With cash in short supply following the withdrawal of high-value currency notes on November 8, card transactions are seeing a steady increase, reports Shritama Bose in Mumbai.
Transactions via credit and debit cards at point-of-sale (PoS) terminals rose to Rs 40,160. 43 crore in December from Rs 35,240 crore in November — for four banks — data from the Reserve Bank of India (RBI) shows. The value of transactions in October — for all banks — was Rs 51,121 crore.
FE reported on Thursday that State Bank of India (SBI) plans to install 2.5 lakh PoS terminals by March; the lender already has rolled out 3.85 lakh machines.
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SBI proposes to do away with transaction charges for small merchants. Chairman Arundhati Bhattacharya told a newspaper the bank was looking to remove MDR or merchant discount rate for merchants with a turnover of Rs 20 lakh and below. In a bid to push debit card transactions, the RBI on December 16 capped the MDR on transactions of up to Rs 1,000 at 0.25% and for those between Rs 1,000 and Rs 2,000 at 0.5%. Federal Bank has launched a facility for merchants to receive payments using PoS machines enabled by the Unified Payments Interface.
There are an estimated 15 lakh PoS machines in the country today. Analysts expect digital transactions to rise sharply as a result of the government’s decision to withdraw high-value banknotes, amounting to 86% of the currency in circulation.