Faulty policy: Card levy hits cashless buys

Hyderabad: The government, RBI and banks, may be going all out to encourage cashless transaction systems after demonetisation, but they seem to be indirectly discouraging merchants and roadside vendors from accept card payments by imposing transaction charges.Due to the additional burden, most merchants and vendors avoid usage of Point-of-Sale machines and are demanding cash from their customers.

As per a survey conducted by MediaRedSeer, online transaction systems, cashless transactions and e-wallet systems saw a rapid increase after demonetisation. But a decrease has been noticed after the second half of March, due to transaction charges.

The survey, which was conducted every week after the announcement of demonetisation, revealed that cashless transactions have been badly hit in south India compared to other parts of the country.

Sanjay Kumar Jain, a textile merchant from Dilsukhnagar, said they were losing business in the competition era and to overcome this crisis and go attract customers, they were providing offers and discounts.

“We are losing margins due to discounts. In such cases, we don’t accept card transactions and demand that the customer pays cash. We need to pay banks 1 to 2 per cent on the number of transactions,” he said.

Mr M.S. Kumar, secretary of Bank Employees’ Federation, said the reason behind transaction charges for PoS holders was immediate transfer from various bank cards to one bank.

“As the merchant settles the PoS transactions at the end of the day, the entire amount towards swipes will transfer into his account immediately. Usually, the amount should reach home bank and then the merchant should get it. In immediate transfer process, banks are needed to pay some transaction fee to other banks. Some banks are collecting 1 per cent while others are charging 2 per cent,” he said.

Mr. Kailash Agarwal, a trader from Amberpet, said the transaction charge was imposed by banks based on the transaction value. “Some banks are imposing 1-1.5 per cent  for transactions below Rs 2,000 and 2 per cent for those above Rs 2,000. The central government is providing only 0.75 per cent cashback and we are losing 0.25-1.25 per cent. If we accept cash, we will have a scope to rotate our profit immediately. But, in cases of PoS, we need to wait for end of the day to settle transactions,” he said.

SELF  GOAL

• Banks are collecting one to two per cent from merchants after every 100 credits towards transaction charges
• Merchants are facing cash crunch as banks are short of cash. This is one of many reasons that are forcing them to incentivise cash purchases.
• RBI has supplied Rs 1,000 crore to banks in Telangana on March 15. Since then, the bankers in the state are managing with the cash and depending on deposits from merchants.
• Big depositors like oil merchants, petrol bunk owners among others., who used to deposit Rs 10 lakh and more, are now depositing only up to Rs 2 lakh to maintain liquidity in business.