India's Little Shops Are a Big Bank Network in the Making

Most Indians still rely on cash. Can the corner store bridge the gap to digital money?

- Anto Antony and Marcus Wright

It may look like an ordinary watch and mobile phone shop, but for many people in its south Mumbai neighbourhood, it’s basically the local bank branch. The proprietor, Rakesh Sharma, is one of hundreds of thousands of shopkeepers making money transfers, deposits, and withdrawals on behalf of customers at all hours of the day and late into the night.

Corner shops, tailors, pharmacies, and even doctors’ offices are adding these simple financial services as a sideline. Sharma, sitting behind his computer in the Mayuresh Watches & Traders shop founded by his father, says these services are his “mainstay income” now. He takes in so much cash—a couple of million rupees every day, the equivalent of roughly $30,000—that he or his brother must make a run to an actual bank branch almost every other hour to lessen the risk of being robbed.

India has been trying to get people to use digital payments and banks instead of cash. Hundreds of millions of people have been signed up for bank accounts for the first time, and the government has asked state-owned lenders to open branches in or near every village. A surprise move in 2016 to invalidate some existing bank notes, forcing people to line up to exchange or deposit them, was seen as a boost for smartphone-based digital- wallet services such as Paytm. But those companies tend to target relatively affluent Indians. Another group of online financial-services providers is reaching the rest—the vast majority of the population that’s largely sticking with cash but still needs ways to make small savings deposits, pay bills, send money to family in faraway states, or pick up cash sent by relatives working abroad.