EVEN as cash still remains the most popular means of payment, the technological advancement has resulted in an increasing plethora of choices for making such payments. It has facilitated creation of multiple channels for e-commerce, allowing financial transactions from anywhere and anytime. Some of the e-payments’ infrastructures like Electronic Clearing Service (ECS) - Credit and Debit, Electronic Funds Transfer (EFT), Real Time Gross Settlement System (RTGS) etc have resulted in quick, safe and electronic movement of money across different sectors of economy.
 As far as small value consumer transactions are concerned, the use of plastic cards - debit and credit cards – is growing extensively even in rural belts and in geographically remote locations. These plastic cards are replacing paper currency in various financial transactions. And thanks to banks for fine tuning their operations by extending latest technological solution to their customers.
 With the number of debit and credit card holders touching 175 million, action is picking up in payments infrastructure space. It has been noticed that the debit card usage is rising due to the increased acceptance of the cards at both physical and online merchants. Notably, for ensuring efficient use of these plastic cards, debit as well as credit cards, facility of Point of Sale (PoS) terminals at various merchant establishments is a must. POS terminals are deployed in retail establishments to enable customers to make payments through debit, credit or pre-paid cards. As of now, there are over 4 lakh POS terminals across India.
 There are statistics available which reveal a rise of over 50 per cent in the total value of Point-of-Sale (PoS) transactions through debit cards. Banks are laying more emphasis to get customers to use debit cards. Earlier, they tried to wean customers away from branch transactions to automated teller machines, (ATMs). Now banks have successfully been forcing their customers to migrate to the next stage of conducting transactions at shops, petrol pumps, hotels, restaurants and other merchant establishments by swiping their debit cards, even their credit cards, at point-of sale (PoS) terminals. Instead of drawing cash at an ATM and then using it to buy goods at shops, customers are being now encouraged to use the debit cards directly at the merchant establishments. 
 For merchant establishments installing a point-of-sale (POS) system may seem like a hassle and an unnecessary expense, but looking closer, the gains are clear. For example, a PoS terminal at a restaurant can have multiple benefits. This system let the merchant establishment to manage inventory, flag items for reorder, and analyze sales patterns. A point-of-sale system is, at heart, a cash register -it opens up a new world of data about the merchant’s business.
 For the shopkeepers, the advantage of PoS transaction is getting the money credited to their accounts immediately. So, they don't have to worry about cash management. They also avoid the hassle of handling soiled notes. Even documentation and back-end work is taken care of.
 This scenario also holds true in our state as culture of plastic money is picking fast. Introduced by J&K Bank in 1996, the plastic card culture is growing day by day in the State. Remarkably, the Bank has issued more than 8 lac Debit-cum-ATM cards and the cardholders have been taking extensive benefits of this facility. But the advantage of making cashless transactions through this card has not been to a large extent, as most of the merchant establishments in the state, especially in the Kashmir valley don’t have a Point of Sale machine installed at their shops.
 Under these circumstances, the business community in the State needs to be proactive as far as allowing purchases through debit and credit cards is concerned. A merchant establishment having Point of Sale (PoS) machine, can add unimaginable advantages to its business.
 So if the merchants here are operating their business without a PoS machine, it is time to review the benefits so that they can see how having these machines can benefit to their business. A scenario is in the offing here when a customer will shop at a place where he is allowed to use his debit or credit card.
 To be precise, given the competitive financial environment of 21st century, merchant establishments here have to join the bandwagon and provide cashless transaction facility to the customers and that is possible only through a Point of Sale machine.
 Meanwhile, I have come across with several queries regarding payment of commission while making purchasing through these cards, particularly credit cards. Actually some of my acquaintances were asked to pay 2 – 3 per cent over and above the price of the goods purchased by the merchants when they preferred to make payment either through debit or credit cards.
 To put the things straight, a card holder does not need to pay any commission to the merchant establishment where he uses his card for making purchases and demanding this kind of ‘commission’ from the cardholder is unethical as well as illegal. However, the onus lies on the cardholder. If he faces such a situation, he should immediately report to the card-issuing bank. Rules are in place where any merchant establishment found indulging in such illegal practices will be delisted and no bank can install Point of Sale (PoS) terminal at such business establishments.
 However, merchants too have to exercise extra caution and due diligence while accepting cards against sale proceeds. Merchants should invariably ask for certain documents from the card holder before swiping the card on POS terminal. If the cardholder is a foreigner, the merchant must ask copy of passport. In case of domestic cardholders, the merchants must ask for copy of Election Photo Identity card, PAN Card or driving license. Besides, merchants must examine the physical appearance of the card presented for payment and ensure that embossing on the card is clear and straight.
 In succinct, in a highly competitive business market, taking advantage of all available tools to help a business thrive is essential. Choosing the right merchant solutions is critical for a business' success. Today, merchants - an online retailer or a traditional brick and mortar business - require flexible, economical, and customer-friendly initiatives. Even as there are a wide variety of merchant solutions available in the market, it’s the point-of-sale (POS) terminal which is the need of the hour. A PoS terminal facility is a win-win situation for all.

(The views are of the author & not the institution he works for. Feedback:
sajjadbazaz@greaterkashmir.com)

Lastupdate on : Sun, 26 Dec 2010 21:30:00 Makkah time
Lastupdate on : Sun, 26 Dec 2010 18:30:00 GMT
Lastupdate on : Mon, 27 Dec 2010 00:00:00 IST