Cashless cost unchanged while cost of cash transactions gone up: Survey

Moneylife Digital Team 18 April 2017

Economy & Nation

The slogan of ‘Going Cashless’ has been in front of our eyes continuously for the last five months. However, per citizens, the cost of cashless transaction continues to be the same as pre-demonetisation at 1-2% for debit card and 2-4% for credit card transactions. These charges, charged by banks, payment processors to merchants lead to merchants demanding cash from consumers. Citizens currently feel squeezed because while the cost of cashless has not reduced and the cost of cash transactions and availability of cash has reduced, says a survey conducted by citizen engagement platform LocalCircles.

A few months ago, various banks have introduced cash transaction charges where charges of as high as Rs150 per transaction have been imposed on more than four cash transactions (withdrawl or deposit) in a month. Also, charges for ATM usage after a certain number of withdrawals have been reintroduced leading to disincentivising cash transactions.

In a poll conducted by LocalCircles, 56% citizens said that they do not support the charges imposed by banks on cash withdrawal or deposits and wanted the charges to be rolled back immidiately. Surprisingly, 14% citizens said that they will support the charges but only once the cost of cashless transactions reduce. More than 11,000 people voted on this poll.

Acting on the consumer pulse, LocalCircles conducted a parallel poll and asked the citizens if the charges on credit card usage should be capped at 0.5% and the charges on debit card purchases should be brought down to zero. Out of the 8,900 odd citizens who voted, an over whelming 96% voted in its favour.

“We could conclude by saying that for India to become a successful cashless economy, the cost of cashless and digital transactions will have to be significantly brought down from the current levels. Till that happens, the cost of cash transactions must not be increased,” LocalCircles says.

Separately, in other Survey, the citizen engagement platform found that 43% citizens who visited an automated teller machine (ATM) between 13th and 16 April 2017 could not find cash.

LocalCircles says, 43% citizens told it that they could not find cash in ATMs between 13th and 16 April 2017. “This number has worsened from the 36% who had faced problems in finding a cash dispensing ATM between 5th and 8 April 2017. Over 8,700 citizens from across India participated in this poll sharing ATM experiences in their areas.

LocalCircles also conducted a citizen pulse check in 11 cities across India to find out that Hyderabad was worst hit with ATM outages followed by Pune. 83% citizens in Hyderabad and 69% citizens in Pune said that they were unable to find cash dispensing ATMs between April 5 – April 8. Delhi recorded the highest availability of cash dispensing ATMs with only 11% citizens unable to find money in the ATMs during the mentioned days.

Moneylife had earlier wrote on Where is the currency going and Why are ATMs dry?, and Pre-merger, Is SBI Heading Towards bankruptcy?

You can also sign on online petition requesting RBI Governor to Stop Banks Fleecing us Depositors! Here is the link

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