A few key impediments to build Debit / Credit Card POS infrastructure in India are:
High cost (installation and operations): As per various estimates the cost of a POS terminal in India ranges from INR8k-12k (including countervailing duties and taxes). In addition, the annual operating cost is INR3k-5k per POS.
Low volumes and higher attrition at merchants: A high 30-40% per year staff attrition rate at merchants makes the capacity building process onerous. Finally, low transaction values and volumes at smaller merchants, especially outside Tier 1 cities, make it unviable for banks to expand their footprint to such segments.
