[RSR]

Originally Posted by GrammarNazi

At Canara Bank, they wanted 1 year statement of current account (viz atleast 2yrs old), JUST to APPLY for Credit Card POS machine.

So that they'll study the transactions and decide if they find you eligible to "grant" you the swiping machine.

WHO is that beggar ? Or is our PM just bluffing & deciding the country's policies after reading WhatsApp forwards ?

That's a truly pathetic response from Canara Bank! One could understand if they're facing a shortage and requested you to wait till they get more machines, but their response conveys nothing of the sort. And why can't they just pull out details of your current account from their system?

I don't know how my bank (a non-nationalised one) is going to respond when I ask them for a card swiping machine for my current account.

Sorry if this sounds like a dumb question - any idea of whether there are charges involved for using a card swiping machine? I guess a yearly/quarterly fee (plus service tax) would be there, as indicated in their response.

Does the bank and/or card issuer (Visa, Mastercard, Rupay etc.) also take a small "cut" for themselves from every debit card / credit card transaction, in addition to the above-mentioned fee?

[binand]

Originally Posted by RSR

Does the bank and/or card issuer (Visa, Mastercard, Rupay etc.) also take a small "cut" for themselves from every debit card / credit card transaction, in addition to the above-mentioned fee?

Usually, if you spend Rs. 100 on a credit card, the merchant receives about Rs. 98. The remaining Rs. 2 is the fees charged by all the players involved - the acquiring bank, the issuing bank, an aggregator if any, and the network (Visa/Mastercard etc.).

This fees is a complicated thing which depends on a number of factors; the 2% is a ballpark figure for quick calculations. There are fixed fees and per-transaction fees, fees that change based on the card type, the way the merchant batches settlements, industry type, exchange rates and so on.

[RSR]

Originally Posted by binand

Usually, if you spend Rs. 100 on a credit card, the merchant receives about Rs. 98. The remaining Rs. 2 is the fees charged by all the players involved...

Thanks! So this ~ 2% fee has to be kept in mind while billing the customer. I suppose supermarkets, shops & other "high volume" businesses spread this cost across all transactions irrespective of the mode of payment, and hence it isn't a dilemma for them.

Even for a "low volume" business like mine, I guess it would still be better to spread out this cost, instead of charging 2% extra for card payments alone. The latter just doesn't sound right to me, although there are businesses that follow this practice as well.

[ecenandu]

Originally Posted by GrammarNazi

They wanted 1 year statement of current account (viz atleast 2yrs old), JUST to APPLY for Credit Card POS machine.

I don't understand your rant, buddy. If that is the prerequisite for applying, you should follow that rule, don't you think so.

I know a shop where they will give you money(97%) for the amount you swipe from credit card. You know how much you will be charged, if you use credit card to withdraw money via ATM and the limit will be pretty low compared to the credit limit. Some people use it that way, I don't know how common this is, though.

Is applying for debit card POS, any different?

And regarding relaxation of withdrawal limit from bank post Dec 30, I believe we can see relaxation coming for co-operative banks first, which is now heavily choked. And for general public, maybe a little relief, I'm not expecting any thing big.

[binand]

Originally Posted by RSR

Thanks! So this ~ 2% fee has to be kept in mind while billing the customer. [...] Even for a "low volume" business like mine, I guess it would still be better to spread out this cost, instead of charging 2% extra for card payments alone.

The idea is to treat this 2% as a cost of doing business. I don't know how much is the cost of doing business on cash basis, but given the popularity of cards I expect it is more than 2%? These costs:

- Cost of holding the day's collections overnight.
- Cost of securing transactions from errors.
- Cost of fraud, theft and pilferage.
- Cost of sorting, counting, packaging etc. (of currency).
- Opportunity cost. In many stores I have seen only the owner/partner doing cash handling.

[greenhorn]

Originally Posted by ecenandu

I don't understand your rant, buddy. If that is the prerequisite for applying, you should follow that rule, don't you think so.

I think you missed his point - that such rules and restrictions were making it unduly hard for businesses when all and sundry are being forced to go cashless, and the PM Claims that everyone has got one already. What if he was just opening a business?

