e-transactions hit as cash flows again
By Christin Mathew Philip | Express News Service | Published: 15th March 2017 02:56 AM |
BENGALURU: With the Reserve Bank of India (RBI) removing withdrawal limits four months after demonetisation was ushered in, vendors and consumers are returning to cash mode from e-wallets.
Though the Union government is encouraging people to go cashless after demonetisation, many shopkeepers say the number of customers making e-wallet payments has dropped over the past few weeks. Another factor for switching back to cash has been the steep transaction fee levied for card usage and occasional transaction failures caused by connectivity, bandwidth and server-related issues.
Many customers complain that some vendors are discouraging cashless payments. “It’s because of demonetisation many shops have now facilitated point of sale terminals but some vendors are asking us to pay upto 3 per cent extra on the bill amount claiming that the bank is imposing charges on each transactions. Why should I pay through card if I need to pay extra?” asked Rashmi S, a resident of Indira Nagar.
On the other hand, vendors said they want government to waive off transaction charges. “If government wants cashless economy, then they should instruct banks not to levy heavy transaction fees. Our profit margin is already less,” said K Ramesh, who runs a shop in Madiwala. Some shopkeepers are skeptical because of transaction failures and security concerns.
“I have lost nearly `5,000 because of the failure in transactions. While more private digital wallet companies are approaching me after demonetisation but still I am not confident whether these e-wallets are secure and safe. So I always prefer to accept payments by cash. I am accepting cashless payments for those who don’t have cash,” said K Manjunath, who runs a hotel in J P Nagar.
All India Bank Employee Association (AIBEA) general secretary C H Venkatachalam said demonetisation has helped only private digital wallet companies. “While cashless transactions has so many advantages but most of the digital cash wallets are not fool-proof and vulnerable to cyber threats,” he said.
He said more than 90 per cent of the citizens in the country continue to use cash transactions. “Cashless payment is restricted to a particular section of the society even after the demonetisation,” he added.
When contacted, Paytm and MobiKwik were unavailable to comment. Shailaja Kumar, vice president (Enterprise Sales) Zeta, a digital wallet firm said, “Banks are going to charge taxes and cess after certain limits of cash deposits and withdrawals which will push customers to get back on the digital platforms.”
He added, “Since the last budget Government of India has set a limit of `3 lakh for cash transactions from April 1 we will see digital transactions for any amount which is more than the set limit. We will see an economy where cash and digital payments will co-exist.”
While many banks said the demand for point of sale terminals has increased after demonetisation but RBI records shows that digital transaction has dropped in February compared to January. The cashless transaction is expected to dip further after RBI removed withdrawal limits but there are complaints that many ATMs in the city still don’t have cash.