Citizen engagement platform LocalCircles' survey, revealed that out of the 8,715 participants, 68 per cent said that majority of their transactions are now happening in cash. Only 32 per cent said that they still prefer using debit or credit cards as well as other forms of digital transactions to make payments.
India has majorly been a cash-based economy. The demonetisation move by the government in November 2016 put our country on the path of being a cashless economy. In the initial period, post the move, as the cash flow in the market was low; many discounts were offered to customers on electronic transactions.
Transaction charges were waived off and it looked like India was on the right path of reducing cash transactions and increasing online transactions. But three months after the demonetisation move, as the availability of cash improves, people are going back to cash transactions.
The trend shows that as the availability of cash is improving in the market, even the people who had started using digital payment methods after demonetisation are using cash for the majority of their transactions. Some of the major reasons outlined by the citizens for this were high transaction charges for debit or credit cards, less availability of PoS terminals at shops in local markets, cases of fraudulent transactions and so on.
Citizens also made many suggestions for promoting cashless and reducing digital transaction cost. Citizens want debit card charges to be zero. Also, people want maximum merchant charges on credit card and wallet usage to be fixed at less than one percent.
Citizens are also of the view that entities like Bhim and RuPay should have zero or minimum transaction fee and be aggressively promoted.