In a recently concluded conference (September 5th & 6th, 2013) from IAMAI's payment arm PCI (Payments Council of India), industry experts from the payments space came together and discussed the way ahead. There were many takeaways from the conference. One of those was a report from Visa titled “Road to Less-Cash.”
According to the report Visa conducted a survey to understand the preference of Indians towards carrying out cashless transactions. The survey spanned eight locations and involved 3066 rural and urban households. Team Lets Talk Payments makes an effort here, to highlight some of those findings.
According to the findings, 96.4% of households in India still make cash based transactions and only the remaining make up for the cashless transactions. If we compare urban and rural households, about 11% of the urban households are involved in making cashless payments whereas 0.43% of rural households make cashless payments. Indians prefer to make cashless payments for the following:
- Rent (11%)
- Electricity (4%)
- Clothing (7%)
- Footwear (5%)
- Education (4%)
- Beverages (3%)
Some of the stats shared above can be seen below in a form of a slideshow for reference:
- The survey points out that individuals who have Master’s degree or a PHD are most likely to take the cashless route. Salaried professionals whose monthly income is between the range of INR 75,000 to 100,000 indulge more in cashless transactions. These findings indicate that both education and salary levels significantly influence the adoption of cashless transactions by the Indian Population
- The survey also highlights that cashless transactions are higher where PoS acceptance network and retail awareness of cashless transactions is high.
- The major reasons why the cashless transactions volume is still low is due to the following:
- Merchants not accepting them
- Cashless transaction limit amounts (as prescribed by RBI) are low
- Lack of availability of instruments/devices that accept cashless transactions
- Lack of awareness on the benefits of cashless transactions v/s cash based transactions
- Low faith and hope amongst entrepreneurs to start-up companies in payments space
Source: Road to Less Cash, report by Visa
The image above summarizes the survey findings highlighting payment patterns among households in India.