We had issued earlier Circular No. 48/2016-17 regarding the same subject. Now we felt that additional information is to be conveyed to the branches. Hence keeping in mind to provide all guidelines in one place to avoid confusion we are issuing this Revised Circular covering all existing and additional guidelines.



Merchant POS refers to Merchant Processing Services, which enable a business to accept a transaction payment through a secure (encrypted) channel using the customer’s credit card or debit card or NFC / RFID enabled device. Merchant POS will help the merchant accept all cards: RuPay, VISA, VISA ELECTRON, MASTERCARD and MAESTRO issued globally. For this, the Merchant needs to procure POS machines (from the Bank). The android will be installed at the Store / Merchant’s place of business or location and will provide Instantaneous Card Validation, Charge Slip Generation, and Finally Electronic Settlement at the End of Day. Payment of these transactions will be made via a credit to a predetermined Bank Account on the next working day.

How it works

To facilitate digital transactions, the Merchant has to set payment infrastructure like POS machines and they have to start a unique ‘Merchant Account’ with a Bank to avail payments from the Customers. As the Bank provides payment services, the Merchant has to give a payment to the Bank for using the payment infrastructure set up by the Bank. This payment is called Merchant Discount Rate (MDR).


Merchant customers after selecting the type of POS machine of their choice, they have to select the mode of payment for the purpose of procurement of the machine. There are two types of payment systems for procurement of machines.

(i)   One Time Cost & Monthly Rentals
(ii)  Monthly Commercials Charges
(iii) Free POS machine
(iv)  Monthly service charges

Support Material

Necessary stationery including EDC rolls and promotion materials like pamphlets,glow sign and stickers stating acceptance of credit cards shall be provided and stocks of the same shall be replenished promptly as and when required. Sarvatra will facilitate this via ICICI.


An Android point of sale (POS) system is essentially a wireless, portable cash register for smartphones and tablets with an Android Operating System. An Android mPOS eliminates the need for a clunky cash register and can carry out all of the functions of a traditional POS terminal plus more.

Benefits to Bank

  • Moving fast towards Digital India.
  • New Current Accounts will be opened in the Bank by Merchants.
  • New Customer Acquisition: Increased transactions lead to more references for new accounts, which will generate more business for the Banks in the long run.
  • Reduced attrition of Customers.
  • Banks can utilize the Merchant float.
  • Continuous flow of funds in accounts helps in increasing the CASA balance of Banks.
  • 2% discount benefit on GST as per the announcement from the Government of India.
  • Visibility at Merchant locations leads to marketing for the Banks.

Procurement Cost for Android Type

There are 3 types of payment mode for procurement cost of machine under GPRS type, which are as under.

Customers have to select any one mode of payment and request the branch through a letter specifically for this purpose.

(a) One Time Cost & Monthly Rentals

If the Customer wants to purchase the machine by investing one time cost at the beginning and to avail the benefit of low monthly rental payment can opt this type of payment for procurement of Android pos machine.

One Time Cost Rs. 11000 + Service Tax
Installation Charges Rs. 1500 + S.T.
QR Code on Same device (one time) Non Refundable Rs. 1000 + S.T
Monthly Rent Rs. 300 + S.T

(b) Monthly Commercial Charges

If the customer wants to maintain a large amount in his Current account, he can opt for this type of payment for procurement of machines since it has no one time cost & installation charges and monthly rental charges are in reduced slabs as mentioned here below.

Current  Account  Balance

Commercial Charges
Rs. 25000   –  50000/- Rs. 500 + ST
Rs. 50001   –  75000/- Rs.400  + ST
Rs. 75001   –  100000/- Rs. 300 + S.T
Above   Rs.   100000/- NILL

(c) Free POS machine

If he maintains an One lakh average amount in his celebration Current account, he can get a free pos machine for procurement but if he wants QR Code on Same device he has to pay 1000 + GST (one time) Non Refundable.

(d) Monthly service charges

If the customer maintains an fifty thousand average amount in his freedom Current account, he can get a free pos machine and he has to pay monthly service charges. If he wants QR Code on Same device he has to pay 1000 + GST (one time) Non Refundable.

Important Points for Merchants

  1. Settle / Close the transaction batch every day before 10.30 pm to avoid delay in receiving payments.
  2. Keep Receipts/Charge slip for Thirteen months from the transaction date to avoid Chargeback.

Transaction Charges

Transaction charges are to be borne by the merchant. After deducting transaction charges from the bill amount of his customer. The net amount will be credited to the Merchant’s Current Account maintained with our Bank. Transaction charges are as under.
MDR: Below table shows the percentage of Transaction Value that the Merchant needs to pay to the Acquirer Bank.
No Parameter  % of Transaction Value
1 Debit card transaction
  • If the Business is less than 20 lakhs then 0.4% transaction.
  • If Business is more than 20 lacs then 0.9% transaction.
2 Consumer Credit Card 1.40%
3 Premium Credit Card 2%
4 Super Premium Credit Card 2.50%

Note :

For further clarifications Branches may contact the following officials to overcome the issues :
Issues Name of the Officials Cell Number
Any other Clarifications about the product & Operational issues Mr. Devaraj, Merchant Banking Dept. at HO                         99016 32050