Point of Sale Infrastructure in India

The formation of a 5-member high-level committee by the Reserve Bank of India with Nandan Nilekani (former Chief of UIDAI–Unique Identification Authority of India) as its Chairman for materialising advancements in the FinTech domain has received major attention. Since the core of attention of this committee is to augment the digital payments’ provision in rural as well as urban areas, the initial deployment of the required point-of-sale (PoS) infrastructure in India is vital. The promise of FinTech development in India will only be fulfilled if the allied infrastructure in the ecosystem develops simultaneously.

Experts opine that it’s crucial to also promote domestic manufacturing of PoS (devices) infrastructure; for this to materialise it’s also necessary to create necessary enabling incentives for the domestic manufacturers. These manufacturers can also become the necessary support mechanisms for realising the objectives of the Digital India campaign.

Some of the advantages of locally manufactured PoS infrastructure are: the affordable price of the locally manufactured machine as against the ones built by international companies. This also has the potential to considerably minimise the operating cost of businesses using the locally built PoS mechanism. Also, efficient and affordable penetration of this PoS machine system in rural sectors (unorganised retail merchants / rural markets / small businesses) will also be possible. Sourcing, supply, and installation of these PoS machines will also become swift and easy upon domestic manufacturing.

The PoS systems available today are embracing the advent of mobile devices and the cloud. While PoS systems in India initially commenced with having software and hardware components, they now also perform various new functions. The PoS systems have resulted in developing synergies by assimilating with backend applications, viz. customer relationship management (CRM) and inventory management. The cloud services now offer small to medium size businesses (SMBs) a possibility of using advanced PoS systems and circumvent deploying and maintaining a backend server at various places (reducing costs).

While majority of PoS systems operate on tablets (offering mobility)–Apple iPad or a Microsoft Surface Pro; many PoS devices also offer dedicated hardware systems and card swipers, receipt printers, cash drawers, and barcode scanners. Also, the Square Point of Sale (SPoS) systems use small dongles capable of connecting to a tablet and allowing swiping credit cards with mobility.

As mentioned on the IBEF portal, the achievements of the government in the year 2017-2018 in regards to PoS terminals are: In order to enhance infrastructure in villages, a total of 2,04,000 PoS terminals are sanctioned from the Financial Inclusion Fund of the National Bank for Agriculture & Rural Development (NABARD). During the period from December 2016 to March 2017, a significant initiative was taken to augment the utilisation of debit cards, leading to an elevation in the number of PoS terminals by an extra 1.25 million by the culmination of 2017 as against 1.52 million as on November 30, 2016.

As reported by Medianama, per the data presented by the RBI, the number of point of sale (POS) terminals grew up to 3.14 million in March 2018, up 24% from 2.53 million in March last year. However, this growth in the terminals is anticipated to be higher with incentivising of PoS manufacturing in India.