On November 8, 2016, Government of India declared demonetization of all Rs. 500/- and Rs.1000/- currency notes towards a cashless society and create a digital India. The point of sale (PoS) and prepaid instruments are the most popular systems currently installed by merchants and service providers for receiving payments from customers. The primary focus of the study is to understand the adaptability, affordability, acceptability, and sustainability of the payments system as seen from the point of view of small merchants. A total of 221 responses were collected in Chennai. Results show that cash remains the most preferred mode for business. It is required for the working capital, payment of employee remuneration, wages, and others. With regards to the use of payment systems such as POS and prepaid instruments, awareness needs to be created of the benefits in having non-cash transactions. Improving credit worthiness and eligibility to receive loans from banks is one such benefit which would convince the merchants. However, too many systems could confuse the merchants and customers.