Demonetisation: Sharp surge in demand for card-swipe machines

From 5000 requests a month to 5000 in a day, says HDFC Bank official.

Written by Sandeep Singh | New Delhi | Updated: November 18, 2016 11:47 am
Demand for POS from urban, semi-urban areas Demand for POS from urban, semi-urban areas.

AS the government cranks up to meet the cash crunch, several small businesses across urban and semi-urban areas are busy requesting their banks to set up card-swipe machines or point-of-sale machines (POS) so that they do not lose business to their more tech-savvy rivals.

The machines facilitate acceptance of payment from customers by swiping of their debit/credit/pre-paid cards on the POS terminals.

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An HDFC Bank official said there’s been a sharp rise in demand for POS. “While we used to receive 5,000 such requests in a month, over the last few days, this has gone up to 5,000 requests in a day,” said the official.

An Axis Bank official said the bank has recorded a three-time jump in demand for POS machines over the last few days.

While ICICI Bank did not specify the quantum of increase, its spokesperson said: “Over the past few days, we have witnessed a sharp increase in demand for our payment solutions at merchant outlets and for deployment of POS machines — significantly higher than its weekly average.” The spokesperson added that the bank has appointed additional manpower to handle this demand and to be able to deploy its solutions.

All these three banks said the requests are coming from new categories of merchants such as beauty salons, small kirana stores, even vegetable vendors.

This surge in demand builds on a trend. The number of POS machines has doubled from 7.41 lakh in September 2012 to 14.96 lakh in September 2016. Bankers say there has been a steady rise in installation of POS machines not only in big cities but even in Tier II cities across the country.

While the number of POS machines grew at 11.6 per cent between August 2013 and August 2014 from 9.81 lakh to 10.95 lakh, it grew by 8.8 per cent in the next 12 months to 11.9 lakh in August 2015. Reserve Bank of India data shows that between August 2015 and August 2016 the rise has been steep at 25.6 per cent.

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The RBI has capped merchant discount rate (charged to a merchant by banks for offering debit and credit card services) on debit card payment at 0.75 per cent of the transaction amount for value up to Rs 2,000 and one per cent for transaction amount for value above Rs 2,000. However, for RuPay cards issued by the National Payments Corporation of India, the MDR was set at 0.45 per cent for transactions up to Rs 2,000 and 0.65 per cent for transactions above Rs 2,000. In March this year, RBI proposed rationalisation of MDR on debit cards to encourage wider deployment of card acceptance infrastructure.

Bankers say that the surge in demand for POS machines is good news for the economy. Some say once an individual starts transacting through a card, it usually becomes a habit. Said a banker: “Earlier, a lot of merchants discouraged customers from using their cards. Now that they are installing them, it will significantly raise the quantum of e-transactions.” Card transactions also improve cash management and enable speedy payment.

POS machines are provided by banks through their branches. Any existing customer or non-customer may avail of the benefit. He or she needs to open a current account with the bank and must have a valid business establishment running for at least six months.

