mPOS in India: What, Why and more

mobile-paymentsWhat is mPOS ?

mPOS or mobile point of sale is the ability for a customer transaction to be carried by a portable mobile device instead of by a traditional checkout register.

Fixed point of sales devices could be seen in restaurants and almost all the retail stores. POS is usually referred to the stage when money is given in exchange for goods. Now transactions are often made by credit and debit cards, and the modern day POS consists of a computer linked with a card swipe machine. Whereas an mPOS, a handheld portable device, does the same function but with the advantage of several such devices remotely working for the same system.

Why mPOS?

The need for mPOS is to overcome the shortcomings of the fixed POS system and also to bridge the gap between POS systems and eCommerce businesses. Using a mobile or a similar device as an alternate POS requires less up-front investment and they are far more affordable to repair or replace than traditional POS systems.

Think of a real life situation when at a retail store there is a long line at the checkout, a tired customer might give up the idea of making a purchase after looking at it. mPOS eliminates these queues and lags. In a store each employee could have such a portable register and offer rapid billing to the customers, or in a restaurant, a server could generate the bill at the table itself.

Another major advantage of it includes providing Card-on-delivery as a payment mode, which is essentially useful for Indian eTailers, as Cash-on-delivery is highly popular in India. It has also offered an array of new streams for consumer data and with the technology, retailers can now use the robust data to analyse consumer behaviour and develop marketing strategies to boost sales.

Where is mPOS being used?

With eCommerce flourishing so extensively, mobile payment is gathering its share of popularity. mPOS systems are being used everyday by so many stores, restaurants, service providers and so on.

In January 2012, Reliance General Insurance (RGI)  launched India’s first-of-its-kind point of sales service using mobile phones i.e. mPOS, allowing its customers to pay premium using a mobile phone. Any GPRS-enabled touch screen mobile phone could be converted into POS terminal, which facilitates card payments by connecting an external special card reader dongle.

Myntra, one of the leading eTailers in India, has CoD or Cash on Delivery as one of its payments options. It uses the an mPOS device enabling card payment on delivery, a paperless delivery system and exception handling. The customers allow the delivery executive to swipe their credit or debit card after receiving the product. The payment is registered by a central database and the transaction is completed instantly.

Wagamama is a worldwide restaurant chain that has adopted mPOS systems. When a customer sits down in the restaurant, a server enters the order into a small mobile computer. The order is displayed instantly in the kitchen and at the bar. When it’s ready, the chef pushes a button and a ticket is printed to tell the server where to deliver the food. After dinner, the server can present the customer with a bill, swipe his or her credit card, and prints out a receipt from a portable printer

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Who is providing this service?

There are a number of mPOS solutions providers in the world, Infosys, Motorola, HP(HP ElitePad), StellaNova, AccuPOS, Harbortouch to name a few. In India Mswipe,MRLpay and Ezetap are prominent names in this field.  UK based mPOWA recently forayed in India. And the company CircleItUp is about to launch its own mPOS device

Ezetap provides its services to Myntra, RGI, BookmyShow, Ola Cab and While Mswipe’s clients include McDonald’s, Asian Paints, ICICI, Cinemax and Eureka Forbes. Thereby, demonstrating the different scopes mPOS could spread to. These systems are decentralizing the actual point at which sales take place, minimising lag time and eliminating unnecessary paperwork.

How does it work?

There are different types of mPOS devices available. Most common are the generic handheld mPOS systems, which are like portable registers with a card swiping slot. Another popular type of such devices are card readers which could be attached to the audio jack or USB port of a mobile device, and its related app acts as an interface.

The mobile device could be a tablet, smartphone and even an iPod Touch. The basic functioning involves scanning the product’s barcode or manually entering the transaction details into the device, swiping the customer’s card, taking an electronic signature and even generating a receipt with a portable printer.

What is the potential of mPOS in India ?

According to a report by a research firm IHL group, covered by Forbes, mobile in retail is now a USD 5.7 Bn business worldwide and continues to grow rapidly. It is the single fastest moving trend in retail since Internet was added to the stores. How do we single out India’s share in this?

Like cited above, there are several mPOS providers working in India with clients in a number of different categories- Banks, movie ticketing, eRetail, Cab services etc. Both offline and online companies are actively adopting this trend.

It is an undeniable fact that Cash-on-Delivery has been a great driving force in revolutionising eCommerce in India. Customers are not always comfortable with making a prepaid transaction on a new website hence he/she will choose CoD as a payment option. In the cases where the transaction amount is large, paying by card always seems to be a better option.

Small and medium-sized businesses in India mostly accept ‘cash-only’ payments, due to high card-processing fees, mPOS platforms open an affordable channel to accept alternate forms of payment, from cards to mobile. Considering the growing market of mobile phones and tablets, mPOS systems require less up-front investment and their maintenance is more economical than the conventional POS systems.

But one must not forget that not all small scale retailers can afford high end smartphones, along with an additional card reader dongle. Considering the unfurling of RBI’s intentions to make India a less cash dependent economy, there has been an increase in the credit and debit cards users over the last two years by 25 and 42 percents respectively. Now, accepting payments by cards does become a necessity. If the current mPOS dongles developer could make a standardized device that could work on all smartphones alike, maybe then these retailers could be convinced to use them.

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For the large businesses, mPOS could prove a helping hand in managing the workforce, sales etc. by providing mobile-based inventory management, automatic sales record and so on.

In India, the mPOS trend has taken off rapidly, with a surge of new platforms launched over the past year. This trend may stem in part from an Indian market that boasts almost 300 million plastic cards, but only 600,000 point-of-sale terminals, according to Abhijit Bose, CEO of mPOS provider Ezetap which raised USD 3.5 Mn in November last year, in Series A funding.

Switching to mPOS could be hasslesome for some, considering the good number of mPOS players in India, and new ones being added as well, one might not be able to judge which one would the best for their business. And after that decision has been made, implementing a whole new system could be a bit of a challenge. Consumers, who may face a different mPOS at each of their favorite retailers, must decide which apps to download (if any), and if they should trust the platform with their private financial information.

“ The growth of this sector is directly related to the reach of banks across countries”, shared Mr. Vivek Sagar, Managing Director at EMVANTAGE Payments Pvt Ltd, service provider for online and mobile payments, He said that even if small scale businesses are able to buy mPOS devices, they may or may not be able to complete the necessities required to link it with the concerned bank. He also mentioned that there are a few mPOS device providers in the country who offer affordable units complying with the regulations set by the government of India. Hence it is not a question of the cost and standardization, but more of how these businesses are connected with the banks.

Taking in account all the possibilities, in the big picture mPOS systems could be a boon for the Indian market. For both the businesses and the customers it makes things much easier in terms of money transactions. Moreover it will add to the Government of India’s plan to reduce cash dependencies of the Indian people. Taking in account the rise of mPOS providers and the spread of their systems, it’ll soon be seen how mPOS proves to be for India.

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  • Kumar S

    Hopefully it knock and change the Traditional Indian Payment System.

  • firoze zia hussain

    totem international have a Grabba device which can be used with blackberry q5 for payment solutions as a mpos and have other data acquisition like passport reader etc also inbuilt with safety security and reliability inbuilt

  • Nitish Kannan
  • Alokedeep Singh

    Nice article..there is tremendous opportunity in M-POS becoming a main-line payments channel as e-commerce grows mult-fold in India across segments…Not only does it reduce risk of carrying also improves the overall payment cycle for e-tailers…

    • sugandhawan26

      I totally agree with you, this is soon going to be very popular