Customers entering retail shops are about to get an experience upgrade. Instead of paying money, they may enter the shop and leave with money, rather than paying it.
Retail shops in India have taken on many an ‘avatar’ over the years, but this one overshadows anything that has passed previously. They are all set to become the middle-men (dalal) for a banking service! And this new gimmick may well make these shops the smallest banking entities anywhere.
What this means for a bank customer or a retail shopper out buying groceries, is that there would be no need to carry out an on the spur-of-the-moment search for an elusive ATM in a desperate effort to get hold of cash while shopping or whatever.
All that needs to be done is to walk into the nearest retail shop and flash a debit card, swipe get cash and shop-on-till-you-drop, or pay the autorickshaw.
What has made this possible is a new directive issued by the Reserve Bank of India (RBI), which allows people to encash up to Rs 1,000 in a day, without buying anything, from the shop to avail the facility – in case you are wondering, there is no prohibition on purchases.
The move is expected to be available to more than 14 crore people in India who have debit cards.
But the only catch that remains is that the consumer might have to pay 2-3 per cent fee to avail this facility. However, if the person pays for a purchase of anything, then the receipt would have to separately indicate the amount of cash which has been withdrawn. But this would only happen once the swipe machines are upgraded.
In that case, banks might split the service charge with retailers to make them offer the deal in their establishment. People residing in smaller towns or even rural areas are expected to be especially benefited by this as there is a lesser number of ATMs in these areas. Apart from that, the move would also encourage the use of debit cards at point-of-sale (PoS) enabled merchant establishments.
According to RBI, any merchant establishment designated by the bank, after due diligence has been carried out, can opt for the facility.
The usage percentage of customers utilising their debit cards for making payments reveals a huge difference between public sector and private sector bank customers -- around 2-3 per cent of public banks’ customers use debit cards to make payments, while 14-19 per cent customers of private and foreign banks do the same.
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