Sales of Apple products, cars in India see surge in cash transactions

Around 7-9% of Apple's sales in its two company-owned stores were cash transactions, compared to less than 1 per cent or even none at all observed in its stores in the US or Europe

Apple's two company-owned stores in India, which it opened in April last year, saw a large number of customers preferring to pay in cash. This led the tech giant to install currency note counting machines in both its Mumbai and Delhi outlets.

As customers paid cash to purchase mobile phones or computers, around 7-9 per cent of Apple's sales in these Indian stores were cash transactions, compared to less than 1 per cent, or even none at all, observed in its stores in the US or Europe, according to a report in the Economic Times (ET).

The two stores in India report directly to the Apple retail team in the US instead of Apple India sales operations. As a result, their sales are also recorded in the global books.

 

Cash circulation doubles in India

Despite the government's imposition of a cash transaction limit of Rs 2,00,000 per person per transaction, per day, or event since 2017 to encourage digital payments and curb the circulation of black money, the amount of cash in circulation in the country more than doubled to Rs 35.15 trillion in March this year, from Rs 13.35 trillion in March 2017, the report stated.

This increase occurred despite a surge in digital payments through the Unified Payments Interface (UPI), reaching Rs 19.64 trillion by the end of April this year from Rs 2,425 crore in March 2017, according to the latest data from the National Payments Corporation of India.

Cash payments in car sales

The Federation of Automobile Dealers Associations (FADA) predicts that 15-20 per cent of cars sold in India are self-financed. Even for luxury vehicles, one-fifth of sales occur via direct cash payments, with buyers typically providing Rs 2,00,000 upfront. Customers have the option to settle the remaining amount through an account payee cheque, bank draft, or electronic clearing system facilitated by a bank account, net banking, debit cards, or any other electronic method, the report stated.

For German luxury carmaker Mercedes-Benz India, cash and self-funded purchases in Mumbai and Bengaluru account for a larger portion, comprising 25 per cent compared to the 15 per cent seen in other markets across the country.

The report quoted Santosh Iyer, managing director (MD) of Mercedes Benz India, as saying, "Nearly 20 per cent of our customers choose to make their purchase entirely in cash."

Manish Raj Singhania, president at Federation of Automobile Dealers Associations of India (FADA), said there are many customers who prefer to pay through their savings rather than taking financing options.

The report Singhania as saying, "There are others who do not have the necessary documents like income tax returns to avail of a bank loan or have not been deemed credit-worthy. And these buyers are there, not only in rural but also in urban markets. In all these cases, customers make payment with cash for up to Rs 2,00,000 (as per government regulations), cheques and RTGS (real-time gross settlement funds transfer between bank accounts)."