Following a recent directive from the Reserve Bank of India (RBI) instructing Paytm Payments Bank to suspend services by the end of February, local kirana store owners are swiftly turning to alternative payment apps for their business transactions. According to a survey conducted by Kirana Club, a community representing Indian kirana stores, a staggering 69% of respondents previously relied on Paytm QR codes for their daily store transactions. Surprisingly, within just one week of the RBI’s announcement, 42% of Indian kirana stores have already transitioned to using other payment apps.
The survey also unveiled a concerning trend regarding the erosion of trust in Paytm among local retailers, with 68% reporting a decrease in trust following the RBI’s restrictions. Moreover, 20% of respondents expressed their intention to switch to alternative payment apps in the near future. Among the retailers who have either made the switch or are planning to do so, PhonePe emerged as the top choice for 50% of respondents, followed by Google Pay at 30% and BharatPe at 10%.
“Covid-19 pandemic has led the neighbourhood kirana stores to increasingly adopt digital payments. Over time, they have also realized the convenience of accepting digital payments as they do not have to go through the hassle of giving change to customers and money gets transferred to their bank accounts immediately. While the ban imposed by the regulatory authority might lead to disruption at kirana stores, they are not much worried because there are alternate payment options available. Our recent survey also indicates that kiranas across states have already started using or plan to use other payment apps to ensure smooth business operations,” said Kirana Club Founder and CEO Anshul Gupta.
The survey further highlights a significant increase in cashless transactions at grocery and local kirana stores, particularly evident in states like Uttar Pradesh and Jharkhand, where approximately 71% of retailers utilize Paytm QR codes to accept payments from customers. A similar trend is observed among retailers in Rajasthan, Bihar, Madhya Pradesh, and Haryana, with 70% of kiranas adopting this payment mode for their business transactions. However, the usage of Paytm QR codes is slightly lower in Maharashtra (57%) and Chhattisgarh (65%) compared to other states.
