Alternate payment systems and currencies are shaping up as consumers face the denomination heat.
Here is a story from Chennai:
Cashing in on this, Hotel Saravana Bhavan, a chain of hotels head-quartered in Chennai, having 36 branches across the state, has opted to accept Rs.500 and Rs.1,000 notes from its customer. The hotel’s creative in-charge K. Kamalakannan, said: “We are accepting the notes. We will exchange them when the banks open doors,’’ he said. There is an hitch, however. Tendering change has proved a big challenge for the hotel.
Couple of its customers hit upon an interesting solution for this predicament. Though they are unknown to each other, they chose to share their bills. One of them paid the combined bill, and the other promised him to do an online recharge of his portion!
C. Sivasankaran-promoted nascent taxi hailing company UTOO Customer said it would accept Rs.500 notes but won’t tender change. Instead, it said it would give a credit note, which a customer could use for another trip! “To ease your travel, we will accept account payee cheques as mode of payments,’’ it said. Even an IOU (I owe you) letter will do, said Mr. Sivasankaran. Tata to an old order, hail the new change!
Then there are transaction arbitrages. There are two kinds of arbitrages going on. First is happening in the Financial markets where people are speculating on impact on bonds, currency, money supply and so on.
Second is the trasnaction arbitrage happening in streets and corners. Here pawn shops/people are trying to take advantage of the situation by offering ease of transactions. An example from Mumbai:
Mumbai saw jugaad kick in at supersonic speed amidst a brave new economic reality in which the two highest-denomination notes are no more legal. While black-money hoarders scurried to offload their cache via sales of cash, distress bullion buying and questionable currency swaps, those enabling the deals flexed the book to make the deals look legit.
The most blatant barter was on at Zaveri Bazaar, where Mirror’s camera caught a currency trader charging 60 per cent to swap the demonetised notes. We have a recording of the conversation in which he is heard saying he can give 100-rupee notes for 500- and 1000-rupee notes after keeping a chunk of the value. “I can give you Rs 400 for a 1,000-note and Rs 200 for a 500-note,” he boasted to us. On normal days, he exchanges tattered notes for new ones.
Then there is this story on Angadias who are basically money carriers from Surat to Bombay.
Fascinating to read all this…Huge economic experiment asking so many questions..