Indian kirana store owners are swiftly turning to alternative payment apps for their business transactions after the Reserve Bank of India recently slapped restrictions on Paytm Payments Bank.
According to a survey by Kirana Club, 69 percent of respondents relied on Paytm QR codes for daily transactions at their stores. However, within less than a week of the RBI's announcement, 42 percent of Indian kirana stores have moved to other payment apps, showing a rapid adoption of alternatives.
The RBI imposed significant limitations on the functioning of Paytm Payments Bank Ltd (PPBL) on January 31. It mandated Paytm Payments Bank to stop accepting deposits or top-ups in its customer accounts, wallets, FASTags, and other related instruments starting from February 29.
Read more: Tough times ahead for Paytm Payments Bank as RBI refuses to offer any concessions
The survey noted a decline in trust among retailers in Paytm, with 68 percent expressing lower confidence, while 20 percent respondents indicated their intention to shift to other payment apps in near future.
Among the retailers who have initiated or are considering the switch, PhonePe emerges as the preferred choice for 50 percent of respondents, followed by Google Pay at 30 percent, and BharatPe at 10 percent.
Read more: Paytm stock extends fall, falls by 10% after RBI tough talk on non-compliance
“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 started using or plan to use other payment apps to ensure smooth business operations,” said Anshul Gupta, Kirana Club Founder and CEO.
The survey also highlights a growing trend towards cashless transactions at grocery and local kirana stores, particularly evident in states like Uttar Pradesh, Jharkhand, Rajasthan, Bihar, Madhya Pradesh and Haryana. In these regions, around 70-71 percent of kiranas rely on Paytm QR codes for customer payments. However, states like Maharashtra and Chhattisgarh show slightly lower adoption rates, with 57 percent and 65 percent of kiranas using the Paytm QR codes.
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