Why did cash take away the sleep of Apple and Mercedes in Digital India? You will be shocked to know the reason - Newztezz - Latest News Today, Breaking News, Top News Headlines, Latest Sports News


Saturday, May 25, 2024

Why did cash take away the sleep of Apple and Mercedes in Digital India? You will be shocked to know the reason

After the arrival of UPI in India, making digital payments has become quite easy. Despite this, cash has given sleepless nights to two luxury brands of the world, Apple and Mercedes, after their arrival in India. What is the reason behind this...?

When demonetization happened in the country in 2016, UPI payment started becoming popular at the same time. If we look at the latest data of National Payment Corporation of India, then in April 2024, transactions worth Rs 19.64 lakh crore were done through UPI in the country. Whereas in March 2017, it was just Rs 2,425 crore. Still, cash has taken away the sleep of luxury brands like Apple and Mercedes doing business inside the country.

In fact, when Apple opened its stores in Delhi and Mumbai, it did not make arrangements for cash payment. But soon it realized that this would not work. To do business in India, it then installed cash counting machines and cash billing machines at both Delhi and Mumbai outlets. But why was this needed?

Apple makes up to 9% of its sales in cash

iPhone maker Apple makes about 7 to 9 percent of its total sales from its two flagship stores in India in cash. According to ET's report, in countries like the US and Europe, the share of cash in its sales from its stores is just 1%.

Even more interesting is that if you look at the questions asked on Quora, a large number of Indians have asked whether they can pay in cash at Apple stores or not. A similar situation is seen in the sale of cars as well. In Delhi, people do more cash deals at Apple stores than in Mumbai.

Mercedes also has to manage cash

The government has banned single cash payment of more than Rs 2 lakh in the country since 2017. So that digital payment can be promoted in the country. Despite this, cash in circulation in the country has increased to Rs 35.15 lakh crore by March 2024, which is more than double the Rs 13.35 lakh crore of March 2017. Despite such a ban, cash is being used extensively in the purchase of cars.

If we believe the data of Federation of Automobile Dealers Associations (FADA), an organization of car dealers, then 15 to 20 percent of car sales in the country are self-funded. That means people do not take loans to buy cars. Whereas in the sale of luxury cars, one-fifth of the sale is through cash payment.

According to FADA, people can make cash payment of up to Rs 2 lakh for self-funded cars. The rest of the payment can be made through cheque, demand draft or electronic transfer. But Mercedes' data tells a different story in this regard.

Mercedes-Benz says that the percentage of self-funded car purchases is higher in markets like Mumbai and Bengaluru. Here, about 25 percent of car purchases are self-funded, while in other markets of the country this figure goes up to 15%. Out of all these customers, about 20 percent prefer to pay in cash.

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