With the government pushing for an increase in cashless transactions, many small traders are trying to go in for electronic data capturing machines (EDCMs) and tie up with banks to become point of sale (POS). Banks too were trying to push for POS since they can reduce the dependence on cash.
Sources in State Bank of India said they were flooded with applications for such facilities from traders. Similarly, Indian Overseas Bank had 6,000 EDCMs ready to be sent out to the market.
“In the immediate future, we are doubling the 4,800 POS,” said a source in IOB. Canara Bank has set a target of 3,000 machines by December-end.
Small traders, who had previously been using card swiping machines rarely, are now using them more frequently. L. Suresh, proprietor of DDS Super Market that sells vegetable sand fruits on Railway Border Road, T. Nagar, said that what had been five transactions a day using the EDCM is now 15-20. “People are without cash and so don’t mind the card transaction charges. We don’t charge anything for debit cards since the banks have instructed that there should be no charge,” he said.
However, the POS cannot be given instantaneously. There is a process to be followed, including verification and screening at various levels by the bank, police and credit rating agencies.
Experts, however, say that a cashless economy will affect the unorganised sector. Economist Venkatesh Athreya said: “They don't have money even to return change to customers. This situation, based on trust, can go on for a while but cannot go on forever. At some point, the small trader will have to deal with the person he buys his stock from."
“By volumes, 90 per cent of our transactions are in cash. Even developed economies like United States — and Japan, in particular — deal in cash. About 46 per cent of Indians have no bank account. The KYC norms are forbidding and it is extremely difficult to start a bank account,” he said.
(With inputs from Deepu Sebastian Edmond and Deepa H. Ramakrishnan)
