India Post is reportedly planning to equip postmen with point of sale (PoS) machines that will allow postal recipients to pay for parcels with a debit or credit card. The Financial Express reported that the push comes as a part of the India Post’s ambitions of becoming a key player in the digital banking space.
According to the report the project is expected to be rolled out within a matter of weeks. The suggested timeline to have postmen carry PoS machines would coincide with the suggested final rollout of the India Post Payments Bank (IPPB) with the setting up of 650 branches by the end of April 2018. IPPB is currently only accessible at two branches in Raipur and Ranchi.
Debit cards in India
Although the government’s drive to get people to open bank accounts in rural India has led to the growth debit card holders, the lack of infrastructure has limited use of these cards. According to numbers shared by the Finance Ministry in the Parliament, 235.6 million RuPay debit cards have been issued to Jan Dhan Account holders as of 28 February 2018.
As of January 2018, the number of debit cards held in India stands at 846.7 million, with 4.23 million new cardholders being added in the first month of the new year.
FE reports that the local arm of French payments company Lyra Networks India has been given the mandate to develop and connect the network of machines. The report speculates that anywhere between 150,000 and 210,000 new PoS machines could be put to use by India Post and that PoS machines on average cost anywhere between Rs 6,000 and Rs 10,000 apiece (the massive purchase order could drive down those prices). Beyond the machines themselves, there will be other cost involving logistics and cellular/internet connectivity.
As per Medianama’s February 2018 report on Digital Payments in India, there are 3.03 million POS machines in operation across the country (as of December 2017). The number of POS machines in the country has risen 71% since demonetisation although the monthly growth numbers have declined from 300,000 in March 2017 to 30,000 in December 2017. This number could see a significant surge once India Post begins the rollout of this plan.
ATMs for IPPB
With the rollout of IPPB, India Post aims to issue debit cards to account holders and plans to open its own ATMs to serve these cardholders. “In line with the Cabinet’s decision, IPPB intends to rollout 5,000 ATMs over a period of time. At present, IPPB will leverage the DOP ATMs for its banking operations, which are already connected with network of ATMs of other banks,” Communications Minister Manoj Sinha had said.
On last count, the India Post Payments Bank had issued 1619 Debit Cards: around 832 in Jharkhand and 787 in Chhattisgarh. While the Payments Bank hasn’t installed any ATMs, the Department of Posts has around 976 ATMs in rural India.