Cash Withdrawals At POS Terminals Using Card/UPI Questions Answered

On Tuesday, the Reserve Bank of India (RBI) released a notification on Frequently Asked Questions (FAQs) on cash withdrawal facility at point of sale (PoS) terminals. The facility allows a bank account holder to walk into a shop and withdraw money via the merchant's POS machine using his/her debit card or UPI.

This option has been around for nearly a decade and was permitted as ATM branch network did not have as wider a reach as merchant outlets. Many Indian banks provide this service.

Amid the coronavirus related lockdown, RBI released an update on FAQs on POS cash withdrawal facility.

It also allows for withdrawals using UPI.

Here is a summary:

Types of cards/mediums that can be used to withdraw cash at PoS terminals

• Debit cards and open system prepaid cards issued by Indian banks.
• You can also use UPI (Unified Payments Interface) or electronic cards linked with overdraft facility provided on Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts.
• Credit cards cannot be used under this facility.

Withdrawal limit

• Rs 2,000 per day per card in Tier III to VI centres
• Rs 1,000 per day per card in Tier I and II centres

Charges

Charges, if any, levied on cash withdrawals shall not exceed 1 percent of the transaction amount.

Is this facility available at all merchant establishments? How will I know if the facility is available at a particular merchant PoS?

No. The facility is made available at merchant establishments designated by the acquirer banks (i.e. the banks that deploy the PoS terminals) after a process of due diligence. The designated merchant establishments have to clearly indicate/display the availability of this facility along with the charges, if any, payable by the customer.

Is it allowed to withdraw cash from a POS terminal deployed by other banks (i.e. banks other than my card issuer)?

Yes. Under this facility, cash can be withdrawn from PoS terminals at designated merchant establishments, irrespective of the fact whether the card issuer and the acquiring bank are same or not.

Are you required to purchase some goods/service from the merchant establishment to avail this facility?

No. The facility is available irrespective of whether the cardholder makes a purchase or not.

Will a receipt be provided for the cash withdrawn at PoS terminal?

Yes. The merchant is required to provide a printed receipt generated by the PoS terminal. In case the facility is availed along with the purchase of merchandise, the receipt generated shall separately indicate the amount of cash withdrawn.

Where can you lodge a grievance in respect of this facility?

First, lodge the grievance with your card issuer (your bank). In case the card issuer does not respond within the stipulated time, or the reply so received is not satisfactory, the cardholder can lodge a complaint under the Banking Ombudsman Scheme.

RBI had launched an Ombudsman for Digital Transactions in 2019. You can file a complain online by emailing to the Ombudsman for Digital Transactions in the jurisdiction of the bank branch from the list of the offices and email IDs on RBI's website.