POS or card swiping machines are manufactured by two companies in China that dominate the market.
New Delhi : Finance Minister Arun Jaitley today said the government and the RBI are taking all the necessary steps to bring down the digital transaction cost with an aim to move towards a cash-less economy.
At his 5th Meeting of the Consultative Committee attached to his ministry, Jaitley said digital transactions are a parallel mechanism, not a substitute, for cash transactions and “cashless economy is actually a less cash economy as no economy can be fully cashless”.
Regarding the availability of point-of-sale (POS) or card swiping machines with banks and POS providers, Jaitley noted POS machines are manufactured by two companies in China and the government has waived duties on them so that these machines become cheaper and reach the banks easily, so bank to provide the POS to shopkeepers.
Banks in india all ready running up with shortage of POS machines as the process of procuring POS from China take weeks, according to media reports. Bloomberg-Quint reported earlier that Chinese company Verifone and Ingenico control nearly 80 percent of the POS market.
Mr Jaitley also added the government and the RBI have taking various steps to bring down the cost of digital transactions in country and specifically mentioned about MDR(Merchant Discount Rate) charges, which are charges by Banks to merchants on each card transaction through POS. These charges and the expensive, startes from 1.4% of totle purchange to 3%, POS machines have been big reasons behind the low adoption of POS machines by merchants in India.
Jaitley further said the government is conscious of the need of cyber security of high level to secure digital payments. He assured MPs that the government and RBI are fully aware of cyber security challenges and ensuring strong firewalls around the systems.
Benefit of End User
If there are enough POS machine with bank, they can issue it to shops and you can easily do cashless transaction. Bank gives this machine to shop of retailer in free but they charge on transaction and monthly/yearly maintenance charges.
Why govt. waiving off import duty?
According to multiple source, after demonetisation government had failed to print required amount of new currency to bring situation under control, due to this government is coming up with many cash-less economy plans to help citizen with the smooth transaction. According to economic times report it will take minimum of four to six month to printing and circulate all demonetised currency back in market.
With PTI inputs