Kirana stores to go cashless, says recent IIMB study

BENGALURU: A significant new study has found that 63 per cent of retailers in the countryside may now be inclined to use the cashless system of payment. The study reports a marked jump in the number of rural consumers willing to use mobile payments, post demonetisation, on par with their urban counterparts. In locations with moderate consumption levels, there is also a significant increase in shops that are prepared to pay a transaction charge in excess of 1 per cent.

Titled “Going Cashless?”, the research report covering perceptions, usage and behavior, toward digital payments, pre and post demonetization, was conducted by the Centre for Digital Financial Inclusion at the Institute for Financial Management & Research (IFMR) in collaboration with researchers at Digital Innovation Lab, IIM Bangalore.

Prof G Raghuram, director, IIM Bangalore, described the research report as a useful and timely one. “The focus areas now should be on the challenges, such as awareness creation and literacy. The other areas needing attention are issues surrounding infrastructure and connectivity. I hope all this has policy implications,” he said.

“There is a huge untapped potential for mobile payments at unorganised kirana stores, where most Indians go to fulfil their daily needs,” said Krishnan Dharmarajan, executive director, CDFI. “A huge chunk of 94 per cent of shopkeepers have mobile phones, of which 41 per cent were smartphones at the time of the March 2017 study. The recent influx of low cost smartphones bundled with internet, should further push the surging interest in digital payments across both rural and urban India.”

The report highlights that consumers’ push and interest in cashless system, peer pressure and perceived value of cashless transactions such as convenience are driving this change. Higher number of consumers are planning to use a cashless mode frequently in future.Although more consumers plan to use cards frequently than Mobile Payments the gap is narrowing.