the goan I network
PANAJI
It was exactly a year ago on November 8, 2016 when demonetisation was announced. Soon after that, the central and state government made concerted efforts to make Goa a cashless economy. However, the ground reality is rather grim, as a year after demonetisation's announcement, alternate ways of payments, like swipe machine, BHIM and etc, are struggling to pick up in Goa.
The reasons for that are many, but the most common is that there are no incentives, either for a trader or for a customer, to go for cashless mode of transaction.
Ashish Thakkar, from M/s Mulraj Devchand Thakkar (a cement dealer), said, "On a 50 kg bag of cement, which is priced at Rs 340, our margin is only Rs 3. If we use swipe machines for such transactions, our margin will be reduced by bank charges, which amount to 1 to 1.2%. Moreover, customers also prefer cash, as they don't rely much on swipe machines."
It's not as if everyone is using cash for payments, but cash is still the king of the market. Retailers of high-value goods like apparels, fashion products and electronics have moved to swipe machines because their margin is higher. But, large part of trade, particularly of fruits, vegetables, meats and grains, is still in cash.
Few vegetable vendors and shops in Panaji Municipal Market had started accepting payments through Paytm last year, but most of them have now moved to cash.
A vegetable vendor, who didn't wish to be named, said, "The trade of fruits and vegetables is almost entirely in cash. Most vegetable vendors come from poor background and they don't even maintain current account with a bank. In such a case, it becomes very tough to use anything but cash for business."
Meanwhile, the central government has come up with a BHIM (Bharat Interface for Money) app. As a part of this initiative, banks are supposed to give a machine for free to small traders, which will help them in accepting cash-less payments. There is no cost attached to using these machines to make a payment, unlike swipe machines for debit/credit card. This machine uses finger impression and connects to a bank account through Aadhar. However, such machines are also tough to spot in the market.
A banker, on the condition of anonymity, said, "We are facing shortage of such machines at the moment in Goa. This is the reason that the use of BHIM app is not picking up."
Several traders complained that banks haven't provided them with debit/credit card swipe machines. An official from Vernekar Marketing (wholesaler & distributor of water-pumps), said, "We approached a bank close to our shop many times for a swipe machine, but they didn't have it. Later, we approached another bank and managed to get the machine."
Last year, National Payments Corporation of India had started a service, wherein people could dial *99# from their mobile-phones to get connected to their bank accounts. This service is hardly in use at the moment.
The only exception to this trend is petrol-pump transactions. Paresh Joshi, president, Goa Petrol Dealers Association (GPDA), said, "Even before demonetisation was announced, petrol-pumps had swipe machines. Moreover, oil marketing companies (OMCs) were encouraging petro cards 3-4 years ago. Therefore, infrastructure for cash-less transactions existed at petrol-pumps even earlier."
Joshi continued, "Before demonetisation, share of cash-less transactions at larger petrol-pumps was 25%. However, after demonetisation the share of cash-less transactions has increased to 50% at most petrol-pumps in Goa."
This is on account of two reasons. One, customers get a discount on the price of fuel when they use petro card. Two, a discount of 0.75% of transaction value is given to customers when payments are made through bank cards.
In case of petrol transactions, there are incentives for customers to make cash-less payments. But, such incentives don't exist otherwise, which acts as a roadblock towards making Goa cashless.
