How does Mumbai Pay?

The best part about feet on the street method that you start knowing things. I started working on my internship project in April first week and all I learnt & observed is ‘how does Mumbai pay?’ I travelled to roughly all the parts of Mumbai to understand the payment system in the market.

I went into around 600 shops asking them what they use to accept payment, why they use that specific way, why not digital payment system etc. The answers to all of these questions were interesting and could give the overall picture of Indian payment system. Out of this survey or research, I found out that approximately 80% transactions happen through CASH ONLY. I don’t have the numbers for the total value of the cash transaction but it is surprisingly higher than any other country. When I got to know the common thing in all the shops that they accept only cash for the exchange of goods, I asked them why you don’t use POS machines or PayTm type e-wallet or internet banking. Maximum people replied with only one word i.e. ‘TRUST’. People don’t have trust in all the other possible solutions available for the transaction.


Fortunately, I found few people using POS machines provided by banks. I asked them why you are using it when you can have cash transaction. They replied by saying “Aaj kal ke log ke pas cash nahi rehta, faltu me kyu customer lose kare?” Then one thing clicked into my mind, if these few people are adapting to the change just because they don’t want to lose the customers then why aren’t other people doing the same thing? After lot of survey I found out that there are few reasons that maximum people are not following the line of digital payment. Those reasons are as follows-

  1. Do not have trust on all digital services. Chances of frauds are high.
  2. There are so many ATMs around us, if customer doesn’t have cash we suggest him/her to go at ATM and withdraw money. We don’t lose customer here because customer is also in a need of that specific product.
  3. Hidden charges. We live on the very thin margin and if these machines are asking for commission which is eating my margin, why would I go with it?
  4. We don’t want to link our transactions to bank. We would prefer cash as it is available for us for the daily use.

All of the above things forced me think about the future. Nowadays, e-wallets are gaining the popularity in the market. Government is also trying to boost digital payment by giving the hints of UPI system. All in all, if we think from the different perspective, will we be able to accept the digital payment anytime soon? If yes, then what about the all above mentioned factors? Are they going to change in shorter run? If you observe, you will find that there is very less transaction between two individuals. Maximum transactions happen at the retailer point or at any goods exchange point. If all the merchants are not ready to go with the system then how will you reduce the use of cash? All of these questions will get answers in coming days only.

Happy Obervations!


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