Merchant terminals in India can
now be used as cash withdrawal points. Though customers, for now, can only withdraw up to Rs. 1000 through these terminals, this has the potential to augment financial inclusion efforts. Of course, banks are still required to adopt stringent KYC norms but the low costs and high convenience of withdrawals at POS terminals (there are 10 times as many terminals as ATMs in India, according to the Hindu report) indicate that financial inclusion efforts might receive a big boost.
It remains now to be seen how banks will go ahead and implement this. I think points of interest will primarily revolve around containment of frauds and payment structures.
3 comments:
This is pretty cool. Not only does it massively increase the (potential) number of points from which a customer can withdraw cash, low income customers may also be more comfortable withdrawing cash from a merchant site since the merchant can help them with the transaction.
Nice move. But i think, providing an additional withdraw point is just one side of the required moves, it is facilitating the section of low income people who already have bank accounts. So in a way they are already financially included. This sounds to be a brilliant idea when it comes to facilitate financial inclusion of those who are formally introduced to banking system, atleat once. But to include more population, models like BC model are more appropriate as of now.
This will help the penetration in urban areas. POS in towns with sub 100K population is likely to be not that great. Below 50K, probably non existent? Is there a good source for this data?
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