With Reliance’s Foray, India To Have 5 Mn Digitised Kirana Stores By 2023: Report

The entry of Reliance in the merchant’s point-of-sale (POS) space can raise the count of digitised Kirana stores from the current 15K to over five million stores by 2023, a study by the Bank of America Merrill Lynch suggests.

In January, Reliance was reported to be foraying into the point-of-sale (PoS) devices space and launched pilots with merchants in Mumbai, Delhi, Bengaluru, Hyderabad, Chennai and Pune. The retail sector in India is undergoing a transformation with Kirana stores keen on adopting technology for merchant points-of-sale (MPoS).

“The current one-time price point of INR 50K limits the market to Class A/B stores (turnover of INR 900K /month). We believe that with the Reliance’s entry, we could see an increase in merchant adaptability, as the price points will likely come down (Reliance’s current one-time deposit is INR 3K) and reach should expand,” the study noted.

Some of the notable PoS device providers are Ezetap, Mswipe, Pine Labs, Innoviti, Mosambee, Payswiff (earlier known as Paynear), among others. Paytm Mall also forayed into this space last year by tying up with Chinese electronics maker Xiaomi. Companies such as SnapBizz, Nukkad Shops and GoFrugal are also playing a key role in the digitisation of kirana stores in India.

“Kirana stores liked the ease of billing/generating GST complaint bills the best. The PoS device provides an option of adding in-built discounts and also push offers to entire customer database via SMS,” the research added.

Reliance Merchant PoS Plans

Reliance was said to be partnering with the largest FMCG brand Hindustan Unilever for acquiring merchants, which goes to show Reliance’s plans for deeper penetration in the country.

To get hold of the Reliance’s PoS device, merchants will have to deposit $42.58 (INR 3K). Further, for all debit and credit card transactions through the device up to the worth of $28.39 (INR 2K), the cost paid by the merchant to a bank will be zero.

India’s Market For PoS

India’s market for PoS devices is expected to cross $3 Bn by 2024. Further, according to Inc42 DataLabs, total funding of $406 Mn has been raised by Indian digital POS terminal startups till 2018.

Earlier this March, Google Pay also piloted a project to offer payment alternatives to customers of Kirana stores in India. Another major fintech player Paytm is reportedly working to enable physical PoS devices for its merchants. Also, Gurugram-based PayUMoney has launched its PoS business devices with no monthly rental, no minimum balance criterion, and an option to link to any bank account. Further, Payswiff (earlier Paynear) had also introduced a PoS device.

In July, Flipkart’s digital payment subsidiary PhonePe has acquired Zopper Retail, a hyperlocal POS platform for small and medium businesses.