New research reveals young micro merchants in India between 35 and 45 are most likely to adopt electronic payment systems.
According to the MasterCard Micro Merchant Market Sizing & Profiling Report, young merchants owning large and medium sized businesses, primarily in auto accessories, building fittings, medical, private cabs, and food & beverage sectors form the high potential segment.
The report identifies the number of merchants most inclined to trials of e-payments at 10%, that is, almost 5 million of the total 59.16 million known universe of micro merchants. Merchants cited potential increase in revenue (46%) as a strong driver for trials, followed by increased business efficiency (31%) and enhanced shop image (30%).
The MasterCard study interviewed micro merchants across India with a view to understand the market potential, key barriers to adoption of non-cash modes of payment and opportunities for enabling a less-cash society.
The study estimates the potential market size to be more than INR 23,000 crore weekly. Merchants acknowledged safety concerns and operational concerns related to a cash-driven business, with one-third (33%) admitting the need for presence of self or family member at the store to avoid pilferage. More than a quarter (29%) also agreed that they face operational efficiency issues related to cash such as time and effort to tally expenses and profits daily, and effort required to keep record of transactions.
Close to a quarter of merchants (24%) admit to having lost customers due to inability to accept card payments.
The report finds that merchants who are familiar with and personally own e-payment formats showed a higher willingness to consider adopting them for business (70%), compared to merchants who are unaware of e-payment methods (8%) or are aware but have never used it (14%). This reflects a direct co-relation between knowledge and familiarity of e-payments with willingness to adopt them, thus indicating a need to educate merchants about the benefits of adopting non-cash methods of payment.
The study identifies young merchants (age 35-45 years), owning medium sized businesses (6 to 10 employees) and large sized businesses (11 to 20 employees), based across Delhi, Mumbai, Chennai and Bareilly as high potential segments for adopting new technology and moving to a non-cash payment system.
To promote financial awareness and literacy among traders, MasterCard, CAIT and HDFC joined hands last year to launch a training program ‘Master Your Card’ organizing educational training sessions for Indian traders across the country. Since its inception in 2015, more than 50,000 traders have participated in trainings conducted in cities including New Delhi, Pune, Chandigarh, Jaipur, Ahmedabad and many others.
Additionally, e-Lala has been launched to support brick & mortar shops to embrace e-commerce as an additional platform to generate more business.
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