Should eCommerce companies also log onto Cash Delivery Service?

          Way back in 2009, Reserve Bank of India vide this circular allowed cash withdrawal of INR1000/- from Point-of-Sale (POS) Terminals.

          Over the last few years, few Banks have ventured into Cash Withdrawal through POS Terminals. However due to various factors, this has not been much of a success.

          Now, there is a chance for Indian eCommerce Companies to explore the  vast market of physical cash delivery.

          It is not that much complicated and does not require much additional investments by the eCommerce companies.

          The brief process flow is as under:

01)  Delivery persons carry MPos (Mobile POS) terminals along with physical cash of maximum INR25,000/-

02) At the time of delivery of the goods, enquiry is made if they would like to withdraw physical cash through their debit cards.

03) In case where the customer says YES, the Debit Card is swiped in the MPOS terminal and cash handed over.

04) Initially the limits can be set to INR1000/- per transaction.

This is win-win proposition to increase the share of Safe Digital Transactions in our country.

Cash Withdrawal at Point-of-Sale (POS)

Presently cash withdrawal facility using plastic cards is available only at Automatic Teller Machines (ATMs). As on May 31, 2009, number of ATMs and POS terminals in the country stood at 44,857 and 4,70,237 respectively. The use of debit cards at Point-of-Sale (POS) terminals at different merchant establishments has been steadily increasing. As a further step towards enhancing the customer convenience in using the plastic money, it has been decided to permit cash withdrawals at POS terminals. To start with, this facility will be available for all debit cards issued in India, upto Rs.1000/- per day.

White Label ATMs (WLAs) in India – Guidelines. Delink Cash Supply

            The two major RBI notifications on WLAs are RBI Circular No DPSS.CO.PD. No. 2298 / 02.10.002 / 2011-2012 dated June 20, 2012 and DPSS.CO.PD. No. 1088 / 02.10.003 / 2013-14 dated November 14, 2013 on the captioned subject.

            In the last one year, 4,000+ WLA ATMs have been operationalised in India. Majority of the ATMs are located in Semi-Urban and Rural Areas.

            As per extant guidelines, only the Sponsor Banks could supply ATM Fit cash to the WLAO for loading in their ATMs. As the reach of the Sponsor Banks was limited to a certain geographical area, the Sponsor Banks had to tie up with other commercial banks for supply of ATM fit cash.

            Such an arrangement was leading to operational inefficiencies in the whole WLAO cycle and also increasing the operational costs.

            As a certain level of maturity has now been reached in WLA operations by all the stake holders, the stake holders represented to RBI for certain modifications in the operating conditions.

 Based on the review of the operations of White Label ATM (WLA) as well as representations received from the stakeholders, RBI has decided to as under:-

• Delink cash supply from that of sponsor bank arrangements.
• WLAO may now tie up with other commercial banks for cash supply at WLAs.
• While the cash would be owned by the WLAO, the responsibility of ensuring the quality and genuineness of cash loaded at such WLAs would be that of the cash supplier bank.
• A  suitable Service Level Agreements (SLA) to  be drawn up between the WLAO and the cash supplier bank for adequate supply of genuine and good quality notes.
• WLAOs who have been authorised under PSS Act 2007 and have commenced operations are required to intimate RBI regarding commencement of the services