Cash Withdrawal from POS Terminals-Shops,Petrol Stations, Hotels-FREE OF CHARGE

Cash Withdrawal from POS Terminals-Shops,Petrol Stations, Hotels-FREE OF CHARGE

15 days has passed since RBI, has allowed withdrawal of cash through POS Terminals. It is early days, for the Program to go live. The first transaction, under this Program, is expected by the middle of next year i.e 2010.

It is relevant to note, that this Program is already up and running in other European/American countries, and therefore the basic technology is in place.

One important aspect, on which Reserve Bank of India is silent, is regarding the charges.
Maybe RBI, felt that the charges issue be determined by the market forces only.

Another important aspect is that RBI has made it clear, withdrawal of cash and purchases at the same store need not be clubbed.
The world over, cash withdrawal is clubbed together with purchases at the store.

This unique facet of the Notification, adds a new dimension to the IT to be deployed.
In my opinion, there should be the service should be FREE OF CHARGE.
The following are reasons:-

01)    Installation Cost of POS Terminal is very less compared to ATM.

02)    Operating Costs of POS Terminals are very less compared to ATM.
 

03)    Stores need not invest in additional space, manpower to offer this service.
 

04)    Through this service, stores can attract new customers.
 

05)    Through this service, stores can increase the ARPC(Average Revenue Per Customer)
 

06)    Through this service, Banks can increase the float in Current Accounts. POS Merchants have invariably the current account with the POS Terminal Banks.
 

07)     Through this service, Banks can increase the float in Savings Accounts. As a saving bank account holder, I will be willing to park my money in saving account, if I am sure, that I can withdraw anytime, anywhere. 
 

08)     At present, the Cash withdrawal from ATM’s is free in India. Hence, if a Service Fee is charged for Cash withdrawal from POS Terminals, customers will prefer to withdraw cash from ATM’s only.
 

09)    Pricing this service free, will enable customers to experience the magic of ePayments.
 

10)    Pricing the service free, will stimulate more transaction activity, in the cards, which will lower down the transaction costs.

Any more reasons, folks, for the Service to be FREE.

Visit http://prashantnepayments.blogspot.com/2009/07/emagic-withdraw-cash-from-pospoint-of_24.html

for my earlier post on this subject