Prime Minister Narendra Modi’s announcement to demonetise the Rs 500 and Rs 1,000 notes has led to an economic upheaval across the country, crippling the common man because of the sudden cash crunch.
While the situation remains dire, many in the country have come up with innovative and out-of-the-box ideas to side-step the issue, by using something which is inherent to the Indian mentality, called jugaad (a colloquial Hindi-Urdu word meaning an innovative fix).
Take the case of Joginder, a 42-year-old resident of Himachal Pradesh who has been plying his trade as an auto driver in Delhi for the last 16 years. He is not bothered much by the demonetisation as he has set up a private 'e-wallet' on the popular payment platform Paytm.
Similarly, Rakesh Kumar, a tea-seller and cigarette vendor at Sector 16 in Noida, is equally at ease. “Three days ago, I got Paytm installed on my phone and many of my regulars as well as floating customers are paying through it. Immediately after the note ban, I got worried. I had to sell my products on credit, but now more than 50 percent of my transactions are electronic.”
This story is not just limited to Joginder, Rakesh Kumar or just using Paytm as a payment portal. They are the face of a digital payment revolution that represents thousands of petty vendors, next-door grocers, retail traders, cab drivers, autowallahs and even pan-wallahs, who have adopted innovative ways to accept hassle-free payments from their customers and keep their business rolling.
Many have even acquired PoS card swipe machines or RTGS (Real-Time Gross Settlement) facility to accommodate the cash restrictions.
“This has solved my payment problems as I don’t have to depend on handing people lines of credit anymore. I’m also looking into installing an online payment app. This will also solve the chillar (change, fraction money) issue faced, even before the note ban,” said Ajit Mondal, a vegetable and fruit vendor in south Delhi’s CR Park market, who has installed a PoS machine.
Pranoti Upasane, a homemaker from Vaishali (Ghaziabad) said, “I was taken by surprise when my three-decade old grocer told me not to worry about making a payment through cash, as I had none. He told me to pay either through credit/debit card or through RTGS facility.”
Immediately after the demonetisation move, local markets had witnessed panic and shock, and had seen a sudden plunge in business transactions. According to the Confederation of All India Traders (CAIT), an umbrella of trade and business associations, the trade in the markets across the country has reduced by up to 25 percent in comparison to normal days.
The small traders and vendors in the retail sector and local transport facility providers, however, have started to switch over to a cashless system. This can inadvertently also be seen as a step towards the Modi government’s Digital India initiative.
“Modiji has taken a big step against corruption, so instead of making a fuss about it I think it’ll be better for us to adopt the card or online payment system. It can go on along with cash transactions. Rather, I think that my customers are more comfortable as they don’t have to haggle over small denomination currency notes or coins,” Mondal said.
Here are some of the ‘jugaad’ ways being used to accept payments:
- Several petty shopkeepers and vendors selling grocery items and cigarettes are accepting payments less than Rs 100 through e-wallets.
- E-wallets services like Paytm, MobiKwik, PayUMoney, FreeCharge are being used frequently.
- RTGS system – online transfer of money from one bank to other.
- Use of debit/credit card swipe machines.
- ‘No cash-on-delivery’ – the delivery boy comes with a tag having a QR (Quick Response) code system at the customer’s doorstep. The customer gets the product code scanned and automatically the payment is made.
- Instead of refunding the balance amount, shopkeepers are now offering the customer with a mobile recharge (top-up).
A big boost to e-wallets
Demonetisation has also given a big boost to the e-wallet businesses.
“After demonetisation, our daily transactions grew from 2.5 million to 5 million, overall traffic increased by 700 percent. The company has even waived off its one percent transaction fee for transferring money to the Bank for KYC-enabled merchants to facilitate this shift in merchant behaviour. If a shopkeeper gives a missed call to us, our team member will be there to install Paytm at his place,” said Sonia, Paytm’s corporate communication executive.
Similarly, another mobile payment and commerce platform, MobiKwik, said that it had registered 40 percent growth in app downloads within 18 hours of the note ban. “Our overall traffic increased 100 times, app downloads is up by 200 percent and there is 18-times surge in our overall transactions,” said Jagriti Motwani, general manager (PR), MobiKwik.
“After rolling out the 'Zero Cost' offer, we have received thousands of queries and missed calls. Since Tuesday, our team has been signing up a merchant every 30 seconds. We are committed to making the digital transition swift, seamless and easy for our merchant partners,” FreeCharge CEO Govind Rajan said in his statement.
Besides the jugaads at the sellers’ end, the consumers have also switched over to e-commerce in a big way – from grocery to school stationery. Several online service providers have come up with cashless delivery of products in retails sectors comprising vegetables, fruits, grocery, stationery, sports goods, ready-to-eat food items, etc.
“I got my daughter’s school bag and stationery items through the online store Schoolkart.com. I didn't even have to step out of my home nor did I pay in cash,” said Malini Iyer, a mother of a 10-year old girl.