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First Published on: November 18, 2016 4:12 am
  1. R
    Romik
    Nov 18, 2016 at 12:28 am
    card users should get high rewards ! ( Points)
    Reply
    1. B
      Baskar
      Nov 18, 2016 at 4:57 am
      One could not have imagined these events to happen in such a short timeframe. Thanks to demonetisation which has motivated.
      Reply
      1. G
        George
        Nov 18, 2016 at 5:26 am
        Black Money spread across currency, gold , land and building , other liquid financial instruments how will handle the other three major areas other than currency.
        Reply
        1. B
          Binu Mathew Varghese
          Nov 18, 2016 at 1:13 am
          If POS machine and bank charges are reduced further more and more will step into the hle less payment method.
          Reply
          1. D
            dd
            Nov 18, 2016 at 9:44 pm
            Hold on your breath...You will see surprise
            Reply
            1. D
              dd
              Nov 18, 2016 at 3:41 am
              Nice. It will give jobs to many people..we need revolution...only Modi can
              Reply
              1. V
                Vijay
                Nov 18, 2016 at 1:31 am
                for end customers who are using debit cards, there should be 0 charges using POS machine for any transaction.lt;br/gt;lt;br/gt;For credit card users Govt. can charge at least 1% per transaction
                Reply
                1. K
                  K Chatterjee
                  Nov 18, 2016 at 3:19 am
                  A cashless economy can not only weed out black money, but also eliminate most crimes like dacoity, burglary, snatching, ransom, pocket-picking etc. Swiping machines may be made compulsory for all business with monthly turn-over of ₹2 lakhs and all payments above ₹400.
                  Reply
                  1. S
                    Sankaran Krishnan
                    Nov 18, 2016 at 3:34 am
                    Welcome news if more small time traders and merchants opt for the swipe machines and if available people are also forced not to go for shopping with currencies with them and instead go with plastic cards that are with them and also spend judiciously and the pick-pocketing will get reduced once we opt for cashless transactions across the various outlets.
                    Reply
                    1. T
                      T.PRASANNA KUMAR.
                      Nov 20, 2016 at 11:03 am
                      In the wake of present situation how far it can be trusted to swipe cards in any merchant outlet as the government is fully encouraging, when the card data can be read easily and cloning the card is very much in handy as is evident in the past ? Even the recent detection of various card data theft has come in to light, widely condemned by the government and it's scrutiny of investigations are already initiated. Only the people are becoming scapegoats for every government move.
                      Reply
                      1. M
                        Manas Sarkar
                        Nov 18, 2016 at 12:47 am
                        Good..we and govt want this change..
                        Reply
                        1. V
                          Vihari Naidu
                          Nov 18, 2016 at 2:48 am
                          There is a scam going on. This Chinese owned PayTm and the swiping machine companies are benefiting.
                          Reply
                          1. P
                            prafull panse
                            Nov 18, 2016 at 5:27 am
                            the w concept of cashless economy is to enable banks to be involved in all transactions. to make it a welcome gesture, we need to make the system customer friendly i:e no language barriers [need to learn english], machines with vocal output [for illiterate or blind persons] and above all banking charges [both to the cardholder and receiver] and need to have a current account
                            Reply
                            1. D
                              Deepa
                              Nov 18, 2016 at 5:08 am
                              Great, this is what we wanted to hear. Transparency in business through digital cash
                              Reply
                              1. S
                                savi
                                Nov 30, 2016 at 11:14 am
                                The Indian Express has found credible data and has brought this point in front of readers. But card processing machine is not a complete pos. What good is a point of that doesn't keep a record of transactions, and now pos have started accepting mobile wallets. Target should be to match international standards and go cloud based: . Since India is ahead in IT and software engineers, i don't understand why we lag in using such high quality point of systems when they are much cheaper in India now.
                                Reply
                                1. S
                                  savi
                                  Nov 30, 2016 at 11:13 am
                                  The Indian Express has found credible data and has brought this point in front of readers. But card processing machine is not a complete pos. What good is a point of that doesn't keep a record of transactions, and now pos have started accepting mobile wallets. Target should be to match international standards and go cloud based: a good pos to buy. Since India is ahead in IT and software engineers, i don't understand why we lag in using such high quality point of systems when they are much cheaper in India now.
                                  Reply
                                  1. B
                                    B
                                    Nov 18, 2016 at 3:23 am
                                    These charges are not to the customer. It is charged by the banks to the traders or users who install them. They're just payment gateways.
                                    Reply
                                    1. S
                                      siriyaar
                                      Nov 17, 2016 at 11:59 pm
                                      2022 modi may ban cash itself. So all card operation no black money ensured
                                      Reply
                                      1. R
                                        Raja Umesh L
                                        Nov 18, 2016 at 11:42 am
                                        supreme court must take this into account : JAI HINDIlt;br/gt;SIDE EFFECTS OF MODI SURGICAL STRIKES ON BLACK MARKETING.lt;br/gt;WE PEOPLE SUPPORT MODI JI. SUPREME COURT MUST NOT CREATE TROUBLE TO COUNTRY THEY ARE SUPPOSED TO HELP INDIANS INSTEAD OF THAT THEY ARE ENTERTAINING OPPOSITION PARTIES
                                        Reply
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