Millions of cards, but where are the swipe machines?
At present, there are only 1.13 million card swiping machines in India. Neighbouring China has 7.5 million such machines. As the government gears up to push electronic transactions, banks and credit card issuers are facing the challenge of limited infrastructure.business Updated: Aug 19, 2015 00:01 IST
As the government gears up to push electronic transactions to curb black money, banks and credit card issuers are facing the challenge of limited infrastructure, especially in semi-urban and rural areas.
At present, there are only 1.13 million card swiping machines in India. Neighbouring China has 7.5 million such machines.
“While there are ATMs across India, the card swiping machines are limited only to the cities and tourist destinations and this issue needs to be looked into,” said AP Hota, managing director and CEO, National Payments Corporation of India (NPCI).
Hota told HT that card users, however, can withdraw cash from the ATMs and spend, but this would undermine the Centre’s efforts of boosting payments through the electronic mode.
Banks are likely to be asked to address this within a stipulated timeframe.
A senior executive at Mastercard India also said that India’s card acceptance infrastructure needs to improve to promote payments in cards, especially in comparison to other countries.
A draft proposal for facilitating electronic transactions, put up by the finance ministry, has underlined the need to provide incentives to encourage e-transactions, which include income tax benefits for individuals making payment through debit or credit cards. It has also been proposed to do away with transaction charges on card payments at petrol pumps, gas agencies and while booking railway tickets.
Besides, the government is also looking to make it mandatory to make transactions of more than Rs 1 lakh through electronic means. This is aimed at discouraging the use of cash while putting a stop to the country’s bustling parallel economy, which operates outside the legitimate financial system.