Consumer goods majors push e-payments after note ban

Nestle joins hands with NPC; Samsung launches integrated mobile payments service

After getting hit by last November’s note ban, with much loss of sales, prominent consumer goods companies are now promoting cashless transactions.

Nestlé, PepsiCo and Samsung are examples of the recent trend, of either streamlining internal transactions through the digital mode or luring consumers with an integrated mobile payments platform.

Fast moving consumer goods (FMCG) entity Nestlé India had lost an estimated Rs 100 crore in retail sales during the December quarter, after demonetisation. It has partnered with National Payments Corporation of India (NPCI) to educate and enable its retailers to adopt the digital mode of transactions. 

“We are actively encouraging retailers to come out to digital platforms. All our partners, HDFC Bank, NPCI (are being involved) to ward off the fear among traders on the digital mode. We are playing the role of a positive facilitator,” Suresh Narayanan, chairman of Nestlé India, told this newspaper.

Nestlé’s focus would remain skewed toward smaller cities and towns, where trading is primarily done against cash. Apart from increasing the level of transparency in the trade, the initiative is also a precursor to the coming goods and services tax, he said. Transactions till the distributor levels was already being done through the digital mode.

Dabur India is also dealing in a cashless format till the stockist and wholesaler levels.

Beverage major PepsiCo India said it has begin a project in this regard. “Over the past couple of months, we have undertaken an extensive education and awareness drive among (our) eco-system partners, as well as internal sales teams. We have a three-pronged approach to support the move to a less-cash economy. First, we are working with e-wallet companies to spur acceptance and enrolment among retailers. We are also in talks with select public sector banks to evaluate solutions that will be best acceptable at the consumer and retailer ends. Third, we are working to create a consortium with partners and industry players to enhance digitisation of the trade,” said a company spokesperson.

According to T R Ramachandran, group country manager, Visa India and South Asia, a recent survey done by Visa found 90 per cent of consumers in India are interested in making a purchase via mobile payments in the next six months, and more people (30 percent) feel mobile payments are safer compared with cash (21 per cent).

Consumer electronics giant Samsung has launched Samsung Pay, a platform which, globally, allows users to make seamless transactions by using credit cards. In a first, Samsung India has tweaked its application to also incorporate debit cards. The rationale being the significantly large user base for the latter in this country, said Asim Warsi, senior vice-president, Samsung India Electronics. 

By government data, as of end-2015, the number of debit cards issued in the country was 636.85 million; credit cards numbered 22.74 million.

Samsung India has partnered with Visa, MasterCard, American Express, Axis Bank, HDFC Bank, ICICI Bank, SBI Card and Standard Chartered Bank. It has also brought in mobile wallet firm Paytm and Unified Payments Interface (UPI). 

Manoj Adlakha, chief executive of American Express’s India operations, said the initiative would help increase digital payments and it would promote the mode through merchants.

“To meet the fast and continued growth of mobile transactions, Visa has partnered with Samsung to introduce technologies that will significantly reduce the risk of payment fraud,” said Ramachandran from Visa.