Digital payments: PoS terminals won’t lose sheen in post-Covid-19 world, says Worldline India

Point-of-sale (PoS) terminals are here to stay and will likely continue to underpin the growth of digital payments at least for the medium term in the post-Covid-19 world, a new report by electronic payment processor Worldline India said.

There are huge number of PoS terminals — over five million— in the Indian market and they will not disappear on account of the Covid-19 pandemic, said Sunil Rongala, Vice President-Strategy, Innovation and Analytics, Worldline India in the report.

These PoS terminals can be safely used —even post-Covid-19– if disinfected regularly, according to Rongola.

Rongola highlighted that a number of PoS terminals are NFC enabled and therefore will be able to accept transactions below ₹2,000 without any physical contact. In India, a high number of transactions are expected to be below ₹2,000.

The total number of PoS terminals deployed by merchant acquiring banks crossed a milestone figure of five million in January-March quarter. As of end of March, there were 5.13 million PoS terminals in the country. While private sector banks represent about 69 per cent PoS terminal market, public sector banks make up for 27 per cent.

Card issuance

Meanwhile, the number of credit cards issued have increased by 24 per cent in January-March quarter and the total number of debit cards in circulation dipped by 11 per cent as compared with Q1 2019 (January-March). As of March 2020, there were 57.74 million credit cards and 828.56 million debit cards in the country.

In Q1 (January-March) 2020, the total credit card transactions volume was 553.87 million, out of which 313.34 million was done at PoS terminals and the remaining 240.52 million was e-Commerce transactions and digital bill payments through ATMs.

In terms of value, credit card transactions accounted for ₹95,226 crore at PoS terminals and ₹84,068 crore at e-Commerce transactions. This has brought the total volume of transactions processed through credit cards at ₹1,79,294 crore.

Credit card transactions accounted for 30 per cent of total volume of card transactions, and in terms of value it covers about 44 per cent. While credit cards are still preferred for high value transactions, debit cards are being used for small ticket size purchases.

The issuance of debit cards picked up in 2020, over 23 million debit cards have been added in the system since December 2019. Debit card transactions volume and value in January-March quarter was 1,273.40 million and ₹2,30,023 crore respectively. The number of debit card transactions processed at PoS terminals was 696.85 million while e-Commerce transactions, card-to-card transfers and digital bill payments through ATMs were 576.55 million.

In terms of value, ₹1,02,403 crore was processed at PoS terminals while ₹1,27,620 crore was processed at e-Commerce transactions, card-to-card transfers and digital bill payments through ATMs etc, according to the report.

In January-March quarter, there were 4251.73 million Mobile App based transactions and 811.61 million net banking/internet browser based transactions. It is evident that consumers prefer mobile Apps frequently for small ticket size transactions and net banking/ browser based channels for high ticket size transactions.