Who is protecting us? No one! Vulnerabilities Experienced by Low-Income Indian Merchants Using Digital Payments

Abstract

Low-income merchants in India, who conduct business via makeshift shops and handcarts, are increasingly using digital payment systems for business operations. Although these merchants are a key stakeholder in digital payment ecosystems, they have not yet received much attention from the research community. We present a qualitative study consisting of observations and interviews with 24 low-income merchants and 10 agents that explores the vulnerabilities merchants experience as they adopt and use digital payments. Using the notion of vulnerability as a lens, we show how socio-technical interactions between merchants and agents contribute to at least four different types of vulnerabilities: access-based, identity-based, financial, and informational vulnerabilities. We discuss how agents, customers, and fraudsters take advantage of merchants' vulnerabilities to commit different types of fraud that lead to serious harm for merchants. We show how merchants developed strategies to combat fraud that lead to more work and extra burdens for merchants. Our research suggests a cyclic model of vulnerability that exposes the cumulative effects of vulnerabilities, frauds, and harms experienced by merchants. We end by providing practical recommendations for digital payment companies to break this cycle and better serve low-income merchants.