In spite of all the push for digital payment, cash doesn’t seem to lose its any prominence in the payment system.
Superfly Insights, a San Francisco-based data analytics company, shared its findings on app-based cab hailing companies and stated that Uber gets almost 65 per cent of all payments in cash, while only 30 per cent rides are paid through the mobile wallet Paytm. The report was first published in the Times of India.
The finding is in complete contrast to the US and other developed markets, according to Superfly Insights report.
India was the first country where Uber opened cash payments in a phased manner in 2015.
Jonathan Meiri, CEO of Superfly Insights, said, “In two of Uber’s largest ridesharing battlefields -Brazil and India, with massive market opportunity -cash is (still) king.” In Brazil, over 25 per cent rides are paid for in cash.
The rival company Ola has been able to secure more digital payments. However, the cash percentage in Ola is still higher than the digital payment.
According to Superfly Insights data, 51 per cent of Ola riders paid through cash, while its own digital wallet Ola Money was used by 45 per cent of the users. The non-cash payments also include options such as debit and credit cards.
The data also highlights another interesting fact that emerged post demonetization. In January this year, Ola Money had a share of 54 per cent while cash payments had a share of 45 per cent.
While debit and credit cards are still small as a mode of payment, Ola is witnessing growth in this segment. The home-grown company saw credit card payments go over 3 per cent compared to less than a percentage point at the beginning of the year.
Experts believe that cash transactions go against the objective of cab-hailing apps to provide a seamless experience where a customer can simply walk away after a ride with the fare being automatically debited.
However, the trend is not new but similar to the experience of ecommerce in India where a large number of consumers continue to opt for cash-on-delivery despite possessing debit cards. This behavior shows that the customers want to retain control.
In India, Uber is also in final stages to join the latest digital payments platform Unified Payments Interface (UPI). Ola already integrated UPI in April this year.