The Reserve Bank of India (RBI) has released data indicating that the deployment of new Point of Sale (PoS) systems experienced its slowest growth in the fiscal year 2023-24 (FY24) since the tumultuous days of demonetisation.
According to reports by ET, while there was a surge of 14% in new PoS terminals between March 2023 and 2024, this growth rate pales in comparison to the robust rates of 28% and 29% witnessed in the preceding two years. The total count of PoS terminals now stands at 8.9 million.
In contrast, the adoption of QR codes for Unified Payments Interface (UPI) payments has doubled over the past two years, with 346 million QR codes in circulation as of March 2024, up from 172 million in the corresponding month of 2022.
The convenience of scanning a smartphone, coupled with the government’s mandate for zero Merchant Discount Rate (MDR), is driving merchants to transition to UPI payments. This transition is evident in the substantial decrease of 32% in debit card transactions at merchant outlets, while UPI merchant transactions surged by 72% to reach 8.30 billion.
While debit card swipes decline, credit card usage is on the rise, with the number of credit cards issued in India surpassing 100 million.
To regulate point-of-sale payment service providers (PA-P), the RBI has issued draft rules, bringing companies like Innoviti Payments, Pine Labs, and MSwipe under regulatory cover. Companies offering these services must apply for authorization from the RBI by May 31, 2025, or cease operations.
Pine Labs recently launched Mini, a digital payment device supporting both QR code and card transactions, aiming to cater to evolving consumer preferences and regulatory changes in the digital payments landscape.
The data reflects a shifting landscape in digital payments, driven by technology advancements, regulatory mandates, and changing consumer behaviors, signaling opportunities and challenges for stakeholders in the payment ecosystem.
