The need for POS infrastructure in India

With RBI’s major step to appoint a former UIDAI (Unique Identification Authority of India) chief Nandan Nilekani as the chairman of a five-member high-level committee, the anticipations of various advancements in the FinTech domain have got raised.

A major part of this committee is to increase the provision of digital payments in rural areas also apart from urban areas. For this to happen, availability of POS infrastructure in India is the need of the hour.

In a recent article in Hindu Business Line, Mr. Rajesh Desai opined to “Incentivise the payment PoS manufacturer in India to increase PoS base through local manufacturing.”

This suggests that POS manufacturers in India are one of the key drivers of the success of digital payment sector.

Having said that, the FinTech will be able to spread the power of its secure, quick and convenient transaction related services only when the related areas are growing parallel to it.

Few of the major players operating in India POS terminals market include Verifone India Sales Pvt. Ltd., Ingenico International India Pvt. Ltd., Ezetap Mobile Solutions Pvt. Ltd., Mswipe Technologies Private Limited, MobiSwipe Technologies Private Limited, Pine Labs, PAX Technologies Pvt. Ltd, and so on.


In the era when online payments have picked pace with all the zeal, the availability of greatly working PoS infrastructure is a necessity.

PoS manufacturers in India can become a big supporter of Digital India initiative as they can make installation of the machine at certain outlets quite convenient.

If PoS manufacturers are incentivised and given the support as required, it will benefit the businesses in several ways. More of PoS manufacturers in the country means more of all the advantages that come with it.

Firstly, the machine is available at a lower price as compared to the machines manufactured by companies abroad.

Thus, it would successfully reduce the expenditure of businesses opting for it.

Secondly, it helps rural sectors adopt PoS machines without paying a hefty amount for them. Moreover, the availability/supply of these machines would be much easier.

Thirdly, the manufacturers of PoS machines can look into the demands of the businesses locally and can inflict changes in supply accordingly.

The endless advantages of greatly working PoS manufacturers in the country can steer the nation toward progress drastically and help keep pace with the digitization.

As PoS manufacturers in India are suffering from manufacturing glitches, it has impacted the reach to unorganised retail merchants/rural markets/small businesses significantly. 

In an article in Financial Express, a PoS manufacturer said, “We had to reorient our strategy in terms of the manufacturing plans, but currently, we are not close to the numbers we had anticipated”.


According to a data published by RBI, the number of point of sale (POS) terminals grew up to 3.14 million in March 2018, up 24% from 2.53 million in March last year.

However, this growth in the terminals is anticipated to be higher with incentivising of PoS manufacturers in India.

Source: Medianama

Above chart shows the growth of PoS terminals over a period of time in India which is happening at a slow and steady rate.


According to an article in Wallet buddy, the cost of a point-of-sale (POS) terminal in India ranges from INR 8,000 (USD 118.9) to INR 12,000 (USD 178.3); countervailing duties and taxes account for about 20 percent of the price.

In addition, the annual operating cost is INR 3,000 (USD 44.6) to INR 4,000 (USD 59.4) per terminal. That covers paper and servicing costs, amounting to about INR 3.9 billion (USD 0.06 billion) annually for all installed 1.3 million terminals.

Additional costs include those to build merchant and acquirer capabilities.

A high rate of staff attrition at merchants of 30 percent to 40 percent a year makes the process of capacity building onerous for all parties involved.

Finally, low transaction values and volumes at smaller merchants, especially outside of Tier 1 cities, make it unviable for banks to expand their footprint into such segments.

Manufacturing in a country abroad (Three weeks or more)
Import (Three weeks)
Customs Clearance (Three weeks)

Source: Wallet Buddy

The flow above shows the journey of PoS machines or terminals when imported. This journey consumes maximum time and is not cost effective and thus, poses a problem for the merchants in the country.

It is quite evident that the journey of a PoS machine from the manufacturer to the retailer (business) needs to be made even simpler for the country to progressively acquire the number PoS terminals required.

Months (Year 2018) On-line No. of Transactions with Credit cards(Actuals) Amount of Transactions with Credit cards (Rs. Millions) No. of Transactions with Debit cards(Actuals) Amount of Transactions with Debit cards (Rs. Millions)
February 3079487 114753201 376597.4 282007092 370366.4
March 3083067 127292249 443081 318899139 418567
April 3193356 132318612 448342 333766148 454571
May 3247096 138290485 472814 352117113 468079
June 3311184 135976847 462763 358821967 479235
July 3268817 145006210 477585 367352976   483062  
August 3332484 144201787 479818 357172130 489719
September 3393396 138230471 461007 362747915 458411
October 3450355 161064473 561782 393387604 542982
November 3510859 145845853 516176 376567635 540411

Above table shows POS transactions in India in the year 2018

Hence, we can more easily achieve our target of making the country digitally inclined if certain measures are taken and, it can pace up the country to grow parallel to the more developed nations successfully.