70% buyers of cell phones now opt for non-cash payments

New Delhi: Non-cash mode of payment for mobile phones has risen to around 70% of overall sales compared with 20-30% a couple of years back, which have so far insulated handset sales from the cash crunch that’s affected several states, as opposed to the drastic impact during demonetisation.
Retailers and industry executives said purchases through credit card, debit card, e-wallets that offer cash backs and zero cost equal monthly instalments given by finance companies, have risen dramatically.Most of the cash sales are now seen mainly in the rural or semi-urban areas, they explained.
“We have not seen any effect of the cash shortage so far, mainly because people buying through cash have reduced a lot,” said Subhash Chandra, managing director of Bengaluru-based mobile phone retail chain Sangeetha Mobiles.
“Our sales through non-cash mechanisms have gone up to nearly two-thirds of overall sales, compared with say around 40% some years back,” he said.
Avijit Mitra, chief executive officer at Croma, said the cash purchases done through their stores have come down to less than 20% over the past couple of years. “Today, 55-60% of our sales are done through cards, while EMIs and e-wallets like Paytm make up another 20-25%.” He added that cash transactions have now become limited to small-ticket items such as accessories and chargers.
The picture is in sharp contrast to last quarter of 2016 when the government banned ₹500 and ₹1,000 notes owing to demonetisation, which led to a sharp decline in handset sales, as cash in hands of consumers dried up.
According to International Data Corporation (IDC) India, feature phone shipments declined by 24.6% and smartphones sales dipped by 17.5% sequentially, in the quarter ended December 2016.
While some parts of the country are experiencing limited availability of cash, the Reserve Bank of India and the government have assured of more than adequate supplies in the system.