Since the last four years, India has seen some dramatic changes in the functioning of businesses. From demonetization to digitization, and then to GST, the country has been changing gears to match the speed with which the world is growing. One such initiative pushed by the government is digitization. Since the 2016 demonetization, there has been ample growth in digital payments and driving businesses through digital channels. But there is lot more ahead to be done in order to cover maximum of businesses into the ambit of digitization.
The first point that one needs to understand while advocating digitization of small businesses is that the process should be to enhance productivity rather than making a liability out of the same.
Empowering the ones who need the most
Digitization is much required for those who want to reap maximum in their business. Let’s say, the businesses that mostly deal with collecting money. Distributors and wholesalers at micro level businesses face the usual trouble of collecting cash by visiting each and every store where they would supply their goods. The process consumes time, man power, travel cost and bears the risk of crime by way of money extortion. Digitization helps them to simplify the entire transaction. They can transfer and receive money online using different methods of payments. Within a small span of time, there has been 25% rise in digital payments from 2% for these micro level businesses in the last three years. They also saved time of 40-50 hours which would usually go waste in collecting money because of an enabled money flow. We are also talking about reduced stress and increased business productivity.
Reducing Barriers for the Newcomers
The biggest obstacle digital payment business faces is the barriers coming in between the new user and the digital system. It starts with the technology that is new for the user. Secondly, micro retail businesses face lack of trust in customers while trying digital payment methods. Thirdly, cost rise due to installation of digital payments becomes a liability sometimes for such small businesses. Proper internet connection, electricity supply for the key hours in small places is still a challenge along with smooth operation of digital payment devices. POS machines also attract monthly charges along with operational skills. Moreover, generation of cash memos, digital payments etc. requires a computer which may not be affordable for small businesses or at least they can’t afford to use it effectively while running their business.
This remains to be a challenge that should be countered and solved to a logical end in order to maximize digitization among micro businesses.
Glitches that should be removed at the Earliest
While carrying out payment through card, mobile wallet or the like, many of the customers have faced intermittent internet connections, glitches during payment, time loss and many other such obstacles which directly discourage digital payment among the users. Many customers who are keen to use digital payment methods often find that businesses aren’t equipped with digital payment methods especially at critical places. For example, they still need thousand rupees in cash while filling oil in their vehicles which certainly reduces the essence of digital payments.
Though the metropolitan cities have done well encouraging digital payments, small cities and rural areas still require a big push to go digital. This can only be possible by removing petty glitches, making fast and smooth internet connection a reality, and reducing cost of installation of digital payment devices. Many small businesses have faced the problem of high cost involved installation of digital payment methods, especially the POS machines. For busy retailers it becomes tough to manage business when digital payment starts to take time. Thus many prefer cash payment to reduce hassles.
A true digitization can only be seen when small issues are resolved and it is ensured that digitization reaches every nook and corner of the country to enhance productivity.