INVC NEWS
New Delhi : The 42% of Grocery Stores in India Distance Themselves from payment app, Paytm. This move comes in the wake of regulatory actions by the Reserve Bank of India (RBI) against Paytm Payments Bank, leading to a seismic shift in payment preferences among both retailers and consumers.
The Fallout: Decline in Trust and Market Share
The repercussions of the RBI’s clampdown on Paytm Payments Bank are palpable. With shares of Paytm’s parent company, One97 Communications, experiencing a downturn, the disengagement of grocery shopkeepers from the Paytm ecosystem adds another layer of challenge for the digital payment giant. A recent survey conducted by Kirana Club sheds light on the extent of this disaffiliation, revealing that 42 percent of kirana (grocery) stores in India have distanced themselves from Paytm post the RBI’s restrictions.
Survey Insights: A Shift Towards Alternative Payment Apps
The survey, encompassing 5,000 grocery shopkeepers across the country, unveils a clear trend away from Paytm towards alternative payment solutions. Approximately 20 percent of respondents expressed their inclination towards embracing other payment apps, underscoring a growing sense of disenchantment with Paytm post the regulatory intervention.
Further dissecting the survey data, it becomes evident that the loss of trust in Paytm is widespread among Indian grocery retailers, with 68 percent of respondents admitting to a diminished confidence in the platform. This erosion of trust has catalyzed a swift migration towards other payment apps, with PhonePe, Google Pay, and Bharat Pay emerging as the frontrunners in this exodus.
Preferred Alternatives: PhonePe, Google Pay, and Bharat Pay
Among the retailers contemplating or already utilising alternative payment apps, 50 percent have gravitated towards PhonePe, recognising its reliability and seamless user experience. Google Pay follows closely behind, with 30 percent of respondents opting for its robust platform. Additionally, 10 percent have transitioned to Bharat Pay, further diversifying the payment landscape in India’s burgeoning digital economy.
RBI Intervention: Impact on Paytm’s Future
The RBI’s decision to prohibit Paytm Payments Bank from accepting new deposits in its accounts and digital wallets from March 1 has not only precipitated a crisis of confidence but also raised questions about Paytm’s future trajectory in the Indian market. With a significant portion of kirana stores now veering away from the Paytm ecosystem, the company faces an uphill battle in restoring trust and reclaiming its erstwhile market dominance.
Navigating the Shifting Sands of India’s Digital Payments Landscape
As India undergoes a seismic shift in its digital payments landscape, the fallout from the RBI’s regulatory actions against Paytm reverberates throughout the retail sector. With grocery shopkeepers increasingly distancing themselves from Paytm in favour of alternative payment apps, the onus is on Paytm to adapt and innovate in order to regain the trust of both retailers and consumers. As the dust settles, only time will tell whether Paytm can weather the storm and emerge stronger from this challenging period of transition.
