Thursday, August 27, 2015

Now withdraw INR2000 from Point-of-Sale (POS) Terminals

          POS terminals come in a wide variety of sizes for numerous uses. The most common usage of POS terminals is to swipe the Credit Cards/Debit Cards for CashLess transactions.

          In India, since 2009 POS terminals are enabled for LessCash transactions too. The first notification by Reserve Bank of India was issued in 2009 permitting cash withdrawals from POS Terminals. Subsequently, in September 2013 this facility was extended to pre-paid cards issued by the banks.

This step was introduced by Reserve Bank of India to:
1)     Reduce the pressure on ATMs
2)    Reduce the cash deposits by the merchants in bank accounts
3)    Obviate   the need to install ATMs in nook and corner of the country
4)    Familiarise Bank customers with electronic banking

The normal POS terminals did not support Cash Withdrawals hence the volumes of cash withdrawals through POS terminals were slow to take off.

Over the years with sustained campaigns by the banking industry has led to this ‘cash withdrawal’, utility becoming popular.

However, there are no statistics on public domain highlighting the number of ‘cash withdrawals’, through POS terminals every month.

RBI Notification dt RBI/2015-16/164,DPSS.CO.PD.No.449/02.14.003/2015-16 dt.August 27, 2015 highlights the growing popularity of the ‘Cash withdrawals’, through POS terminals.

Through the above notification:    

a)     RBI doubles Limits of Cash Withdrawal at POS for Tier III to VI Centres.
b)    The limit for cash withdrawal at point-of-sale (POS) in Tier III to VI centres is doubled from 1000/- to 2000/- per day.
c)     This facility will be available for debit cards and open system prepaid cards issued only by banks.
d)    The limit remains unchanged at 1000/- per day at Tier I and II centres.

This enhancement is envisaged towards enhanced customer convenience and aid re-cycling of cash in Tier III to VI centres even as the push towards a less cash society is pursued.

Basing on feedback received, this facility will be reviewed keeping in view the progress in e-payments and other related developments. 

Banks should ensure that customer charges levied, if any, should not exceed 1% of the transaction amount at all centres.

All merchant establishments where this facility has been activated should display/indicate clearly the availability of cash withdrawal along with the charges, if any, payable by the customers.

The facility is available irrespective of whether the card holder makes a purchase or not. In case the facility is availed along with the purchase of merchandise, the receipt generated shall separately indicate the amount of cash withdrawn.

Cardholders must swipe their cards at the POS and provide PIN for authentication similar to withdrawing cash at an ATM.

Publicity by the participating banks is the key to enhanced volumes. The Card issuing banks that have enabled this functionality are encouraged to create sufficient awareness of this facility amongst their customers.