PUNE: While revisiting demonetisation and the dream of digital India as we are approaching the first anniversary of demonetisation on November 8, Sakal Times found that most of the small retailers and grocers in the city, who had earlier adopted the cashless system, have now gone back to square one i.e., cash payments.
LOSS FOR SMALL TIME RETAILERS
Speaking to Sakal Times, Suryakant Pathak, Vice President of Federation of Trade Associations of Pune (FTAP), said, “Small retailers are reluctant to do cashless transactions as with each transaction, they lose around 1.5 to 2 per cent of the cost. Payments with Visa/Debit/Credit cards lead to these losses and the government is not promoting the Indian ‘Rupay’ cards that don’t incur any additional charges for cashless payments. So it’s obvious that the retailers prefer cash payments instead of bearing huge losses.”
Indraneel Chitale of Chitale Bandhu Mithaiwale also added that small time retailers are certainly facing problems due to digital modes of payments and it is not much of an issue for bigger businesses.
“We have 20 outlets in the city, so although, we also lose a certain percentage of the cost to the banks, our high transaction value balances it out for us,” Chitale said.
Rajendra Vaidya of RP Vaidya grocery chain in the city also echoed the same opinion saying that they still offer digital mode of payment to customers at all their outlets.
Stating one of the impacts of demonetisation on the retailers, Ajit Sethiya, National Vice President, Confederation of All India Traders, said, “If you check the stocks of the retailers this March, you would find them reduced by around 50 to 60 per cent than earlier. As the buying capacity of people reduced after note ban, retailers started investing less in stocking up goods to prevent losses.”
However, one of the former members of Poona Merchants Chamber said that although, the retailers prefer cash payments, when they buy goods from the wholesalers, around 80 per cent of the payments take place through cheques.
Along with all other factors, there is a need for a behavioural change among people to bring about the transition from cash to card successfully.
Indraneel Chitale added, “The number of consumers using digital modes of payment like card or mobile wallet went up to 90 per cent at the time of demonetisation, however, by January, that is around two months later, the number came down to 60 per cent. Today, the ratio of the card to cash payments is around 45 to 55 per cent, which is almost as much as it was before demonetisation. As cash inflow increased, a large number of consumers have now gone back to cash payment despite the availability of cashless facility at stores.”
“Awareness is needed to bring about a behavioural change in consumers. People need to be educated about the benefits and the need of going cashless,” Sethiya added.
Chitale pointed out that poor network, too, sometimes stops shopkeepers from accepting card payments. He added, “The government really has to work on the front of improving network connectivity for digitisation to succeed. Many a time, we have PoS machines and consumers are ready to pay by card, but there is no network to make the card work.”
ONE YEAR OF NOTE BAN
One year after demonetisation, has Pune really moved towards online transactions in all walks of life? Or does cash still rule the roost? Sakal Times explores in this series.