It is 7 PM, and Jijeesh V has no time to chat. The wiry owner of Brothers Store, a kirana store in Indira Nagar, Bengaluru, sees 500 customers walk into his store every day. There are anywhere between 12-14 million such shops across India, together accounting for over 90% of food and grocery retail in the country. The ones in larger cities, such as Brothers, make around Rs 4-12 lakhs ($5,700-$17,000) in revenue each month.

About 85% of Jijeesh’s customers pay in cash. The others pay through debit/credit cards or digital wallets like Paytm* or PhonePe. At Brothers, card payments are being swiped through a new kind of PoS (Point of Sale) terminal.

For now, Jijeesh’s sole reason for using the new PoS is that he doesn’t have to pay the merchant discount rate (MDR), a sort of “card tax”, on every transaction. MDR is essentially a charge levied by banks on PoS transactions—roughly 1% share of every transaction.  MDR, in fact, is the reason Jijeesh had long stayed away from using PoS machines; he had come round to the idea of using PoS machines to accept card payments as recently as two years ago. So, imagine his surprise when a company told him he could have a PoS device and pay no MDR on it for transactions upto Rs 2000 on both debit and credit cards. 

In 2017, the Indian government, to promote digital payments, mandated that banks not charge any MDR for transactions below Rs 2,000 on debit cards, until the end of 2019. Instead, the government would pick up the tab. That is, of course, until India’s largest private company, Reliance Industries, turned its disruptive gaze to the last mile of retail. And like they did with telecom, the rollout is happening in the guise of a “pilot”.

In a country that took two decades to supply three million PoS terminals, Reliance Jio plans to roll out 150,000 PoS machines or 5% of the current PoS base, within the first six months of 2019, according to a senior Jio executive. “This is a pilot,” he reiterates, in true Reliance style. Eventually, the plan is to get Jio’s PoS devices into each of the millions of kirana stores that dot India’s landscape.

To say that Reliance’s “pilots” are disruptive would be an understatement. When it launched India’s youngest telecom network, Jio, in 2016, customers only had to go and get themselves a SIM. No need to even buy recharge. And from there on the offers continued to flow non-stop, eventually bringing Jio neck-and-neck with India’s number one telco, Bharti Airtel.

Jio’s PoS play promises to be an encore.


Arundhati Ramanathan

Arundhati is Bengaluru-based. She is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She has spent over 10 years reporting and writing on various subjects. Previous stints were at Mint, Outlook Business and Reuters.

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