Bengaluru, April 6 (IANS) Business chamber Assocham on Thursday sought Rs 100 cap on monthly rental of Point of Sales (PoS) machines to encourage more merchants to install them.
"Rental on PoS machines should be capped at Rs 100 per month as against Rs 800 levied by the banks, which also charge between Rs 10,000-Rs 15,000 for installing each machine. Merchants are reluctant to install the machines due to their prohibitive cost," Associated Chambers of Commerce and Industry of India (Assocham) Secretary-General D.S. Rawat said.
Assocham also wants private banks to stop levying 2% transaction fee as service charge on debit-card holders for payments using PoS machines. "It will be difficult for debit-card holders to use PoS machines for payments if banks also collect 2% of the transactional value as service charge," said Rawat after releasing a joint study report on 'Indian Point of Sale Market' by Assocham and research firm RNCOS.
The study has projected the number of PoS machines to jump nearly five-fold to 76 lakh by 2022 from 16 lakh in 2016, at a 30 percent compounded annual growth rate, and held a huge potential growth for PoS machines as the country has a whopping 740 million debit and credit cards. "The transaction value through PoS machines will touch Rs 7.5 lakh crore by 2022 from Rs 63,500 crore in 2016,.
"The transaction volume of PoS is likely to grow 10-fold to Rs 310 crore by 2022 from Rs 30 crore in 2016, projecting 48% CAGR," said Rawat citing the report.
Increased penetration of debit and credit cards, growing e-commerce and increasing disposable incomes provide an opportunity for the growth of PoS machines, thanks to the government's thrust on promoting cashless economy.
Besides the retail industry, sectors like healthcare, hospitality, food and beverage are major contributors to growing revenue of PoS market. The study, however, noted that issues pertaining to privacy, security, trust and lack of full integration of telecom infrastructure need to be sorted out.
"Though private banks accounted for 58% of PoS machines by 2016, the trend is likely to reverse, as enterprises are shifting towards state-run banks due to benefits like import duty exemption and reduction or waiving off merchant discount rate (MDR) by the government and the Reserve Bank of India, ease of operation, lower installation and monthly charges," added the report.