Two years ago, RBI issued a guideline under which any transaction at the POS terminal at a retail outlet would require the user's ATM PIN. The move, introduced to strike out fraudulent activities around card payments, came as a surprise to the retailers,
As we gear up for a change in the ecosystem, with brick-and-mortar getting more tech savvy and everyone joining the eCommerce bandwagon, the matter of fact is, the retailers are not affected by the RBI guideline and business goes on as usual.
However, initially retailers were hesitant to accept it on the following grounds: the time taken by the user handling a card at the counter, therefore queues building up, what if unable to validate due to a machine or connection error, this could lead to increase in waiting time of the shoppers, also, at retailers’ end, bandwidth issues, losing of a certain customer because of non-validation etc were the general concerns.
Security measures for Customers
All those concerns are in the past now. Retailers as well as shoppers have taken it in their stride. Talking to one big retailer who doesn’t want himself named, the answer came in as a big surprise, “Who cares about the PIN today. All everyone cares about is, how to make sure the customer doesn’t have to wait to make that purchase. We cannot lose the customers, with the PIN or without.” What’s interesting today in terms of POS (point-of-sale) technology and retail is the relationship that they share. While the organised side of retail is well-versed with this advent of technology, the unorganised side is starting to catch up.
The irony? Well, the latter forms the better part of the business, if not in an organised way. Bhaskar Venkatraman, Founder of JusTransact, a company that believes in educating people about the problem in the Point-of-sale (POS) and boasts of an exclusive eCommerce portal for POS, stifled a laughter, “I can never think of a customer who is carrying his card and doesn’t remember the PIN number. I am a CC/DC user, and the numbers for all my three cards I have saved in my mobile phone. I would never think a retailer would stand a chance to lose his business due to the inclusion of a PIN in cards.” Largely, although, it could be done keeping in mind the incidence of fraudulent transactions that can take place with one’s card, and it is a welcome move which all the retailers will agree with, what about a situation where the customer visits a shop sans any cash.
Vikrant Batra, Owner, Cafe Delhi Heights & Cafe Terminus1, had to let go of some of his customers because of that. “For me, personally, people using cards (debit/credit) with a pin do make things comparatively more difficult for the retailers in several ways. The sales suffer due to payment delays when the pins don't work or when the customers enter incorrect pins multiple times. It is not just time consuming, but in case the customer has no cash, which has happened with us on a lot of occasions, it presents a threat of losing out on the customer.” A lot of customers, too, rely on having a card handy than amassing cash in their pockets when out to purchase something expensive. Gone are the days when shoppers used to tuck rolls of money into their pockets to make a purchase.
Sometimes, the amount is debited from the customer's account, but does not get credited into the retail accounts. And then, he says, “Waiting time increases for others trying to execute their buy. As it is, the wi-fi and other connection services in India aren't exceptionally good and create a hassle in execution of the payment.”
As for the banks, they believe that it is done to improve the level of security around card money which is vulnerable to cloning and skimming. Banks such as Kotak Mahindra, Citibank, ICICI, HDFC etc all have introduced this feature since a long time. “It is not done to affect transactions at any retail store, but to safeguard the plastic money, as security and risk mitigation measures,” according to State Bank of India spokesperson.
It is clear that although the pin in the card works at the POS counter in just the same way as any card works at the ATM machine – what if the transaction gets declined after three incorrect attempts – wouldn’t it hurt a retailer’s pocket in terms of a lost transaction.
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