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Today, be it tea worth Rs 10, vegetables worth Rs 50 or everyday items from the local grocery shop – digital payments have made even the smallest purchases very easy. Payment is made in a few seconds by scanning the QR code installed outside the shop.

UPI Payment: The expansion of digital payments in India is no longer limited to just big cities, shopping malls and online businesses. QR codes installed at tea shops, grocery stores, vegetable vendors and small traders have made digital payments a part of the everyday life of common people. Data from a government study also shows that small shopkeepers have rapidly adopted UPI and have played an important role in the expansion of digital payments in the country.

94 percent small shopkeepers adopted UPI

According to a study released by the Department of Financial Services of the Finance Ministry, 94 percent of the small businessmen surveyed had adopted UPI. This figure shows that the reach of digital payments is no longer limited to organized or large businesses. A total of 10,378 people from 15 states were included in the government study. These included 6,167 customers or users, 2,199 merchants and 2,012 payment service providers. The objective of this study was to assess the impact of the government incentive scheme to promote the use of low-value BHIM-UPI person-to-merchant i.e. P2M transactions and RuPay debit cards.

According to the report, the acceptance of UPI among small businessmen appeared quite widespread. This means that digital payments are no longer just a convenience for metros. Even in small towns and local markets, shopkeepers are accepting payments through QR codes.

What is the benefit to small businessmen from digital payment?

The biggest advantage for small shopkeepers adopting UPI is the fast and easy payment process. The purchase can be completed even if the customer does not have cash. Apart from this, the problem of keeping loose money and change also reduces to a great extent. 72 percent of the merchants included in the government study appeared satisfied with digital payments. These businessmen cited fast transactions, ease of maintaining payment records and convenience in conducting business as its main advantages.

Another important advantage of digital payments is that an electronic record of the transaction is created. This can help shopkeepers keep track of money coming into their business and payments.

57 percent shopkeepers said that sales will increase

The report also revealed that 57 percent of small businessmen said there was an increase in sales after starting digital payments. However, the study has made it clear that it would not be appropriate to give full credit for the increase in sales to UPI alone. Sales are also influenced by customer numbers, local demand, market conditions, type of business and other economic factors. Nevertheless, digital payments have made the process of taking money from customers easier for businesses.

UPI has proved to be very useful especially in purchasing low cost goods. From tea worth Rs 10 to small purchases of groceries and vegetables, payments can be made through QR codes in just a few seconds.

Government incentive scheme also increased digital payment

Government incentive schemes have also played a role in promoting digital payments among small businesses in India. The government had launched a scheme to encourage digital payments in the financial year 2021-22, which was continued till the financial year 2024-25. According to government reports, such incentives helped reduce the cost challenges for merchants and banks to digital payments. This also helped in connecting new merchants to the digital payment network and increasing confidence among merchants regarding digital transactions.