THe fact is doubly made worse by the fact that these hurdles are being put up by State owned banks, when they should be leading from the front for implementing govt initiatives. I recall a while back that we got an ICICI machine (sometime circa 20009) for a new business that we opened without any fuss. The fees and conditions were a bit steep, but we got one promptly

[pramodkumar]

Originally Posted by ecenandu

I don't understand your rant, buddy. If that is the prerequisite for applying, you should follow that rule, don't you think so.

What part of his rant you didn't understand? When there is blaring ads about cashless economy on radio every 10 minutes(I am not kidding its true) getting a POS machine is still a royal pain. No wonder why private players like PayTM are having a field day.

Regarding prerequisites for getting a POS machine, actually there is none, my friend got a POS machine from SBI branch the moment they decided to move their current account into SBI, the rentals were waived off for one whole year, so actually its the bank manager's discretion to give a POS or not.

Regarding the money withdrawal, using POS with Credit cards; its not so widely prevalent as you claim it to be. Even if it is, and if you know such places, as a responsible law abiding citizen, you should actually report such places, these small so called "law abiding shops" are actually laundering money this way, he will have money in his account and he pays using accumulated black wealth and he makes a profit as well on it, what a nice business plan!

Pramod

[volkman10]

Amul's take on demonetization and the 'rule changes' associated with it!

[sgiitk]

@binanand; I agree 100%. What is often being used is an excuse, to hide the basic fact that they will have to report their transactions. Hence they will have to pay more taxes, and also risk opening of old returns. I hear that the Kanpur Kirana merchants went in for swipe cards (business was really down) and are now again demanding the folding stuff.

[sachinpk]

Originally Posted by GrammarNazi

Why? On 30th March, 2016, when I wanted to apply for a 2nd Current Account & card swiping machine, this is the response I had gotten from Canara Bank (where my family had savings account since 30 years).

Pardon my ignorance. My understanding is that Current accounts are opened by business houses (how ever small). And looks like you already had a current account. Was it in Canara Bank? Or was it at a different bank? If at a different bank, you could have approached them for a POS? And I feel Savings bank account (especially by family members) may not be a justification to ask for a current account or POS. Because a business entity is different from a family entity.

Even PayTM had this problem; that for vendors they expected them to have current accounts (to which they would link PayTM). Don't know how they overcame this problem. My friendly medical show chap has given me a credit line. Buy all medicines pay him, when ever I have money or when he gets the POS; which ever happens first. And he readily admitted that 8 months back the banks had approached him with a good offer for a POS to be installed. He refused then . The local bar & wine shop fellow did not refuse; he now has got even more business. Today when the medical shop chappie is trying to get POS, he is in a long queue.

I refused to bow to such unfair rules and they did not budge. Imagine, banks, on record, refusing business that'll earn them deposits.

A story from the other side. I had to change the wheel caps of my vehicle. Approached a shop who deals with wheel caps and seat upholstery. Chappie's friend had a mobile shop running next door. The amount was around Rs.1200 odd, and I asked him whether he accepts cards. With a smug (and an attitude of take it or leave it), he said he only accepts "cash payments" how much low or high the charges were. I asked him to see if the next door mobile shop can help me. He said they also don't accept cards as a matter of principle. I walked to the ATM 500ms away, and withdrew money and paid up. I cross the shops twice a day; the mobile shop has shut down right since November 10th. The upholstery shop seems to have unsteady business, saw it open for around 8-9 days all this while. To be frank; I really doubt what kind of "business" they were doing having this upholstery and mobile business as "fronts". To sum it up; if businessmen have to be made to pay their tax dues completely, there has to be proper electronic trails. I mean "electronic", because that would be only thing which cannot be forced/cajoled to look the other way. If these machines can be bribed, rest assured that option would be utilised by our traders.

Originally Posted by binand

Usually, if you spend Rs. 100 on a credit card, the merchant receives about Rs. 98. The remaining Rs. 2 is the fees charged by all the players involved - the acquiring bank, the issuing bank, an aggregator if any, and the network (Visa/Mastercard etc.).

Originally Posted by binand

The idea is to treat this 2% as a cost of doing business.

