 

Fund (“PIDF”) in January 2021, to encourage acquirers to deploy POS infrastructure
(both physical and digital modes) in tier three and beyond central and north-eastern
states.

 

 

Key Opportunities

 

Zero MDR: In December 2019, the requirement of obtaining permission from the RBI
to offer cash withdrawals at POS terminals was dispensed with, and banks may, with the
approval of their board, provide cash withdrawal facilities at POS terminals. This will
bring more merchants under the ambit of digital payments. With no fee to be paid by
merchants, they are more likely to deploy POS terminals to accept digital payments (as
opposed to their previous reluctance due to payment of extra charges per transaction).
Contactless Payments: With the help of NFC, credit cards and digital wallets on a
smartphone or smartwatch can be used to complete purchases with just a tap on a screen.
Tap & Go cards are also being promoted by the Gol, as the transaction limit was raised
for contactless payments from 22000 to 25000, which will improve convenience of
digital payments even further in the future.

POS Guidelines on merchant acquiring business (2020) — Regional rural banks
(“RRBs”): The RBI has allowed RRBs to act as merchant acquiring banks using
Aadhaar Pay — BHIM app and POS terminals. These guidelines enable RRBs to deploy
their own devices and terminals.

 

Source: India Payment Services Market Outlook to 2026, Ken Research, August 2021.

India’s POS terminal markets future projections based on total number of cumulative device
installations and growth rate, for the financial year 2021 and estimated for the financial years 2022 to

90
80
70
60
50

47.2
: i
0 +

3
FY'2021

oo

2
1

os

2026 (in % lakhs)

16%
14.0%

11.7% 14%
66.4 12%
53.8 10%
8%
6%
4%
2%
+ 1 0%

FY'2022E FY'2023E FY'2024E FY'2025E FY'2026E

Percentage (Y%)

mmm Device Installations =m=Growth Rate

Note: E refers to estimated numbers.
Source: India Payment Services Market Outlook to 2026, Ken Research, August 2021.

Emerging Payment Trends:

Contactless Payments

COVID-19 has paved
based payments and A

the way for rapid adoption of contactless payment alternatives such as UPI, QR code-
PS. UPI transaction volumes increased by approximately 80% to 21,800.14 million in

September 2020 from 2999.57 million in April 2020. Total UPI transactions have more than doubled and values.
worth 23,290 billion were recorded in September 2020 as compared to 21,511 billion in April 2020.

141

 
