Demonetisation

Digital payment systems depend on internet connectivity, servers, payment gateways and banking networks. A network failure or a delay in confirmation can leave a transaction pending and affect sales and customer service. The other options are not genuine operational risks created by adopting digital payments. Exam tip: For technology-based payments, identify risks linked to networks, servers and cyber security.

Supplier payment option is important for continuing supply. During cash shortage it is a key risk signal.

Essential products and easy payment help customers continue buying. Convenience becomes competitive advantage during crisis.

Bank deposits create records but also increase service capacity and verification pressure. Balanced analysis is necessary.

During cash shortage customers are sensitive to both price and payment. Stable price builds trust.

The governing concept is institutional change: a major policy event can alter the formal systems through which businesses receive money, maintain records, and interact with financial institutions. Demonetisation reduced the usability of some cash holdings and encouraged greater use of bank accounts, electronic transfers, cards, and other traceable payment channels. Therefore, businesses connecting with banking and digital-payment infrastructure is the correct conclusion. Option B is contrary to the likely formalisation process, because businesses were expected to comply more closely with law and reporting. Option C is incorrect because market information does not disappear merely because cash use changes. Option D is unrelated and unnecessarily absolute; customer service remains necessary.

Payment success and collection time affect cash flow. Therefore these operating indicators are important.

Not giving receipt after payment reduces trust. Receipt is needed for both consumer protection and record.

The correct answer is low-data digital payment options with support in local languages. Rural areas may have limited or slow internet access, and many users may find English-only apps difficult to use. Payment methods that work with low data, simple interfaces, and local-language assistance make digital transactions more accessible and practical. Complex English-only instructions create a barrier rather than encouraging adoption. Exam tip: In questions on digital adoption, focus on practical factors such as connectivity, language, training, and access.

The governing concept is financial transparency and tax compliance. A business normally expects its recorded sales, cash receipts, bank deposits, invoices, and declared income to have a reasonable and explainable relationship. If sales records show one amount but deposits suggest another, the difference may raise questions about unreported sales, unexplained money, accounting errors, or an unclear source of funds. Thus, the risk of scrutiny over an unclear income source is the correct answer. Option B describes a possible operational outcome but not a tax risk. Option C is a customer-growth claim and has no necessary connection with a mismatch. Option D is an extreme and unsupported consequence; a mismatch does not automatically mean that a bank will close.

Turning a problem into a solution is a core element of entrepreneurship. Payment solutions meet a real market need.

The board needs overall information on risk and operations. Cash collections liabilities and compliance are key points.

Inconvenience and waiting can move customers to alternatives. Payment convenience retains customers.

Maintaining records is necessary but protecting customer data is equally important. Compliance and privacy go together.

Changing payment terms based on customer risk is a controlled policy. It balances sales and collection.

During demonetisation, old high-value notes became invalid suddenly. Therefore, a firm receiving most of its sales only in cash faced a greater risk of disrupted sales and cash flow. A firm with several payment methods could accept card or digital payments, so option B indicates lower, not riskier, dependence. Bank reconciliation and issuing receipts are useful business practices, but they do not show excessive dependence on cash sales. Exam tip: dependence on a single payment mode is a business risk.

The governing concept is customer protection and prompt grievance handling during a payment transition. When a customer’s account has been debited but the receipt and order confirmation are missing, there is uncertainty about both the money and the status of the order. The business should verify the transaction, check whether the amount was received, issue a receipt or refund where appropriate, and communicate clearly with the customer. This complaint deserves priority because it involves a direct financial loss risk and can seriously damage trust. Options B, C, and D concern appearance or minor preferences. They may be addressed later, but none threatens the customer’s money, transaction record, or confidence as immediately as option A.

In hard cases write not only fact but also impact and response. This makes the answer analytical.

The governing concept is payment security and risk reduction. A verified digital payment is authorised through a banking or payment network and creates an electronic transaction trail, so the business does not have to judge whether a high-value physical note is genuine. This does not eliminate every possible fraud or technical problem, but it directly reduces the specific risk of accepting counterfeit currency. Therefore, option A is correct. Option B increases risk because large notes are accepted without verification. Option C is improper and cannot be treated as a control measure; concealing invalid notes may create legal and accounting consequences. Option D removes evidence of the transaction and weakens transparency, so it also increases rather than reduces risk.

Digital payment and order records are common in e-commerce. During cash shortage this facility can give advantage.