MSMEs, shopkeepers use cash & cheque for majority of transactions

MUMBAI: MSMEs and shopkeepers are still using cash and cheque for majority of their transactions, despite almost all of them having access to the internet, according to a report by Ficci IBA BCG titled 'Digital and Beyond: New Horizons in Indian Banking.

"There is strong business case for engaging them on different channels, in addition to branches, as the current account balances of MSMEs can increase by as much as 10 times if activation of alternative channels is higher," the report said. "Awareness remains a key concern. Fifty per cent of MSMEs do not recall Regional Managers explaining their bank's digital offering to them."

In the retail segment, a mere 23% of the people with internet access do digital banking, the report said. "Getting customers on-board digital platforms needs to be prioritised; banks should be open to incentivising potential customers and seek to bring them on-board at the time of account opening itself," said the report.

"Making payments easier by intelligent authenticity verification for recurring transactions and leveraging technology to develop wealth management solutions for the mass market are some of the solutions offer by the report."