The Electronics payment market has stepped out of the shell over the last two years in India. Pushed by the vision of the RBI to create a less-cash economy, entrepreneurs have innovated across the payment lifecycle. One development that has emerged out the the payment revolution is the growth in point of sales (POS) terminals.
Almost 80% of the retail market in India does not have POS installations to offer card-based payments. However, as credit card and debit card transactions grow, it creates a huge opportunity for POS installations.
According to data released by Frost & Sullivan, India is currently the 13th largest non-cash payment market in the world; with the USA and Brazil occupying first and second place respectively.
In 2013, credit, debit, and other electronic payments grew at a rate of 35 per cent from the previous year in terms of payment transactions. POS terminals shipment volumes in the country are anticipated to grow from 0.8 million units in 2013 to 1.1 million units by 2015 growing at a CAGR of 17.2 per cent.
Despite the high consumption volume and potential for growth for POS terminals , local manufacturing is minimal. Manufacturing is restricted to assembly and is heavily reliant on imports as there is no capability in India to cater to such huge volumes.
Euro Master Visa(EMV) certifications, which are a mandate for POS terminals authorization incurs significant cost and is apparently a roadblock for local manufacturers.
In addition, there are no established standards in manufacturing, which necessitates manufacturers to make customized terminals for clients.
Reduction in sales, VAT and excise duty would attract more manufacturers to consider local manufacturing, the report said.
It also added that the National Payment corporation of India could play the role of a large clearing house to do away with EMV certifications which are expensive. “Manufacturing standards and policies can be established to consolidate and create a local manufacturing set up,” the report said.