Chennai, January 24, 2018: India’s fast growing Retail sector has
been facing unprecedented situation ever since the government made two major
initiatives - demonetization of higher
order currencies and introduction of
Goods and Services Tax. While the former was intended to promote digital
transactions and make India a cash-free economy, the later was to introduce
centralized tax regime, both had bearings on the retail sector.
As impacts of varied degrees are
still being felt by consumers and retail businesses, with Budget 2018 is round
the corner, Indian industry is pinning hope on Budgetary recommendations to
ease out several pain-points being felt by retailers and consumers alike.
While the initiative to
digitalize retail transactions across the country has created huge jump in
digital transactions, the inefficiency of banks to provide adequate Point of
Sale (POS) payment terminals to shop owners and steep Merchant Discount Rates
(MDR) have played a spoil sport to India’s cruise towards becoming a cash-free
economy.
“The digital payment eco-system
requires excellent infrastructure and support system to increase its usage and
reach. The main issue is inadequacy of
POS machines, which are not made-in India but have to be imported. To add to
the woes of retailers and customers is the high MDR which has to be borne
invariably by the customers when they make card payment every time. Though the
RBI has recently reduced the MDR for payment up to Rs 2000, the government
should remove MDR altogether to encourage more retailers to approach banks to
install POS machines. Also, there should be more incentives for shoppers and
merchants for adopting digital payments,” says Bhaskar Venkatraman, CEO and Director of Millennium India, a
pioneer in introducing POS machines to Indian retailers to automate their
business.
The GST which was introduced with
an intention of integrating all state and central taxes for goods and services
and creating a uniform tax regime, still faces a lot of flak from people and
merchants for keeping certain essential items on high tax brackets.
“There are still a lot of POS
terminals and peripherals which are being imported after paying huge duties and
taxes. The GST paid on POS machines
supplied to merchants to automate their store operations are very high. This
negates the very purpose of digitalization move as high cost discourages small
and medium retail businesses, who form more than 80 per cent of retailers across
India, from automating their store with digital transaction facility,” feels
Bhaskar, who was instrumental in launching India’s first and exclusive
ecommerce website (Justransact.com) for POS products to reach retailers in
remote regions of India.
Though India currently has just
over three million POS terminals as on November 2017, to fulfill the ambition
of cash-free economy, the government should attract nine million more retailers
by providing POS terminals free of cost to them, feels Bhaskar.
Press Release made for Millennium India, Chennai.
