Post demonetisation, there has been a phenomenal growth in point-of-sale (PoS) terminal deployment across India, according to a Hindu Businessline report.
In a span of twelve months, the number of PoS terminals in the country rose from 16 lakh in October 2016, to 29 lakh terminals in September 2017.
And although this may seem a drop in the ocean, given India’s size and huge population, it is significant compared to PoS growth in recent years. From 2011 to 2016, the number of PoS terminals in India grew at an average annual rate of 21 per cent. In the past 12 months alone, the growth was at 96 per cent, according to a recent report by Worldline, a leading B2B payments processor in India.
Clearly, this growth outcome was a result of the government’s push for better acceptance infrastructure as well as bank-wise targets for deployment of PoS terminals. In terms of month-on-month growth, there was momentum up to March in order to fulfil the 10 lakh-PoS terminal target. Between July 2016 and July 2017, the volume of PoS transactions grew 76 per cent.
The Worldline data showed that five categories alone have contributed to 50 per cent of the total PoS transactions. These included grocery, restaurants, apparel retail, service stations and hotels.
While PoS deployment nearly doubled, growth in ATMs was a mere 2 per cent in the past 12 months. Understandably, the number of transactions has also shown a negative growth of 3 per cent in the past year, owing largely to demonetisation and subsequent
restrictions on cash withdrawals. However, the tepid growth is not being seen as the end of the road for ATM deployment in India.
“ATMs serve a basic need and there is a large section of the population dependent on them,” said Deepak Chandnani, CEO of Worldline, South Asia and Middle East.
ATMs also serve as currency recyclers and hence have a market and an ecosystem to serve beyond dispensing cash, according to Chandnani.
Card as payment option
Chandnani felt traditional cards will continue to co-exist with e-wallets although the latter has become a more useful prepaid instrument. This is because every payment option caters to different customer segments, and often customers use different payment methods for various types of payments.
Overall, the number of cards has grown by 21 per cent annually over the past 6 years. The growth was higher in 2015 when the focus was more on debit cards issued for the Jan Dhan accounts. The total number of cards, as of September 2017, stood at 853 million.
Of these, 33.3 million are credit cards. Compared to the same period last year, there has been a marked increase of 86 per cent in the number of card transactions and of 85 per cent in the transaction amount.
The bulk of the growth in transactions came from debit cards (112 per cent) while credit card transactions grew by 45 per cent. The transaction value also showed more growth in debit cards (130 per cent) as compared to credit cards (55 per cent).
Credit cards have seen a steady 9 per cent increase from 2011 to 2016. The growth from 2016 to 2017 has been 24 per cent.