Unorganized sectors embracing digital payments amid demonetisation move

The unorganized sector has been battling plummeting sales after the government’s demonetisation drive


Unorganized sector enterprises are gradually moving towards digital payments. Photo: Pradeep Gaur/Mint
Unorganized sector enterprises are gradually moving towards digital payments. Photo: Pradeep Gaur/Mint

New Delhi: Faced with no other option but to accept cashless modes of payments in the short run, the enterprises belonging to the unorganized sector are gradually moving towards digital payments.

The unorganized sector, including grocery stores, small merchants, sweetmeat sellers or potters, has been battling plummeting sales after the government’s demonetisation drive.

The reason: cash collections was a major part of their daily business.

“In case of enterprises, many of their business has been crippled because cash collections is a big part of their business. Demonetisation has been a big trigger for the enterprise segment, most of them were in the process of slowly digitizing have now gone cashless. So demonetisation which appears to have short term impact has resulted in permanent transformation for enterprises which will be visible in the next two years,” said Sanjay Swamy , managing partner, Prime Venture Partners.

Rakesh Dhir, 50, the owner of Shahi Stores, one of the oldest grocery stores of Karol Bagh, said, “Before demonetisation, we never felt the urgency to go digital. With the drop in our cash sales by around 20%, we realized that digital payments have become the need of the hour.”

“Now, we have started accepting payments through Paytm and Mobikwik. I have completed the formalities for getting a swipe machine and it will be installed by next week. Had we been made digitally aware through workshops and demonstrations earlier, everyone would be comfortable making digital transactions by now and we would have recorded much more than 8-10 payment transactions that we receive on digital wallets on a daily basis,” he added.

The owner of Gillu florist, a popular florist at Connaught Place who accepts Paytm, said, “Now people who have cash, still prefer to pay using Paytm because they don’t want to lose out on the amount of change they have got with them on flowers.”

In the long run, all transactions will get digitalized which offers better accountability and no tax evasion, he said.

“The money that I receive as payments from my customers in the wallet can be used to pay my mobile recharges and electricity bills. I don’t have to bother about anything now, only a tap on the screen shows all my transactions which took a lot of time and effort earlier.”

Chandni Chowk, one of the busiest places in Delhi with a large number of small traders and merchants, had a different story to tell. Most of the businessmen had still not started accepting digital payments and a few which had, only knew about point-of-sale (PoS) machines.

“There has been a 90% decrease in the amount of total sales post demonetization. Almost 99% of the transactions out of the 10% remaining sales that we have is done using debit or credit cards,” said S. Solanki, manager of a small cloth shop in Chandni Chowk.

“Here the traders are gradually becoming digitally aware and we appreciate the idea of ‘cashless economy’ but we do not get proper help from companies or banks. I have tried calling up Paytm team several times to collect documents and verify my details but no one has turned up till now.”

Old Rajinder Nagar, one of the places in the city which is inhabited by aspiring young students turned out to be digitally advanced as well.

Naveen, 29, the owner of a small book shop in the locality, said, “Most of my customers are generally students who had been preferring to pay using Paytm or cards much before demonetization. We had to go digital because the customers wanted us to but definitely cash sales have gone gown drastically by around 50% in the last few weeks.”

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