You’re paying by card? You’ll get an extra 5 percent off on your purchase,” said the Bic Camera salesman in Tokyo with a grin as my friend stood at the counter with a Belkin gadget in one hand and a credit card in the other. She beamed back in return. The Delhi resident had already been told that she didn’t need to queue up at any refund counter in the basement or run to make last-minute claims at the airport; instead, she could do all the duty-free shopping she liked in the store itself, provided she had her passport handy. The story got repeated across Japan, as she hopped around the country interspersing sight-seeing with ceramics and electronics shopping, saving on tax and time.
People visiting Sweden have been reporting similar incidents for a while now—not the discount part, but the country’s preference for plastic. Most shops, museums, cafes and restaurants accept only card payments, say the visitors. That seems in sync with a recent report that 36 per cent Swedes do not use cash at all. Even banks don’t handle cash and churches take donations via mobile phones.
Holiday-makers returning from the UK this summer are reporting a similar trend. Not everyone is happy. A colleague complained that he was turned away from a bar for not carrying a card. “Imagine that. Who uses a card to pay for a pint?” Apparently, many people do. The bar that “spurned” him is not the only F&D establishment to no longer “have the facility to handle cash”; a wave of card-only restaurants, cafes and bars has hit Britain. Their happy owners talk about time saved on not having to count currency or visit the bank, as well as the comfort of knowing that they don’t have thousands of pounds stashed in the office.
Contrast this with ‘digital India’ where, just last week, a travel agent told me he’d charge 2 percent extra if I paid for bookings by credit card. He backed off when I said I’d just buy my tickets directly from the airline instead. He’s not the only one. My chemist refuses to accept payment by debit card, even for big ticket items. “I’ll have to charge you a transaction fee, and I don’t want that. Pay me later, just pay in cash.” When I point out that while getting his card-swipe machine, he must have signed an agreement with the bank that specifically forbids him from charging customers for the facility, he just grins.
Economists like the idea of a cashless society and see payoffs in lower transaction costs and an end to tax evasion. Critics talk about the erosion of privacy and an increase in inequality. Now I understand that in a country like India, where millions have little access to banking services, let alone cards, it’s difficult to get everyone into a digital cash network. But it’s not impossible. Services like Paytm have already made converts of low-income vegetable vendors and domestic workers, with nothing to lose or hide. By the end of the decade, with 700 million smartphone users in India, we’re likely to see the bottom of the economic pyramid migrate to a cashless way of life. But the question is this: who will change the chemist’s mindset?