Know What is POS Limit

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 give a cash withdrawal facility at your establishment, you should know about the POS transaction limit and its various rules.

A POS (Point of Sale) system combines hardware and software that helps you manage sales transactions. It typically includes a register, a barcode scanner, a receipt printer, and a computer or tablet running POS software. When a customer purchases, you enter the product information into the system, which calculates the total amount due.

The POS system processes the payment, updates inventory levels, and generates a receipt. This system streamlines your sales process, tracks your inventory, and provides valuable reports on sales trends, helping you run your business more efficiently.

Per the Reserve Bank of India guidelines, merchant establishments can allow customers and non-customers 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 specific 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 with a receipt for their transaction completed via the POS terminal. If the customer purchases goods or services at the establishment, the merchant must provide two separate receipts: one indicating the cash was withdrawn and another for the goods purchased or services procured.

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)

According to the RBI guidelines, merchants cannot levy charges for using this facility exceeding 1% of the transaction amount in all cities.

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 different from the bank issuing their Debit Card.

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

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

Now that you know more about the POS limits for Debit Cards, consider setting them up at your establishment. You can also easily update existing POS systems, 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.