Traders, vendors express misgivings about cashless transaction

Only the educated and upper class are going for cashless transaction as many are still afraid of their money being stolen, says a trader

Nearly 15 days after demonetisation, Vamsi Krishna adopted an e-wallet for ensuring that his tea stall business did not suffer. One month later, he cannot be happier. “I have done about Rs. 20,000 business with Paytm in the last one month. Right now, there are no transaction charges, but once they impose it, I will see what I can do,” says Vamsi, who has done MCA and runs the stall on a pavement at Ashoknagar along with a kirana store.

“About 35 per cent of my business is done through Paytm now. It has been a great help at a time when business slumped after withdrawal of Rs. 500 and Rs. 1,000 currency notes,” says Vijay Reddy, who has finished his B.Tech and now helps his father run Durga Mess abutting the main road near RTC Crossroads.

“We have four accounts and all have crossed the limit of Rs. 20,000. If you have cash please give that,” the book keeper at a restaurant at Ameerpet tells a diner.

But the good news about online payment is not shared everywhere. “Only 5 per cent of the business is through Paytm. But the volume of business has shrunk. Many people are waiting for the cash situation to ease before they get their work done,” said B.V. Narayana, who runs a photocopying shop.

While many businesses in the city, including barber shops, panwallahs, chat vendor, have adopted prepaid payment instruments (RBI jargon for e-wallets), they are still wary of the long-term prospects of cashless transactions.

“This area has lot of hostels and coaching centres where students from other parts of the State come and live and they have adopted cashless transactions, but we still get people who confuse Paytm with ATM and Freecharge with recharge. I don’t try to explain to such people the use of this,” says Vijay Reddy pointing to the square sticker with blue band.

“Only the educated and upper class people are doing cashless transactions. Many people are still afraid about their money being stolen,” says Shankar, who has adopted two e-wallet systems in addition to the POS machine he had for the past 12 years at Nacharam.

Many customers as well as businessmen expressed doubts about the cost of cashless transactions post December 31, when the waiver on charges ends.

“For every digital transaction, the merchant pays 2 to 2.5 per cent to the company enabling that (Visa, Mastercard, Paytm etc). If Rs. 100 gets transacted 10 times in a week, then there is that charge paid 10 times. This cost is passed on to the consumers by the businesses. There is no such cost when cash is transacted. So, digitisation has a huge cost to the economy,” says Ajay Gandhi, a Chartered Accountant.

Not surprisingly, the figures released by the Reserve Bank of India (RBI), which has been issuing daily bulletins about the volume and value of cashless transactions, doesn’t even show a bump (see chart).