Indians are going digital. Now, RBI predicts the rise of the digital POS, a payment method wherein customers can use QR codes as POS machines to make payments.
More Indians are using their debit and credit cards to pay merchants, which means lesser cash transactions. According to data by the RBI, debit card swipes on Point of Sales (PoS) terminals jumped more than 27% in March 2019 compared to the corresponding period last year.
But the RBI has bigger plans to take POS systems digital, in a bid to improve digital payments in India.
Also read: Will India hit 30 Billion Digital payments by 2020?
RBI and the Rise of Digital POS:
Recently, the RBI conducted a round of meetings to discuss the Payment and Settlement Systems in India: Vision — 2019-2021.
The main motive for the meetings was to discuss the scope of digital payments in the country. The RBI proposed an increased usage of card payments to reduce the usage of cash in stores. With the increase in card transactions, there is a reduction in cash withdrawn from the ATM, which could soon eliminate the use of cash altogether. The goal is to start from the root level and move up.
However, online businesses can also benefit from the RBI proposal. The RBI’s ‘Payment Systems Vision 2021’ document will act as a catalyst for promoting the digital payment economy and instil confidence to go online for the general public.
Some of the RBI policies that seek to promote digital POS are:
Given the current growth trend, it is expected to have 5 million active PoS by 2021
- Digital PoS (QR code) is expected to increase substantially
- By 2021, the total card acceptance infrastructure will increase by six times from the present levels.
- With e-commerce, digital POS is expected to shift Cash on Delivery (CoD) transactions to digital modes.
Other indirect policies expected to create a rise in digital POS and payments:
- Increase in use of digital modes of payment for the purchase of goods and services through an increase in debit card transactions at PoS and continued growth in PPI transactions.
- Increased deployment of card acceptance infrastructure across the country including at smaller centres with a substantial portion of the infrastructure taking care of processing contactless card payments.
- Further facilitation of mobile-based payment transactions as gauged on basis of the registered customer base (expected increase of 50% considering the base effect).
Traditional POS system: Why we need the change
Heavily reliant on internet connectivity: A strong Internet connection and ISP are needed to facilitate a POS system that is web-based. A country like India faces problems with power shortage all the time, and in such a situation, payments will not be processed.
An expensive affair: Installing a POS system is more expensive than before. There are frequent software upgrades required to keep up-to-date with technology, the web-based POS fees (monthly) are expensive which may take a toll on small businesses and their ROI.
Security risks: Not all transactions done using a POS system can be considered secure and safe. due to internet errors, transactions have taken place twice, without the customer knowing.
POS Technology: How it can change digital payments
QR Codes: The current trend with digital POS technology is the adoption of QR code. QR codes do not rely on web-based connectivity. QR decodes large chunks of data in a small grid of black and white pixels. Soon, it can help take care of POS payments by enabling
Artificial Intelligence: With the adoption of Artificial Intelligence in payments, there will be fewer risks associated with secure transactions. AI aims to create a super-intelligent machine learning system that will soon eliminate the need for layers of internet, hardware or software up gradations. AI seeks to slowly perform tasks that require human interference, so it will soon take care of features such as speech recognition, language translation, sending emails, and predictive text.
It all boils down to allowing online payments to take place in a smooth, secure manner, without the intervention of third parties, fraudsters and poor internet. We enable digital payments in all forms, keeping up with the times and RBI policies. So, if you are looking for a seamless payment experience; start collecting payments with Instamojo.