Paytm announced on Tuesday that NFC-enabled Android smartphones are becoming POS devices as it aims to attract more merchants in one of the world’s largest markets for mobile payments.
A Paytm merchant partner can now activate the card acceptance function via their Paytm business app. Once activated, they can process a transaction by tapping a plastic card on their phone.
Paytm Smart POS supports Visa, Mastercard and Rupeek, according to the Indian startup.
Existing payment devices in the market have not proven very successful in reaching small and medium-sized businesses in India, most of which remain offline, Vijay Shekhar Sharma, Founder and Managing Director of Paytm, told a virtual press conference today.
To attract these merchants, in recent years Paytm has introduced QR codes that work across multiple payment networks, and introduced jukeboxes and other devices to make it easier for merchants to accept payments digitally.
With today’s move, Sharma said, “there is no longer an obligation to purchase a point-of-sale machine as well.” The startup said that most of the new Android smartphone models support the NFC function.
Paytm also presented the new generation jukebox POS, which is similar to a QR poster. “The reason merchants have not actively adopted many of the existing POS machines is because they are unfamiliar with them,” said Dilip Asbe, head of the NPCI, at the virtual conference.
The Indian startup, which processed more than 1.2 billion transactions last month, will charge merchant partners a small subscription fee to access any of the above payment services.
The move in which Paytm competes in many ways against Sequoia Capital-backed Pine Labs, a leader in the POS category but a much smaller startup, shows how aggressively Paytm is expanding its payments platform to track merchants.
“As cell phones have seen a move from feature phones to smartphones, we believe that the retailer PoS market in India is at a turning point to move from traditional (aka dumb PoS) to smart PoS. Unlike traditional PoS, which only allows debit / credit card transactions, some of the features of a Smart PoS are: GST compliant invoice, scanner / printer, accepts all payments including UPI, is bluetooth enabled and can be customized for different merchants will be according to their needs. While the fintech companies are currently offering these devices, we expect the banks to catch up at some point, ”Bank of America analysts wrote in a recent statement to customers.