Even before the draft proposal for promoting the usage of debit and credit cards was put forward, the Confederation of All-India Traders (CAIT) and payments technology company MasterCard were in the midst of a programme to get traders to move on to an electronic payment system and adapt them to the rapidly changing digital payment landscape.
The campaign has been moving across the country for a month now. CAIT hopes to reach out to 5,000 trade association and federations and touch 1 crore traders with this programme. “Currently, under 5% of the establishments offer customers facilities to swipe debit and credit cards, while for 94% of traders, it is an all-cash business, either out of ignorance or reluctance to offer electronic payment options,” Praveen Khandelwal, secretary-general of CAIT, said while launching the programme in Pune early this month.
CAIT was putting in place plans to get more traders on to the electronic payments platform through a cluster approach, as individual traders found this an expensive option to do on their own. B C Bhartia, national president of CAIT, said they were now looking at a cluster to shops getting together and offering a PoS (point of sale) machine for users to swipe their cards. “Instead of each shop keeping these machines individually, a group of 10 shops will share these ‘community machines’ and also share the costs,” Bhartia said. This way, more traders could be brought under the electronics payments fold and a pilot project is to launched soon, he said.
Ravi Aurora, senior vice-president and group head, MasterCard, agrees that electronic payments systems have not penetrated the small business segment. Large businesses are investing in technology and if small businesses do not do it, they will be left behind, Aurora said. Cash has a cost to it, so it is not free, but cards and e-payments provide the cheapest, safest and quickest way for businesses to make and receive payments, Aurora said.
It is seen that businesses grow significantly when these payment options are provided and traders will benefit through the growth of their business, he said. Traders are now under pressure to upgrade. They have started losing out customers, especially in the 18-to-30 years age group, who walk into the shop but do not buy, as the shops do not accept card payments, so they are being forced to adopt it, Khandelwal said.
Customers were also shifting to e-commerce companies, which was hurting traders. According to Khandelwal, from Diwali last year till December-end, traders suffered a 35% loss of business in 24 categories. Some of the categories that have been badly hit include gifts, dry fruits, mobiles, electronics, luggage, toys, apparels and computers.