Demonetisation effect: Kirana stores and Tea shops may soon swipe cards
Industry Trends
14-11-2016 00:00:00
Demonetisation effect: Kirana stores and Tea shops may soon swipe cards

The demonetisation of high denomination currencies, which is intended to check black money, hawala transactions and fake currencies in India, is believed to be the step closer to make the country less dependent on cash, and increase card transactions in small retail business establishments like tea shops, saloons, kirana stores and even paan shops in the coming days, experts say.


Smaller currencies are in demand now as Rs 500 and Rs 1000 are no longer welcome for pubic transactions. Roadside shops such as tea stalls or snacks corners are finding difficult to part with liquid cash of lower denominations to customers and are hence losing business.


Muthu Kumar, who is running a government registered road-side tea stall at the busy Ambattur Industrial Estate in Chennai, is selling around 400 cups of hot beverage every day, charging Rs 8 per cup. He says,  “Not everyone gives change, and many a times, I have to forego money for not having adequate change. If banks provide us card swiping machines in affordable charge, we can use them, as many of our customers are working in factories and offices nearby and have credit or debit cards.”


The demonetisation has also opened up an unexpected business opportunity for POS machine or Magnetic Card Reader (MSR) makers in India as they expect a sudden spurt of sales in the coming days.


Agrees Bhaskar Venkatraman, CEO of, the leading e-commerce portal exclusively for Point of Sale (POS) technology products such as POS Terminals, MSR, Hand-held POS Terminals, Mobile POS and Tablet POS hardware devices.


“Indian retail sector is in the cusp of transformation and the Prime Minister’s announcement of demonetisation of high denomination currencies has come as a step closer to make India a cash-less economy.  Several small traders will now opt for credit/debit card readers at Point of Sale to reduce cash burden on them and also on customers. This will also help faster checkouts and improve customer experience. Every transaction, however small it may be, will become accountable now. This will ensure healthy and transparent business environment in every sector and make the country economically stronger,” he says.


Sanjay Sharma, an IT professional in Bengaluru, however feels inconvenience and unsafe in swiping cards frequently for smaller amounts at unsecured business environments, says, “This will put the card holders at risk of losing sensitive information to data thieves and small transactions at frequent intervals will be difficult to record which will create confusion.”


"The number of enquiries over the last one week for our POS terminals has increased. We are getting calls for card readers from doctors, saloon owners, eatery shops, wedding planners, apparel shops, etc,” says Murugan Kesavapillai, CEO of Allmark Scales, which sells POS accessories like Electronic Weighing Scales, MSRs and POS terminals of various leading brands to retail businesses across India.


Bhaskar says, a large section of merchants who were traditionally attached to conventional transaction methods and were resisting to digital payment modes, will now queue up to install POS terminals at their sales counters. 


Will electronification of retail payment system in India an answer to black money and counterfeits? Only time will tell.

-K Ramanathan

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