NABARD will support banks for cost of setting up two POS machines in villages

National Bank for Agriculture and Rural Development (NABARD) will be providing support to the banks to cover one lakh tier 5 and 6 villages with up to two point of sale devices (POS) per village, minister of finance Santosh Kumar Gangwar said in a reply to the Lok Sabha. He added that support is being extended to a limit of 80% of the total cost of the (POS) , with a cap of Rs. 6,000 per POS.

During the Union Budget for 2017-18, finance minister Arun Jaitley said that 20 lakh Aadhaar POS devices, which can process Aadhaar payments and card payments, would be set up in the country.  Aadhaar payments on POS machines can be done on the Aadhaar Enabled Payment System (AEPS) protocol. The AEPS is a financial inclusion product developed by the NPCI which allows cash withdrawal, deposit, and funds transfer at Micro ATM through a business correspondent.

The number of financial transactions of the AEPS for the month of January 2017 stood at 2.65 million and the value of these transactions stood at Rs 316 crore.

Gangwar added that NABARD has approved an incentive scheme for merchants of 0.5% of transaction values up to Rs 2,000, subject to a cap of Rs 10 per transaction, and a maximum of Rs 10,000 per merchant per month from the Financial Inclusion Fund for Aadhaar-based merchant transactions.

POS at fair price shops

The minister of finance also said that POS machines with Aadhaar capabilities have been installed at Fair Price Shops (FPS), commonly known as ration shops under the Department of Food and Public Distribution. These POS machines will be used for authentication of beneficiaries, recording of sales of subsidized food grains at the FPS, and uploading their transaction data at a central server.

He added that out of 5.26 lakh FPSs across the country, about 1.79 lakh FPSs have been automated. Tamil Nadu is leading with 34,774 FPS shops being automated in the country, followed by Andhra Pradesh (29,082) and Rajasthan (25,721).