The government’s demonetisation of ₹500 and ₹1,000 currency notes has led to the meteoric rise of Paytm, India’s largest digital wallet and payment company.
Third week into the country’s acute cash crisis, Paytm clocks over seven million transactions every day, worth ₹120 crore. The company said its transactions were more than the “combined average daily usage of credit and debit cards”.
Meanwhile, it added 1.5 lakh offline merchants to its network, taking the tally to over a million merchants. This helped the company serve 45 million users in the days of demonetisation, as money added to the wallet grew by 1,000%, app downloads 200%, and offline transactions 400%.
But rising Paytm usage among shopkeepers and small vendors is making their lives difficult as wholesalers, bigger merchants in mandis, and company distributors have not begun using the wallet.
Faizan Quershi, who has a meat shop in Delhi’s Chittaranjan Park, said, “I use Paytm, but the person I buy meat from doesn’t … I will have to spend this money elsewhere,” he said.
Vegetable dealer Subodh Bhagat has the same problem. In fact, he has stopped taking Paytm money. “My customers are insisting on using Paytm, but when I went to the mandi on Saturday, they would only take cash, or give me credit,” he said.
The situation is similar for many neighbourhood grocers, too. “We are using Paytm as the last option, but it would be nice if companies, distributors and wholesalers we buy from also do the same,” said Raghav Mallick, a Delhi-based grocery shop owner.
That leaves the commerce channel open. There are other limitations, too. Without completing know-your-customer details, Paytm allows a transaction of only ₹10,000. With KYC, the limit is Rs 1,00,000. “That’s too less for a mid-size store like ours,” said a grocery store in Delhi’s Greater Kailash-II area.
“When the cash is back, it will be a challenge. We will have to see how policy helps digital payment,” said Sanchit Vir Gogia, chief analyst of Greyhound Research.