Know What is POS Limit

13 January, 2023

The onset of the digital era has also transformed the way people shop. Today more and more businesses and merchant establishments are opting for Point of Sale (POS) systems instead of traditional cash registers. POS systems have enabled business owners to optimise the checkout process and execute payments more efficiently, among other services. Cash withdrawal at POS terminals is one such facility that vendors can provide their customers. As a business owner, if you want to provide a cash withdrawal facility at your establishment, you should know about the POS transaction limit and the various rules pertaining to it.

What is the POS limit in debit card?

As per the Reserve Bank of India guidelines, merchant establishments can allow customers and non-customers at their establishments to withdraw cash from their POS systems. This means that the persons using the facility are not obligated to purchase any goods or services but can still withdraw cash from such establishments, up to a certain limit set by the RBI.

As per the guidelines, merchants can allow cardholders to withdraw cash up to ₹2,000 per day, per card, in Tier III and IV centres. Cardholders withdrawing money in Tier I and II centres can only withdraw up to ₹1000 per day, per card.

After cardholders withdraw cash, merchants must provide them a receipt for their transaction completed via the POS terminal. The merchant must provide two separate receipts if the customer has also purchased goods or services at the establishment. As such, the merchant must provide one receipt indicating the cash withdrawn and another for the goods purchased or services procured.

How does cash withdrawal at POS work?

As per the RBI guidelines, cardholders can withdraw cash at POS terminals through various means. These include:

• Debit Cards

• Open system prepaid cards issued by Indian banks

• Unified Payments Interface (UPI) platforms

• Electronic cards linked with the overdraft facility (for Pradhan Mantri Jan Dhan Yojana account holders only)
  
  

As per the RBI guidelines, if merchants choose to levy any charges for using this facility, they cannot exceed 1% of the transaction amount in all cities.

POS cash withdrawal – things to remember

Merchant establishments must consider the following while providing POS cash withdrawal facilities

• The POS cash withdrawal facility is not extended to credit card users.

• This facility is not available at all merchant establishments.

• Business owners can enable customers to withdraw cash via POS terminals only if their designated acquirer bank has provided the POS terminal.

• The acquirer banks allow merchants to provide cash withdrawal facilities only after they undergo a thorough due diligence process.

• Cardholders can withdraw cash at such merchant establishments even if the acquirer bank is not the same as the bank issuing their Debit Card.

• If a merchant establishment is permitted to offer cash withdrawal at POS systems, the establishment must indicate that they provide the facility.

• Merchants must display the charges customers might have to pay for cash withdrawal.
  
  

MSME solutions at HDFC Bank

Now that you know more about POS limits for Debit Card, you should consider setting them up at your establishment. You can also update existing POS systems with ease, and study customer behaviours, provide spot offers and do much more than ever before. Explore HDFC Bank’s wide range of POS solutions here.

Eager to learn about the Advantages of Debit Cards? Click here.

​​​​​​​*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.