Banks see surge in card usage; demand jumps for PoS terminals

As consumers continue to queue outside banks and automated teller machines (ATMs) to withdraw cash, plastic money has come to their rescue. With no or limited cash in the wallet, consumers have been swiping their debit and credit cards even for small-value transactions.

Rajiv Anand, retail banking head at Axis Bank, says: “We have seen that the usage of debit cards has doubled and so has the increase in usage of point-of-sales (PoS) terminals.”

ICICI Bank has also seen the usage of its debit card doubling. Bankers also say they have seen a significant increase in several first-time consumers, who had earlier never used their debit cards at PoS machines.

 

An HDFC Bank official said in terms of volume of transactions, the usage of debit cards had risen fourfold and in value by three times. “Earlier, we would get 3,000-4,000 requests for PoS terminals a month. Now, we get an equivalent number every day,” said the official.

Bankers explain they are seeing a lot of demand for PoS terminals, not only from merchants but from the smaller self-employed segment - doctors, chartered accountants, vegetable vendors, beauty salons, etc.

“We have seen a sharp increase in request for PoS terminals but are constrained by the number of sales staff who can deploy it. Despite that, we have seen an increase in deployment of PoS terminals by three times,” added Anand.

Both the government and the Reserve Bank of India (RBI) had been trying to push the usage of PoS machines, as the number - compared to the cards in circulation - was very low. RBI data for August said there were 1.46 million PoS machines, compared to 712.46  million debit cards in circulation.\

READ OUR FULL COVERAGE ON THE MODI GOVT'S DEMONETISATION MOVE