Calcutta: For relatively affluent Indians, the plastic money has been their everyday lifeline and - after the demonetisation drive - their lifesaver. Now the pressure is beginning to tell on the cashless system too.
Credit card and debit card users have been complaining about transactions not going through or "link failures". A private sector executive recalled his experience at a city petrol pump on Saturday, as complaints about the system faltering persisted through the day. "I went to fill up the car at a south Calcutta petrol pump and offered an HDFC debit card. Although the pump had an HDFC terminal to swipe the card, it didn't go through. They tried all other public sector banks or Indian banks. Didn't work. Finally, it was swiped at the Citibank terminal but with a 2.5 per cent surcharge," the executive said. Zyan Rehman ran into the same problem while paying his grocery bill at a hypermart. "I took out my credit card. It wasn't going through. Finally, I had to empty my wallet," said Rehman, a surgeon. Banks have not yet come out with any official statement explaining why technical glitches were suffocating transactions at a time credit cards and debit cards were the only options before a large section of Indians. But banking sources said heavy traffic may have caused the congestion, thereby inconveniencing customers. The Centre and the Reserve Bank of India have been urging Indians to move towards a cashless society and opt for facilities like Netbanking, cards and mobile wallets. The country has around 24.5 million credit cardholders and 661.8 million debit cardholders. According to RBI data, 69.7 crore debit cards had been issued by July-end, up by 18 per cent from the July 2015 figure of 58.6 crore cards. Transactions at the point of sale - swipe terminals - by such cards stood at Rs 17,091 crore in July this year, compared to Rs 14,007 crore in the same month last year, clocking a 22 per cent growth. Credit card numbers had had increased by 18 per cent in July 2016, at 2.59 crore compared to 2.19 crore in July 2015. Transactions at points of sale recorded a 24 per cent growth to Rs 24,341 crore. But India continues to be a cash-driven country. The CII said in a statement today that India's "cash-dependence" was "extremely high with a currency-GDP ratio of around 12 per cent compared to 4-5 per cent in other developing countries". "High level of cash usage tends to slow down the flow of money through the economy. As we transition to a greater usage of fintech (financial technology) for payments, spending will rise, leading to additional economic growth.... This is an economic masterstroke by the Prime Minister and must be allowed time to play out," said the statement quoting CII director-general Chandrajit Banerjee. An employee at a high-end ethnic designer store confirmed that people indeed preferred to use cash, while apologising for not accepting payment because its lone card terminal showed link failure. "People generally pay in cash. But, of course, I understand there is no option left but cards. Could you come tomorrow and pay in cheque?" he said. Most banks outsource the operation of running the points of sale to IT companies. The banking sources said in the past, too, there had been instances when websites of airline companies offering cheap tickets had faced such problems. Consumers aren't buying the argument. "The least the government can do is ensure the IT backbone is ready if everyone is forced to move to online payment," said Rajiv Dutta, who had come out empty-handed from a grocery after he was unable to pay.