A Study of Adoption of Cashless Payments by Retailers and its Impact on Customers in Akola City

Abstract

The demonetization of 500 and 1000 rupees’ currency notes by the Government of India in November 2016 was argued to be a drive towards cashless Economy, for curbing corruption. This sudden removal of currency and the time taken to introduce new currency created temporary cash crunch and prompted the consumers and sellers to look for alternative modes of payment. The small (unorganized) retailers were particularly affected by this phenomenon. This gave rise to evolution of cashless options such as POS (point of sale) machines for card payments and several mobile applications. The wide spread availability of mobile phones in the country and cheap data packages further increased the popularity of cashless transactions among customers and small retailers The current study aimed at capturing the current status of adoption of cashes payments in Akola city. It was observed that around 77.78% small retailers allow cashless payments in their shops. Also, cashless payments are estimated to contribute around 45% of the turnover of those retailers who accept them. Mobile applications are currently contributing to average of 63 total cashless payments at retail shops in Akola city.