RBI Pulls Back on Biometric POS Mandate, Launches Prepaid Cashout Pilot (May 15, 2014)
In what may be a bid to resume the rapid expansion of payment card acceptance terminals in India, the central bank has pulled back on a mandate requiring new POS and ATM terminals to include biometric authentication, the Economic Times India reported recently. The mandate had been in place to support financial-inclusion efforts around Aadhaar biometric citizen IDs combined with payment capabilities. As of March 2014, POS terminals numbered 1.07 million in India, up 25 percent from 854,290 terminals in March 2013.
At the same time it suspended the biometric mandate, the RBI said it would enable prepaid providers, for the first time, to offer cashout at POS terminals with biometric capabilities. Nearly 20 prepaid issuers had been lobbying for a cashout feature, including airtel money, ItzCash, M-Pesa and Money Card, according to the report.
The cashout feature could make prepaid cards more attractive to Indian consumers, who still rely heavily on cash for transactions. Despite increases in electronic payments and acceptance points, the RBI estimates that 90 percent of all transactions are made in cash.
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