Modi’s digital India has a roadblock; not enough cards, machines for digital payments

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Updated: August 20, 2019 6:17:26 PM

In the last five years, transactions made at the POS terminals shot up by four times from Rs 3 lakh crore in FY15 to Rs 12 lakh crore in FY19, but the facility for usage is still hindering the ease of use.

credit card, POS, credit card payment, digital payment, digital india, debit card, card transactionIndia has 39.91 lakh POS terminals, as of June 2019, to serve a population of over 125 crore.

India has the least number of point of sale (POS) terminals among advanced economies and other emerging market economies. India has a mere 0.003 POS terminal for every inhabitant, which is even less than that in Brazil, Indonesia and Turkey, shows the latest data by RBI. India has 39.91 lakh POS terminals, as of June 2019, to serve a population of over 125 crore. In the last five years, transactions made at the POS terminals shot up by four times from Rs 3 lakh crore in FY15 to Rs 12 lakh crore in FY19, but the facility for usage is still hindering the ease of use.

POS terminals in India are operated by 44 different banks. Ratnakar Bank Limited has the highest number of POS terminals. HDFC Bank, ICICI Bank, State Bank of India and Axis Bank are among the other banks with the maximum number of POS terminals. One-third of banks registered in India do not have a single POS terminal.

Apart from the POS terminals, the number of credit or debit cards per inhabitant in India is also at the lowest among different advanced and emerging economies. The country has only 0.7 card for every individual. The number of credit and debit cards has seen a sharp dip since the beginning of the current financial year. The total number of outstanding cards at the end of FY19 was 97 crore, which was reduced to 88 crore by the end of the first quarter. Where almost half of the banks registered in the country do not issue credit cards, more than a quarter of India’s credit card market is controlled by HDFC Bank.

The NDA led government demonetised high-value currency in Nov 2016, which was also aimed to boost digital transactions in the country. However, the central bank’s latest report suggests that on an average an Indian citizen makes only 18.3 transactions of value USD 3,910, which is far below the average of other advanced and emerging economies. Meanwhile, the currency in circulation in India is 11.2 per cent of the GDP, which is the highest after Japan among the advanced and emerging economies. The figure still crowns the cash as the king in India.

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