A friend of mine is a small time business man. And his explanation seemed to be reasonable. The banks tell him that, the service charge is taken from him because the credit card helped him get more business . He deals with computers where the minimum price would be around Rs.10,000. No body generally walks around with so much cash. So if some one comes to his shop, find out the price is Rs.10,000 that person may just walk off. The moment he leaves the shop, he may get better ideas on spending Rs.10,000 and may not even come back. Now think about credit card? He gets a "loan" instantly, and he can make that purchase and go home. My friend, has got a sale of Rs.10,000 at once. Now 2% on that amount is not very high, right?

Originally Posted by pramodkumar

Regarding prerequisites for getting a POS machine, actually there is none, my friend got a POS machine from SBI branch the moment they decided to move their current account into SBI, the rentals were waived off for one whole year, so actually its the bank manager's discretion to give a POS or not.

At present all banks have a long queue of business men asking for POS machines. Which itself is a kind of proof to say that businessmen have taken a hit and now are okay to have a POS machine at their shops. 8-10 months back in my area, PSU banks were going from one shop to another encouraging them to have a POS machine at the shop. None of them (except a bar & wine shop) wanted it then. Now these folks lose revenue, or have to give credit to all and sundry hoping that those good souls would pay up.

[pramodkumar]

Originally Posted by sachinpk

At present all banks have a long queue of business men asking for POS machines. Which itself is a kind of proof to say that businessmen have taken a hit and now are okay to have a POS machine at their shops. 8-10 months back in my area, PSU banks were going from one shop to another encouraging them to have a POS machine at the shop. None of them (except a bar & wine shop) wanted it then. Now these folks lose revenue, or have to give credit to all and sundry hoping that those good souls would pay up.

You did not understand the point here, I question was to ecenandu who wanted to know why GrammarNazi is ranting over the rules set by the banks, to that my response was, that these are "newer" rules which the banks have come up with to cover up the shortage of POS terminals, your comment above kind of supports my view. Now when the government is doing its best(or at least saying its doing its best) to make India a digital cashless economy, is it right that a business should get pinched just because the bank manager gives some wild excuses such as scrutiny of current account transactions?

The same bank managers as per you are providing POS machines to big shots like wine and beer shops and the likes, isn't this the very own selective favourism evil the government trying to fight by this whole exercise?

Some facts, I would say the situation is fine in Kerala or atleast tvm where we have options of going to bigger retailers or shops that accept other mode of payments, I was in Delhi last week and there were atlest 2 instances where I felt the banks are coming up with their own unique set of rules.

I went to the Khan market branch of BOI, I had 4 X 2000 rupee notes and I needed change as no one was accepting those, even cab drivers. I stood in the line, it was 10:05 AM, the bank security said as per their watch its not yet 10.

I along with a lot of others waited for good 15 minutes, finally the cash arrived after we stood in the queue for 15 more minutes, it was announced that there would be rationing, each guy with a cheque had to go to at least 3 different windows before they get the money and finally when my turn came he sad he will only give me change for 2k and not for more, I was fine, but is there are rule that change should not be given? These are few things that make people's whole experience bitter and this is what his rant was about, in case you didn't understand that correctly.

Pramod

[sachinpk]

Originally Posted by pramodkumar

Now when the government is doing its best(or at least saying its doing its best) to make India a digital cashless economy, is it right that a business should get pinched just because the bank manager gives some wild excuses such as scrutiny of current account transactions?

The excuse seems to be a typical Canara bank-ese response, and I do take your point. But if the standing orders are that the current account history needs to be checked at the bank side, then the bank manager is just following the things written on the standing order. But if yes, he was indeed just making up an excuse it was bad. And after seeing the connivance of bank officials by which Rs.2000 notes were given to few people by the truck loads, I don't have much hopes on their honesty as well. It may be their system which is bringing in some transperency in the whole thing.

The same bank managers as per you are providing POS machines to big shots like wine and beer shops and the likes, isn't this the very own selective favourism evil the government trying to fight by this whole exercise?

They *were* providing this nearly 8 months back. The bar & wine shop chappie got it, for what ever reasons he had. The other shop keepers in my area did not even think of ever having to swicth over from the cash based model. They were still enjoying counting their cash in the cash box. Now that the tables have turned, they are running to the same old banks. But by now the banks have huge back logs for supplying POS. And perhaps if the same momentum is maintained, more shop keepers would be opt for POS. And that gives me a feeling that the cash withdrawal limits would still not be totally removed.

when my turn came he sad he will only give me change for 2k and not for more, I was fine, but is there are rule that change should not be given?

