India's Digital Payments Industry Faces PoS Terminal Shortage Amid Global Supply Issues
PoS pause pinches India’s payments industry as global turmoil hampers imports
The Economic TimesImage: The Economic Times
India's digital payments sector is experiencing a shortage of point-of-sale (PoS) terminals due to geopolitical tensions in West Asia and supply chain disruptions in China. With demand rising for advanced payment processing, prices for terminals have surged by 15-20%, impacting business margins for payment firms.
- 01India's PoS terminal supply is heavily reliant on imports, making it vulnerable to global disruptions.
- 02Demand for PoS terminals has increased significantly, with 70% of transactions now using UPI.
- 03Prices for PoS devices have risen by 15-20%, affecting payment firms' margins.
- 04Major deployers are extending terminal lifecycles due to supply constraints.
- 05RBL Bank's new PoS terminal deployments surged 24% in FY25, but growth may stabilize in FY26.
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India's digital payments ecosystem is grappling with a shortage of point-of-sale (PoS) terminals, primarily due to geopolitical tensions in West Asia and supply chain disruptions linked to memory chip production in China. As nearly all PoS terminals in India are imported, this reliance has made the local supply vulnerable. Demand for PoS terminals has surged as merchants upgrade to devices that support mobile payments, tap-and-pay, and chip-and-pin transactions. Amrish Rau, CEO of Pine Labs, reported a backlog of nearly 200,000 deployments, with 70% of PoS transactions now processed through the Unified Payments Interface (UPI). However, the prices of these devices have risen by 15-20%, increasing from around ₹8,500 to over ₹10,000, which is squeezing the margins for payment firms. Major deployers like Innoviti Payments are now extending the lifecycle of existing terminals rather than replacing them due to these rising costs and supply shortages. Despite a 24% increase in new PoS terminal deployments in FY25, driven by RBL Bank, growth is expected to stabilize in FY26.
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The shortage and rising costs of PoS terminals could lead to delays in payment processing for merchants, affecting their ability to serve customers efficiently.
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