Indians are increasingly swiping their debit cards for making direct payments to merchants through Point of Sales (PoS) terminals, as compared to ATM withdrawals, data from the Reserve Bank of India (RBI) suggests.
Where ATM withdrawals grew at a slower pace of 15%, debit card swipes on PoS terminals have risen over 27% in March 2019 compared to the corresponding period a year ago.
In actual terms, the total number of financial transactions done by people using their debit cards at ATMs stood at 891 million for the month of March, increased by 15%, against 775 million in March 2018.
In contrast, the financial transactions done by the debit cards at POS terminals stood at 407 million, an increase of 27% against 318 million in the corresponding month last year.
The debit card payments for merchant transactions have logged an increase of 261% in March 2016-2019, from 112 million dealings in March 2016 period to 407 million in March 2019. This increase is in stark contrast to a mere 21.8% growth in the total number of ATM withdrawals from debit cards over the same span of time (March 2016-19).
Meanwhile, credit cards clocked 162 million PoS transactions this March (2019) against 127 million transactions in March 2018, a hike of 27%. Whereas, there is only a 9.8% increase in the credit card swipe through ATMs since last year.
In November 2016, the government through demonetisation took out almost 85% of the cash in circulation from the domestic economy, which gave the biggest push to debit card payments for merchant transactions.
According to the RBI data, the number of ATMs deployed by the banks has stayed constant over the years, at 2.02 lakh in 2019, 2.07 lakh in 2018, 2.08 lakh in 2017and around 1.9 lakh in 2016,respectively.
Although, PoS terminals (in terms of their number) have logged a growth of 20% from 30 lakh terminals in March 2018 to 37 lakh terminals in March 2019. However, they increased by 82% from 13 lakh terminals in March 2016 to 25 lakh terminals in March 2017.
(Edited by Rupa Burman Roy)