The number of shops accepting card payments has jumped from 15 lakh to 25 lakh with banks adding over 10 lakh point of sale (PoS) terminals since demonetisation on November 8, 2016, according to media reports quoting sources.
According to SBI, given the level of digitisation, the requirement of currency notes in the economy will come down by over Rs 1 lakh crore.
Prior to demonetisation, there were 15.1 lakh credit card swipe machines as of October 2016. This number jumped to 22.2 lakh in February this year and, according to an official of the National Payments Corporation of India (NPCI), the number has already crossed 25 lakh since then.
Half of the additions have come from SBI, Axis, HDFC Bank, Corporation Bank and ICICI Bank.
SBI has added 1.24 lakh machines in four months and HDFC Bank and Axis Bank have added 1.18 lakh each. Corporation Bank has added 80,822 and ICICI Bank has seen its network grow by 67,000.
According to Soumya Kanti Ghosh, chief economist, SBI, around Rs 1.17 lakh crore worth of notes need not be printed given the scale of shift to cards.
This will bring down cost of printing in the range of Rs 500-1,000 crore. "Recent data on digital payments published by the RBI indicates sharp growth in digital payments.
This includes setting up 5,476 PoS machines a day after demonetisation, jump in debit card usage and 36% increase in mobile banking transactions," said Ghosh.
Egged on by the government, banks have finalised plans to add another 30 lakh shops to the electronic payment network by September 2018. This includes 10 lakh additional PoS machines, 10 lakh Aadhaar-enabled payment facilities and another 10 lakh outlets accepting payment via QR code.
In some cases, while banks are lending their names to merchant acquisition network, the investment is being done by third-party processors.