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POS Systems For Small Business – How To Apply, Benefits & Documents Required

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pos terminal for small business

Give your business a professional touch by installing POS (Point of sale) terminals. Now a days almost every bank offers POS terminals that suits your business needs which enables your customer to use their debit and credit card anywhere especially when they run out of cash.

Post demonetization of Rs.500 and Rs.1000 notes, Indian banks has started a special campaign on Pos by waiving all monthly rental charges on any Pos machine. It is a good time for any merchant who wants to avail Pos machine because this campaign is valid till 31st march 2017.

Types of POS Systems

  • Counter top terminal (Wired EDC machine)- Counter top terminals are designed for retails shops or business it has large graphic display with backlit keypad and lateral keys.
  • Portable terminals (Wireless EDC machine) – Portal terminals feature GPRS technology which can be carried anywhere and customer need not have to be present in the counter to enter their PIN. Portal terminal is particularly useful in hospitality sector or home delivery service.
  • M-Pos (Mobile Point of Sale) – M-Pos system are portable hardware which process payment by connecting to smart phone or tablets.
  • PSTN (landline based)
  • QR code (Application Based)

Charges and Commission Applicable for POS Machine

Charges depends from bank to bank. Some banks do not charge installation charges and some bank charges only minimum Pos terminal fee for wired EDC. There is basic monthly rent + service tax on Portable terminal if you choose private banks like HDFC, ICICI. Charges depend on turnover through cards. Minimum turnover or swiping value for some bank is 25000 or 50000 per month. If you fail to reach minimum value you will be charged some amount around 150 to 250 (depends on bank terms and condition). Post demonetization Government has waivedcommission on debit card transaction up to Rs.1000 till 31st march 2017. Before it was 0.75% on transaction up to 2000 and 1% on transaction more than 2000. However, there is no charges on credit card payments.

How to Apply For POS Machine

It is a simple process you have to fill up the enrollment form and enter in into an agreement with bank. Your application has to be processed through the bank branch where you have your current account.

Eligibility for POS Machine

All banks norms are not same in respect of merchant eligibility for POS terminals, but some common point has been collected here which a merchant should meet before applying for POS machine.

  • Merchant should be holding current account with the bank with satisfactory account operations.
  • Merchant should be in retail trade and should not be on Master/visa card negative list of malpractices.
  • Turnover of the merchant through their card should be more than 50000 per month (May vary on different banks)
  • It is mandatory to have fixed land line connection for wired EDC terminal (counter top terminal) otherwise you have to apply for portal terminal (GPRSEDC).
  • Business must be in existence for at least 6 months or more.

Documentation required

Though every bank may require same or different documents, but mention below are some common document which you may have to submit for Pos machine.

  • Merchant application form
  • Business establish proof
  • Identity proof
  • Address proof

Business Establish Proof – You have to submit any two of the following documents from the list.

  • Current Shop and establishment registration certificate
  • Sales tax registration certificate
  • If your firm is partnership based then partnership agreement is required
  • Vat registration certificate
  • Current telephone or electric bill
  • COL (Certificate of incorporation)
  • Rent or Lease agreement
  • Trade license (If petroleum product)

Financial Details – You may to provide Financial details of your current account which is

  • ITR (Income Tax Return), and
  • Bank statement of last 6 month

Identity proof – You need to provide copy of any two of the following ID proof list.

  • Valid passport
  • Voter Identity
  • PAN Card
  • Valid Driving License
  • Letter from Existing Bank verifying name, address and signature on bank letterhead

Address Proof – For address proof you may to submit any two of the following:

  • Latest copy of Electricity bill or Telephone Bill
  • Letter from Existing Bank verifying name, address and signature on bank letterhead
  • Certificate issued by Govt. Local bodies confirming address of the applicant

Note: Please contact your bank for more details on POS terminals.

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