Demonetisation of Rs. 500 & Rs. 1000 notes seems to have made much more awareness about digital payments via wallets then by advertisements shown earlier. Wallets have just arrived to India and have seen a increase in demand over the year. But after the demonetisation news people are using it more and more. Wallet companies are reporting a jump of 50%, 100% or even more in transactions. Will this growth go on or will dim out in next few weeks?
Customers can purchase items online by paying through Cards (debit/credit), Wallets, Cash on delivery, Card on Delivery. In offline world it is cash, cards, cheques and now wallets. During the time of demonetisation people are saying to do transactions by wallets instead of cards or cash. Let us take some scenarios.
- Small Transactions
- Paying by cash is fast and easy as compared to other methods. Daily we have to transact for small amounts. For food, grocery and local travel etc. We generally pay by cash and change is returned without much hassle. Time taken in transaction is least. Hassle of change
- Cards – Paying by cards is bit slow. Swipe card, enter amount, enter pin, print receipt, handover receipt. Takes more time, paper is wasted, machine has to be kept, internet connection required by seller. No hassle of change. Charges fee.
- Wallets – Faster than cards (depends on method). If QR code has to be scanned than it is faster. If waiting for a pin then it is slower than cards method. Requires smart phone, app, internet connection. Chances of error is much more like wrongly typed amount and multiple times amount given. Less secure as anyone having access to phone can make payments. No hassle of change. Charges fee.
- Generally a lot of paper printing is done for cards transactions. It is a slower process. Local stores will have to spend more time in collecting payments which would affect their business as waiting time of customers will increase. Local stores and other small amount service providers avoid using cards and wallet transactions.
- Large transactions
- Are generally accepted as cash, if travel is involved than through cheques
- Cards are not used for huge amount of transactions
- Wallets have generally a limit
In India where most of the transactions are small people will tend to prefer cash transactions only. At this time there could be increase in amount of wallets being created. More people are paying with wallets but with time these will become unoperated wallets as people would go for cash transactions.