On Wednesday, mobile payments company Paytm announced the launch of mobile app PoS (Point of Sale) allowing small and medium-sized merchants to accept all kinds of card payments including RuPay, Visa, MasterCard, and Maestro.
According to the company, small-scale merchants and businesses can self-declare their details, giving their bank account details, under the ‘Accept Payments’ icon on the app to receive payments instantly. There is not hardware involved, it is a bank transfer from a merchant's account to a customer's account.
Further, through this move the company aims to empower 15 million merchants across the country by enabling them to accept debit and credit card payments. As a part of an introductory offer, the firm will not charge any transaction fees on debit cards till December 31, 2016.
Speaking on the occasion was Vijay Shekhar Sharma, Founder and CEO of Paytm, who said,
India needs a very innovating mobile PoS machine and Paytm has already been accepted by many merchants. By extending our merchant network to all other payment networks, we want to democratise payments and empower even the smallest merchants to be able to accept credit and debit card payments
This news comes at a time when the PoS infrastructure in the country is seeing a sudden pressure, due to fewer PoS machines in circulation.
According to RBI data, India as a country is fraught with only 1.49 million PoS devices which accept debit and credit cards as modes of payment. On the other end, the country’s population holds close to 730 million debit cards and has 27 million credit cards in circulation.
Further, only 3.5 percent of all retail outlets in the country accept debit or credit cards with near zero penetration in the mass retail segment, which makes up more than 90 percent of all retail in India.
With the recent announcement of demonetisation, earlier this month, Paytm seems to be aggressively hitting the market, trying to take a lion’s share.
Just on Monday, the company announced registering over seven million transactions worth Rs 120 crore on a daily basis. Further, the company claimed to have added 1,50,000 merchants to its platform, having an active network of 10 lakh (one million) offline merchants across India.
Just yesterday, the RBI released regulations allowing balance limits to go up to Rs 20,000 for digital wallets and prepaid instruments (PPIs). The regulation also involved merchants to now transfer up to Rs 50,000 per month to their linked bank accounts without any transaction limit through these semi-closed PPIs.