or 5 rupees. (not much value) # 3. People are stocking these coins to be sold at premium. Shopkeepers buy these coins at a massive premium, sometimes as high as 14~20% (hoarding) # 4. Banks have a quota of issuing only certain amount of coins per trader. (Supply side issue) # 5. Some people smuggle coins to countries like Bangladesh for the metal value. (For the old 20 paisa coins, there were getting out 25 value by extracting the aluminium). (arbitrage opportunity). However, I am not yet convinced that why do we have such a shortage of coins in India. For sure these reasons are too small to create a nation-wide shortage. I am sure some time soon I will get the right answer.

Sarsij Nayanam

Stored value cards which can be used at scale or automated coin machines where you give 100 rupees and get 98 coins of 1 rupee.

Abhisek Bhowmik

Although I am an engineer, I think rather than technology, local hacks can relieve the public from shortage of coin.  Because technology adoption for mass public is a huge headache for everybody. A local vendor over my place has started issuing stamped and signed advanced receipts for small change like 1,2 and 5.  So when you come shopping and you are to be paid 3.  He will issue 1 and 2 coupon.  This coupon can be redeemed at his place when you go shopping again.  This in turn increases loyalty factor as you will be forced to shop from him again.  it is more than 1-2 rupees eclairs.  Keeping change is everybody responsibility. Even yours as a buyer.  If you are going shopping for particular item and you know the price,  Keep the exact change in your other pocket or away from your usual wallet.  This in way controls the last minute shopping pangs.  Also saves you time and you end up giving the exact amount.  Not a single rupee less nor more. Another point which I have adapted is never let the piggy (bank) sleep.  What we people do is drop all the change collected during the day into our kids piggy bank.  This way huge amount collects in the piggy bank which may remain in it for months (and even years).  So rather than letting the money sitting over there idle, what I do is drop 10 Rs note and take out 7 Rs coin.  By that way, I always have the change in my wallet.  This relieves me from last minute search for change.  This saves me from unnecessary chocolates and toffees.

Bharat Agrawal

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