Adding 10L PoS Units may be Mission Impossible
Vendors unable to meet target as there are operational challenges to installation of terminals at such a scale
Mumbai: Finance Minister Arun Jaitley’s goal of getting an additional 10 lakh point of sales (PoS) machines installed in the country by March to facilitate non-cash transactions may come a cropper because vendors and banks are not in a position to meet the target.
“If we have to attain the target, we have to deploy somewhere around 30,000 terminals per week. We used to do 6,000 terminals in a month, which we have increased to almost 10,000 per week – scaling it up to 30,000 is not possible at this juncture,” said a senior official with one of the large banks.
While banks are targeting their current account holders to install these machines, they say issues such as the shortage of hardware, lack of manpower to deploy the devices and the limited number of merchants who can show healthy transaction levels on their terminals are hindering the initiative. “Onboarding is also a major issue where customer awareness about card swiping, consumer education, training of the merchant take time and they are a huge challenge for terminal deploying companies like us,” said Deepak Chandnani, chief executive for South Asia at Worldline. Bankers said that even though there’s been a huge uptick in installation of PoS terminals after the government invalidated high-denomination currency notes in November, adding 10 lakh machines by the end of March appe- ars almost impossible. Additionally, the target of deploying 20 lakh Aadhaar-enabled terminals by September is also steep. The country had more than 15 lakh PoS terminals as of October 2016, according to data with the Reserve Bank of India. The government’s target means an increase of 67%. Bankers said there are huge operational challenges to both manufacturing and installation of terminals at such a scale.
“Since there were no tax breaks announced for merchants who would do digital transactions during the budget, merchants are not finding sufficient incentives to switch to digital, which is furthering hindering terminalisation,” said Manish Patel, founder of mSwipe, which installs PoS terminals at outlets.