The rule is that any one who asks for Rs.24,000 has to be given the money. This is what I understand. My wife works in a PSU bank, and they also follow this rule strictly. But there is a catch. I present a cheque for Rs.24,000; I would be given the amount in 12 Rs.2000 brand new notes. The RBI order says Rs.24,000 has to be given for who ever asks for it. It does not explicitly say that it has to be in the denomination the person asks for . Now if I am not happy with the Rs.2000 notes, then I have to negotiate with the bank. And then it is pure negotiation. If I am willing to take say Rs.10000, I get the amount is Rs.500 notes. If I ask for Rs. 6000, I can choose the denominations . I also cannot blame the bank here, as they also have to service a lot of customers. And the banks did not come up with demonitisation drive, so there is no point in blaming them as well. But at least in my wife's branch people have been very cooperative (among themselves & with the bank staff as well).

[pramodkumar]

Originally Posted by sachinpk

The rule is that any one who asks for Rs.24,000 has to be given the money. This is what I understand. My wife works in a PSU bank, and they also follow this rule strictly.

Banks are not following it, my comment is not based on hearsay, I personally went to the bank in Delhi and found this out.

Originally Posted by sachinpk

Now if I am not happy with the Rs.2000 notes, then I have to negotiate with the bank. And then it is pure negotiation. If I am willing to take say Rs.10000, I get the amount is Rs.500 notes. If I ask for Rs. 6000, I can choose the denominations .

Isn't that plain wrong? I mean, I have some expenses, like I have to travel across delhi and my cab fare doesn't cross 400 per trip(I know paytm is an option, but I don't like to be forced to use a particular option) and I do need change, why should the bank deny it just because I have weaker negotiation skills?

I strongly feel this "face some hardship for greater good" has been stretched too far and everyone who now wants to give an excuse has one, most Public sector banks are not providing any sort of unsecured loans, HDFC and Axis bank are the only banks in Trivandrum which has provided loans (that I know of) rest all banks are blaming it on demonetization.

Originally Posted by sachinpk

I also cannot blame the bank here, as they also have to service a lot of customers. And the banks did not come up with demonitisation drive, so there is no point in blaming them as well. But at least in my wife's branch people have been very cooperative (among themselves & with the bank staff as well).

The bank staff are arrogant in every public sector bank that I have dealt with, they don't care about the customers, its the first time in the history of the country that they were asked to work on a war footing, else its nothing exemplary to any other profession in the world, there are other jobs that we often ignore that usually play a more vital role. State bank always used to have issues with their servers in the first few days of the month, most ATMS would be out of cash (this is well before demonetization), there were many instances where I had to return stuff at shops since the transaction used to get timed out, there are reasons why people were apprehensive on how this whole thing would work, if there is no cash. I know people (infact a lot) who have horror stories of going through hell to save that .25% in interest by opting State bank home loan, my wife's office mate was called to come and meet the valuer for the next stage of fund release of their home loan, the reason; well you could never guess, just to verify if the person is alive, all this after this guy's wife being a manager in one of the local SBT branch.

End of Rant..

I think customers should demand in writing the reason for delay/denial of POS machines.

Pramod

[binand]

Originally Posted by pramodkumar

I mean, I have some expenses, like I have to travel across delhi and my cab fare doesn't cross 400 per trip(I know paytm is an option, but I don't like to be forced to use a particular option)

I'm not sure if that is the right attitude. If you have a means of payment that you know will suit your purpose, then why do you have to insist on another method? That sounds like unnecessarily trouble-mongering to me.

[narayans80]

Originally Posted by sachinpk

My friend, has got a sale of Rs.10,000 at once. Now 2% on that amount is not very high, right?

From an user perspective, card payments aren't a problem if the amount is high. If the amount has been 100 and above, they've always been taken. Except those who didn't have a POS machine. This is from pre-demonetization days.

I've seen the trend in Europe and US as well. Small businesses are reluctant to take card payments for amounts < 10 or 20 EUR/USD.