POS terminals to tackle demonetization

After three months of demonetization in India, some sectors of the economy continue to struggle with the lack of available cash, people continue transitioning towards new ways of paying for basic goods and services. On the other hand, there are businesses which are being revolutionized with electronic payment capabilities.

From the moment when PM Narendra Modi announced demonetization on November 8, 2016, India has seen a jump in digital payments as more users transacted to buy goods and services across the country. The rapid shift is the major result of shortage of currency notes across banks and automatic teller machines across metros, small towns and villages.

What is a POS Terminal??

During demonetization, the adoption of POS made the lives of retailers and businessmen much easier. A point of sale terminal (POS terminal) is an electronic device used to process card payments at retail locations.

A POS terminal generally reads the information of a customer’s credit or debit card, checks whether the funds in a customer’s bank account are sufficient, transfers the funds from the customer’s account to the seller’s account (or at least, accounts for the transfer with the credit card network), records the transaction and prints a receipt, point of sale terminals are a combination of software and hardware that allows retail locations to accept card payments without updating their cash registers to read cards directly.

Cost of Installing

The cost of installing POS terminals varies with the size of the business and the terms from the supplier. Small merchants may have to pay rent for the terminal, as well as pay an additional per-transaction fee. The trend is away from the traditional use of just magnetic stripe reader as more options open up for mobile payments.

A point of sale terminal is a computerized replacement for a cash register which can progress credit and debit cards. A customer needs to enter a card PIN to complete the transaction using the POS terminal.

How merchants can install?

Being a merchant, one can request the bank where he/she has an account to install POS machines at the establishment. The end-customer does not have to pay any charges for swiping his debit/credit cards at the POS terminals. However, the merchants have to pay the issuer what is known as merchant discount rate (MDR). The issuer bank is the one which installs the machines at the merchant establishment.

In theory, though customers don’t have to pay, in practice, merchants increase the cost of the product and services sold, in a move to pass on the charge incurred by them to the customer.

POS Systems

A POS System or point of sale system is the term used to describe a system of software and hardware that aid retailers and restaurants with sales, inventory management, analytics, reporting and employee management. A typical POS System consists of a computer that runs the POS software, a receipt printer, barcode scanner, credit card reader and an on-site server for legacy based point of sale systems. Cloud based POS systems that run on iPad and other hand-held devices don’t need a physical server on-site because everything is accessed, saved and synced online.

POS or Swipe Machine as it is popularly known is a technological instrument provided to a Merchant Establishment (ME) to carry out the sale of goods or services to customers in a cashless environment. All the customer has to do is swipe his/her Debit, Credit or Prepaid Card.

One of the provider of payment solutions to every business, Atom Technology, post demonetization, has seen a 10 times growth in POS terminal requirement.

Atom was formed in the year 2006 with a vision to create a mobile payments ecosystem that would work getting digital payments in the hands of the last mile of the economic grid.

Having realized the economic and business diversity in India, over a period of years, the company has metamorphosed into an omni-channel payments service provider covering all channels of electronic /digital payments i.e. mobile, IVR, online and POS. Atom also have an authorization from RBI to issue prepaid cards and wallets.

Post demonetization, Atom technologies have seen a growth of more than 100% growth in transaction across all its verticals.

Transactions using Atom’s POS have gone up by more than 40-50% post demonetization and the company has seen phenomenal demand for deployment of POS terminals - not only from Metros and Tier 1 cities, but even from a large section of Tier 2 and Tier 3 cities.

Apart from banks, the company has also seen a huge spike in the demand of POS by the unorganized retail sector. There were also more than 1000 direct leads for POS deployment from Tier 2 and 3 cities.

The MD & CEO of Atom technologies, Dewang Neralla focused on creating an end-to-end payment ecosystem over Internet, IVR, mobile and point-of-sale says, “Demonetization has resulted into a rapid growth of transactions and the company has seen phenomenal demand for deployment of POS terminals.”

In conversation with DQ Channels, Neralla said, “The company aims to target more and more merchants on POS terminals in times to come.” Neralla added that during this financial year, the company will process more of transactions and it aims to grow this within the next three years.

With the increase in demand of deploying POS terminals, Neralla described the need of creating a client-centric culture within the organization in order to access the progress of Atom in the coming time.

Atom has won mandates from United Bank of India and RBL Bank for development and deployment of POS terminal across India. The mandate has been frozen post-demonetization announcement. Atom plans to tap over 10 million bases of current account holders of the two banks. The company already deploys over 27000 POS terminals for Union Bank of India.

This seems like demonetization have resulted into some pros to the payment solutions provider companies like Atom, who are registering more business through this time and looking forward to the adoption of more cashless tools like POS terminals.