“Cashless” Equals Inconvenience!

Published: November 22, 2016 at 10:05 am

Last Updated on

The surge in cashless transactions since Nov. 8th is not a sign of India moving towards a cashless society. It is merely a sign of merchants making do, while situation the gets better. From what I see, the “situation” has gotten worse and is expected to be that way until the new Rs. 500 notes get into wide circulation.

When I make a cashless transaction these days, I avoid the possibility of long queues at ATMs or banks and perhaps some fringe benefits, aka cashback. But I am also shifting my inconvenience to the merchant with whom I am transacting.The merchant, in turn, could shift their inconvenience to their employees.

Consider a sudden increase in cashless payments made at a small establishment such as a bakery. The money from such transactions eventually hits the owner’s bank account. She then has to pay her employees – the baking and cleaning staff. These are real Indians – no smart phone, no internet, no atm card – who lives are peppered with small cash transactions made at small shops.

During normal times, the baker’s cash reserves should be enough for paying salaries in cash (in change, to be exact). During normal times, the bank would provide cash in Rs. 100 stacks and lower to shop owners. But these are not normal times. If the bakery is forced to go cashless in fear of losing business, the inconvenience gets passed on to the employees. And then there are people who buy a Rs. 10 cup cake, hand out a Rs. 2000 note and expect change!

cashless

A similar reasoning applies to the agency who sends a caregiver each day to look after my mother. Recently they got themselves a card machine. So I could swipe out the Rs. 15,000 or so payment that I owe them by month end. However, 70% of that money would go to the caregiver, another real Indian who problems that I do not bother to think about. How will the caregiver get paid if banks have only Rs? 2000 notes? How will agency manage to pay its employees if all their clients used their cards? Can I simply say, “not my problem” and pass on my troubles to others?

My point (which is going to met with a lot of criticism esp from younger readers) is, that a cashless society may (or may not) be a step in the right direction. However, an economic shock should not be and cannot be the catalyst for such a shift.

The real India (who will never read this) is not ready for it.  The real India is a fish out of water in an ATM kiosk. The real Indian does not know how to fill up an application form. The real Indian needs cash. Sorry, make then change.

This is the real problem. The real India has run out (or is fast running out) of change. The far-removed-from-reality Indians like me are busy calculating cashback benefits, feeling proud on social media about a digital India and do not have change. Banks have run out of change – Rs 100 and lower denominations. The good news is many ATMs are now working. The bad news is they are spewing out Rs. 2000 notes and nothing else (besides printing “cannot process” receipts).

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In the first week (since 8th), finding a working ATM was tough. In the second week, finding working ATMs, that provide Rs. 100 notes, is  proving difficult.

The demonetization announcement was well-timed: post-Diwali and eight days into the month. However, we only have about 8 days left in the month. However, come Dec. 1st or first week, salaries have to be paid – in cash to real Indians. Hopefully with the new Rs. 500 notes and at least a few Rs. 100 notes.  Else they are going to face the heat.

What do I care, I got me a nice wallet that offers 50% cashback. Thank God, I don’t have to stand in line. Let me go tweet about it.

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