Car dealers move from electronic to mobile PoS devices to avoid charges
New Delhi: Faced with high rental charges of stand-alone point-of sale (PoS) devices, a large number of car service centres and dealers are moving to cost-effective card payment solutions, most of which are mobile phone-based.
“Most of the car service dealers set up their stalls in some fairs, exhibitions or corporate offices where most of the bookings are done with some initial payment by customers. Mobile point of sale (mPoS) serves as an effective alternative to traditional PoS for these dealers as it is cost-effective and easily portable,” said Eniyan Narayanaswamy, chief product officer, Bijlipay, a digital payment solutions company.
An mPoS is a smartphone, tablet or a wireless device which performs the same function as that of an electronic PoS terminal. Under mPoS, the car dealer has to download a mobile application and attach it to a card reader to carry out transactions.
“The mPOS device is inexpensive as it is just a simple card reader and the entire processing is done using the mobile phone’s processor and data connection,” added Narayanaswamy.
According to Vaibhav Lodha, co-founder, ftcash, a payments company that facilitates digital payments for small and medium merchants using mobile phones, there has been 40% month-on-month growth in demand for facilitating cashless payments from car service centres since demonetisation in November.
ftcash claims that over 500 service centres across the country use its technology to receive payments with just a bank account and feature phone.
“We enable service centres to raise a digital invoice where an email and/or SMS are sent out to customers, including a payment link with the prefilled values of invoice number and amount. The customer can choose to make a payment from his credit/debit cards, wallets, UPI or net banking without visiting the outlet,” said Lodha.
The service centre and the service advisor get a confirmation the moment the payment is completed and the car is delivered to the customer. This allows the car to be picked and dropped even if the customer is busy in a meeting or is not available at his home/office to make a payment, he added.
“With the use of such a technology, my cost of service has gone down as I do not need to send a representative every time to the customers’ house or office for payment recovery. I can easily send a link to the customer and get my payment done on real time,” said Anthony D’Silva, owner, Shalon Car Services, located in central Powai, Mumbai.
Even though the company still uses stand-alone PoS machines, it’s not possible to carry one to every customer’s place. Also, giving the payer a greater variety of options to choose from while making cashless payments is important, D’Silva added.
High rentals on PoS machines were the primary reason why Amandeep Singh, senior accounts executive at Frontier Volkswagen Centre located in Delhi, shifted to ftcash.
“90% of our customers prefer to pay through digital modes that too debit/credit cards, this was an economical alternative as compared to the interest that I had to pay for a stand-alone PoS machine,” he said.
The transaction value differs from as low as Rs500 for car servicing and repairs to even Rs100,000 in case of car purchase, he added.
According to Reserve Bank of India (RBI) data, debit and credit card usage in April at PoS machines was around 221.5 million transactions.
Promotion of digital transactions has become a priority of the government in the aftermath of demonetisation, which triggered a nationwide cash crunch.