Reserve Bank of India has decided to ask banks to contribute funds for the installation of point-of-sale (POS) terminals concerning the low usage of debit cards while making electronic payments.
The introduction of Jan Dhan Yojana has increased a number of debit cards in the country, with more than 68 crore debit cards in circulation.
POS terminals that accept credit cards have increased slightly from 12 lakh to 14 lakh. When the number of POS terminal swipes is compared to ATM transactions, the ratio is approximately 1:10.
This proposal has been made considering the creation of ‘acceptance development fund’ which will reduce the pay-outs required from smaller merchants for installation of POS terminals.
RBI will provide its support by giving funds for this purpose rather than mandating the installation of POS terminals for banks that have not shown interest in the business. At present, four banks- SBI, HDFC, ICICI and Axis Bank are leading the merchant acquisition business.