Paper or Plastic?

The pace of change in India has been dizzying in the last few years. Every time I visit India, the change is palpable - in terms of new highways, faster trains, malls, metros, etc. There is definitely an optimistic forward-looking vibe all around, at least in the places I visited. I found the highways to be very good but the frequent speed breakers kept shaking up my joints. Whether they keep speeds in check or not, they are definitely bound to break other things and provide auto mechanics and orthopedicians with a steady stream of clients! The rest stops along the way are clean and well maintained. Even on the smaller highways I noticed little coffee shops and clean public toilets. But as soon as you reach the city limits, you will meet the inevitable congestion making you wish you had taken the train.

One area where the change has been the most dramatic is the explosive growth in the adoption of digital payments. Thirty years back, when I was working in in India, I had to accompany an executive visiting from abroad when he wanted to purchase a hand-woven rug from one of the arts and crafts emporia in Bangalore. We ended up in one of the showrooms on MG Road where he was able to find what he liked in a few minutes. He then wanted to pay for it using his American Express card. That's when things kind of ground to a halt. 

It turned out that American Express at that time required merchants to call them on the phone to get the transaction approved. This should have been routine except on that day the phone lines were busy or down and the store just could not reach Amex office in New Delhi (yes, they had to call that office). For the next forty minutes or so they kept trying to get through while also trying the patience of the American visitor. They even tried to use the telex (look it up if you don't know or have forgotten what that is) to contact Amex. It was a frustrating experience to say the least.

Fast forward to today. On my visit to India recently, I was trying to get some breakfast at the famous little corner canteen, Veena Stores in Bangalore and here I was the one holding up proceedings, wanting

to pay with cash. Well, actually not holding up because the rest of the shoppers were using one of many different phone apps to place their orders at the two self-service kiosks. By the time I paid for my order with cash, at least ten others had completed their transactions pushing me to the back of the order queue. When I saw another person fumbling with cash, I immediately guessed that he too was visiting from abroad and I was right. By the way, this is a fast food store by Indian standards which is to say, it will leave the so called fast food outlets in the US in the dust when you look at the sheer volume of transactions and the speed with which orders are fulfilled.

When I first came to the US, I was often asked 'Paper or plastic?' meaning 'Cash or credit card?' when paying for things. Over the years as the use of cash decreased steadily, this question changed in meaning with plastic bags taking over the old paper grocery bags. Yes, plastic bags did replace paper causing the explosion of single use plastic bags in landfills. We have come a full circle now with reusable bags instead of paper and plastic. And we can swipe, insert, or tap credit cards or flash the smartphone for payment at the checkout. QR codes are not ubiquitous as they are in India.

India seems to have leapfrogged the the paper/plastic stage and gone directly digital. The need for point-of-sale machines has been made redundant with payments being made using the phone everywhere. Even street vendors display QR codes and accept digital payments. Visitors are not able to join this revolution since it requires both an Indian bank account and an Aadhar card. Fortunately you can still use plastic, at least for now. And cash of course but cash is no longer king, it seems.

I wonder what that executive would say today if he saw folks buying things from the smallest street vendors and paying for them digitally. Back then, based on his experience with the credit card purchase, he expressed the opinion that we would not be able to bring advanced software solutions to the Indian market, something I was pitching hard for. I was an impatient young man then! Now impatient young and old people are waiting for me to complete my cash transaction.