Snapdeal is now delivering cash to people in India so they can avoid ATM lines

Show me the money.
Show me the money.
Image: Reuters/Mukesh Gupta
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Snapdeal, one of the biggest e-commerce companies in India, is now delivering a new product: cash.

More than a month after Rs500 and Rs1,000 notes were scrapped in a bid to combat corruption and terrorism, the demand for physical money remains high. People are still lining up outside ATMs for hours—sometimes to no avail when the kiosks run out of moneyBanks are also strapped for cash, capping withdrawals at Rs24,000 ($353) in a single visit to the bank and Rs 2,500 ($37) per card.

Snapdeal is offering a way to circumvent the lines by delivering up to Rs2,000 ($29) each day to people’s homes. Although it’s a nominal amount, it can help pay for daily expenses like groceries and settling bills.

“The service is a goodwill gesture by Snapdeal to allow users to easily access cash without having to queue up at their bank or at the ATMs,” the Gurugram-based company said.

Users don’t have to make any other purchase to take advantage of the cash delivery offer, but as more people download the Snapdeal app, the platform could gain users and sales. The service is first launching in Gurugram and Bengaluru. If the feedback is positive, the company will expand to more cities.

The Snapdeal app will alert users with a push notification if cash deliveries are available in their area. To order money through the “Cash@Home” service announced Thursday, customers can either pay with Snapdeal’s mobile wallet app, FreeCharge, or swipe their credit or debit cards on the point-of-sale machines that courier partners will bring with them when delivering the cash. A Re1 (under 2 cents) fee applies to each order and it takes a day to process the request.

To fund the offer, Snapdeal will use money collected from customers who pay for items in cash at the time of delivery. However, it’s possible that demonetization will lead fewer people to pay for deliveries with cash, and the company could face a shortage of funds available for the offer.

Earlier this month, Gurugram-based grocery delivery startup Grofers had started offering the same cash delivery service.

Vodafone similarly tried to help customers deal with the cash crunch, letting users with M-Pesa—Vodaphone’s mobile wallet—convert their digital balances to physical money at touch points across India. In early December, India’s largest ride-sharing service, Ola, partnered with Yes Bank to bring micro-ATMs to 30 locations across 10 cities, where customers of any bank could withdraw paper money. The withdrawal limit for both services was also Rs 2,000 ($29) per user per day.

Other companies are focused on gaining customers by helping them go cashless. Noida-based Paytm slashed transaction fees to zero until the end of the year, and introduced a toll-free number for those with feature phones or spotty networks to make digital payments. E-payments app Mobikwik’s ’Lite’ version, designed to work with 2G connections, logged 2 million downloads in 48 hours.