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

The Economic Times - - Finance & Commodities - Pratik.Bhakta@ times­group.com

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.

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