Debit card PoS swipes rise 27% as per RBI data
RBI numbers for March 2019 shows ATM withdrawals growing at a slower pace of 15%
In absolute terms, debit card swipes for March stood at 407 million almost half of ATM withdrawals at 891 million. At a lower base, debit card payments for merchant transactions have gone up more than 250% between March 2019 and 2016.
In contrast the total number of ATM withdrawals has remained constant over the last couple of years hovering in the range of 800 million per month.
The biggest push to debit card payments for merchant transactions took place when the government sucked out more than 85% of the cash from the domestic economy at the time of demonetisation in November 2016.
Credit cards clocked a 22% growth rate for PoS transactions versus last year. It clocked more than 162 million PoS transactions in March 2019 against 127 million in March 2018.
“While this is an interesting trend it should be understood in the context of new ATMs not getting deployed by banks and PoS terminals increasing in number. There is no doubt about the increasing popularity of debit cards but the reason for the stagnation of ATMs could be the infrastructural challenges,” said a senior executive of a payments company on the condition of anonymity.
ATMs have been stagnant in numbers at around the 2.2 lakh range since the last couple of years, which experts say is grossly inadequate for a country of the size of India. While PoS terminals are growing, there is still a shortfall in their numbers. There are 3.7 million terminals for card payments in India having grown almost 50% from 2.5 million in March 2017, as per RBI.
“Despite the shortfall in the number of terminals, the rapid adoption of card payments shows that digital payments have the potential to become more mainstream for all sets of merchants,” said the executive quoted above. “Also newly deployed terminals in most cases are showing active transactions and not lying idle.”
Experts have suggested that not only are people using their debit cards for merchant payments directly, they are not withdrawing cash to pay each other, increasingly relying on digital modes. ATM withdrawals remained almost stagnant at 890 million in March this year against 869 million in October last year.
In the same period UPI grew 62% to 781 million in March against 482 million in October.