Post-demonetisation, point of sale (PoS) transactions have risen manifold and number of devices installed in the country is likely to grow at a CAGR of 30 per cent to reach 76 lakh in next five years from just about 16 lakh in 2016, an ASSOCHAM study said.
Post-demonetisation, point of sale (PoS) transactions have risen manifold and number of devices installed in the country is likely to grow at a CAGR of 30 per cent to reach 76 lakh in next five years from just about 16 lakh in 2016, an ASSOCHAM study said. The study conducted by the Associated Chambers of Commerce and Industry of India along with its knowledge partner RNCOS Business Consultancy Services was released by ASSOCHAM National Secretary General D S Rawat and its Karnataka Regional Council Chairman R Shivakumar here today.
“Post-demonetisation, the PoS transactions have grown manifold. The fact remains that till that time in India most of the transactions – to the extent of 96 per cent – was carried out in cash, but after November 8 2016 it has come down to 80 per cent,” Rawat told reporters here.
He said people were switching over from cash to less cash economy, despite inadequate infrastructure all across the country.With over 74 crore debit and credit cards in the country, there was a huge potential for growth of PoS machines, so much so that value of transactions through the same can reach Rs 7.5 lakh crore by 2022 from Rs 63,500 crore in 2016, the study said.
With over 74 crore debit and credit cards in the country, there was a huge potential for growth of PoS machines, so much so that value of transactions through the same can reach Rs 7.5 lakh crore by 2022 from Rs 63,500 crore in 2016, the study said.
With increase in PoS based or cashless transactions, Rawat urged the government to take corrective measures in terms of security with the help of regulations and by creating the infrastructure as newer kinds of threats are emerging.
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He also said that to facilitate further growth, the government should reduce the installation charges and monthly rent on PoS, and ensure that transactions were not taxed. The ASSOCHAM-RNCOS study also highlighted that total transaction volume of PoS in India was 30 crore in 2016 and it was likely to grow at a compounded annual growth rate (CAGR) of 48 per cent to reach 310 crore by the end of 2022.
Increased penetration of debit and credit cards, growing e-commerce sector, increasing disposable incomes together with government’s massive thrust on promoting a cashless economy provide a lucrative opportunity for growth of PoS devices, it said adding retail industry, healthcare, hospitality, food and beverage were major contributors to growth.
The study has suggested that companies operating in the PoS domain should expand their reach by encouraging small enterprises (especially in areas with poor ATM penetration) to install such devices for betterment of their businesses.
It said introduction of low priced PoS terminals along with thrust on promoting domestic manufacturing of such machines by supporting micro, small and medium enterprises (MSMEs) to enter this business in order to reduce imports and spur job creation are certain recommendations aimed at boosting the PoS market scenario in the country.
Stating that there was a huge gap between demand and availability of PoS machines, Rawat said “Until the demonetisation was announced, there were about 16 lakh PoS machines across the country, suddenly the demand has grown up…we have recommended that more people should be provided with licenses to install the machine.”
As of now the private banks accounted for 58 per cent share in total number of PoS machines installed across the country, the study said adding this was likely to reverse in the coming years as enterprises are shifting towards public sector banks due to numerous benefits like exemption of import duty and reduction or waiver of merchant discount rate among others.
It said the share of PSBs in PoS devices’ installation in the country was likely to increase by about eight per cent in next five years.
Noting that the private sector banks were charging two per cent on transactions, Rawat said ASSOCHAM has advocated to the government that there should not be any charge, if it wants to promote less cash economy.