Can we blindly trust them? Small retailers are feeling the e-wallet pinch

Lack of good network connectivity is the single biggest problem that e-wallet users are facing

In their haste to find alternate payment gateways in the post-demonetisation era, Delhi’s smaller retailers are realising that going digital isn’t going to be the smooth ride they’d expected. “Initially, when I started using an e-wallet, I expected it to improve my sales, which had flagged considerably after notebandi,” says Ghanshyam, a fruit juice vendor in Dwarka. “But that didn’t happen. My sales continue to be affected by the cash crunch in the market, perhaps because many of my regular customers don’t own smartphones – without which one can’t use e-wallets…” Even for people who own smartphones, e-wallet providers Paytm, Mobikwik, PayUMoney, Citrus Pay etc need to fix several bugs to facilitate efficient transactions.

Lack of good network connectivity is possibly the single biggest problem that e-wallet users are facing. At the Christmas mela last week at ChampaGali, a bohemian hangout in Delhi’s Saidulajab near Garden of Five Senses, customers were walking around, waving their smartphones around in a futile attempt to get enough cellphone signals to pay their bills. “Someone just advised me to get a Reliance Jio SIM card, create a WiFi hotspot, and then use my e-wallet,” fumed one of them. At the Mother Dairy in Safdarjung Development Area, customers who wish to pay through Paytm have to walk a couple of hundred yards away from the shop, where cellphone signals are strong enough to scan the retailer code and pay.

Many retailers feel that the cap on e-wallet transactions is unnecessarily restrictive. At INA Market, dry fruit vendors aver that before the Reserve Bank of India doubled the monthly limit on e-wallet transactions from ~25,000 to ~50,000, most of them maxed their e-wallets one the first day they used them. While none of the e-wallet providers are currently charging a wallet-to-bank account transaction, the amount that can be transferred at a time is too small to be viable long term for most retailers. For example, Paytm allows wallet-to-bank account transactions of up to ~5,000 daily, and the monthly limit is ~25,000. “It means that much of our earnings will have to remain in the Paytm wallet only,” says Ghanshyam. He’s relatively lucky, for he’s been able to buy his raw materials – vegetables and fruit for juicing – from a wholesaler who has also begun to use Paytm. Others aver that they’re stuck with money in their e-wallets – but can’t use it to buy wholesale stocks as they require only cash payments. Neither can the vendors who have migrated from villages across India use e-wallets to send money home – for the options of using e-wallets shrink greatly in rural areas.

Unfortunately, small retailers have few other viable options at this time. In INA Market, entire rows of shopkeepers have applied for point-of-sale (PoS) credit card readers, but the queue is almost as long as that outside ATMs. For itinerant vendors selling low ticket items, credit card payments are simply not financially viable. In fact that is why National Association of Street Vendors of India (NAASVI) responded to notebandi by immediately creating a training module on e-wallet usage for street vendors.

“It is imperative for our stakeholders to learn about these alternative payment gateways,” says Arbind Singh, national coordinator of NAASVI. “Else, they’ll face loss of business inthe short-term, but also the prospect of permanently losing customers who’re going to be forced to shop from bigger retailers who already accept digital payments.”It’s not just street vendors who are hastening to adopt alternate digital payment gateways, by the end of this week, all the 798 Mother Diary milk booths and 326 Safal stores across Delhi-National Capital Region will start using Paytm, in addition to the State Bank of India Smart Card currently in use in some of these outlets.

However, before e-wallet majors can make further inroads on, what many have dubbed a captive market created by the government, they need to gain trust and build relationships with vendors. As of now, stories of transactions botched because of high traffic or low network connectivity are currently making many traditional retailers antsy. “This notebandi is forcing us to rely on relatively new private companies that we don’t trust like we trust banks,” says Balbir Singh, who has a small export surplus garment kiosk in Sarojini Nagar. “My father didn’t even trust banks! All our money was kept under his bed…” 

He points out that internet start-ups are notoriously short-lived: “If my e-wallet company shuts down, what recourse will I have to recover my money?” he asks. Singh is waiting to receive the PoS credit card reader he applied for after November 8, but says he’d rather lose business than follow this brave new trend of embracing e-wallets. As of now, Singh insists on cash from his customers – and usually gets it. “Obviously, business isn’t as good as it normally is at this time,” says he. “But I’m satisfied that whatever I earn is in my real wallet – not an e-wallet that I can’t even hold!”

Plugging holes in e-wallets

* Even for people who own smartphones, e-wallet providers Paytm, Mobikwik, PayUMoney, Citrus Pay etc need to fix several bugs to facilitate efficient transactions

* Lack of good network connectivity is possibly the single biggest problem that e-wallet users are facing

* Many retailers feel that the cap on e-wallet transactions is unnecessarily restrictive

* However, before e-wallet majors can make further inroads on, what many have dubbed a captive market created by the Centre, they need to gain trust and build relationships with vendors. As of now, stories of transactions botched because of high traffic or low network connectivity are currently making many traditional retailers antsy