Consumers would be able to make cash-back withdrawals from certain prepaid card accounts at the point of sale under a proposal the Reserve Bank of India is considering.
“There are active discussions to allow [consumers with] open-loop cards to withdraw cash from POS terminals,” a central bank spokesperson tells PaymentsSource. “There are issues like the fees and interconnectivity that still need to be worked out.”
Open-loop cards generally are accepted by merchants nationally or internationally, and banks usually issue them. Nonbanking institutions in India generally issue closed-loop cards, and acceptance generally is limited.
Indian merchants deploy some 4.7 million payment terminals, the central bank says.
In July, the bank ruled that consumers with debit cards issued by Indian financial institutions could withdraw up to 1,000 rupees (US$21 or 15 euros) in cash back at the point of sale (see story). The ruling came amid other efforts by the Reserve Bank of India to make it easier for consumers to access cash, including from ATMs in rural areas.