It's no surprise that in cash economies people are often skeptical of counterfeit bills. As transactions grow in size, the recipient is forced to bear the risk of potentially not having been paid. So, I understand why vendors are hesitant to accept large US currency when bills aren't in pristine condition.
With growing internet penetration and the ability to accept credit cards on mobile phones in emerging markets, I was initially surprised that people still preferred cash. But, after seeing the nature of their transactions, it started to make sense.
Technology isn't always reliable, so in their minds they perceive a risk of never being paid because of a lack of trust in hardware and software. Without confidence in basic infrastructure, people understandably try to simplify transactions as much as possible. Still, they're able to make it work albeit differently.