Point of Sale (POS) Networks for Microfinance

This presentation discusses the necessity and advantages of Point of Sale (POS) Networks in microfinance. It defines POS as a system or a device that performs an electronic transfer from one account to another.

It states its case for POS as follows:

• Changes in technology and industry dynamics make it possible for merchants to offer ATM services and non-cash purchases through POS;
• Organic growth of financial institutions serving the poor is not filling the gap in service for the unbanked and rural areas;
• Growth can take place by improving asset quality, customer service, and operating efficiency;
• POS have the following advantages for MFIs, clients and merchants:
  • Increase the security of financial transactions;
  • Reduce transaction costs;
  • Improve outreach;
  • Better staff focus on customer acquisition and service;
  • Reduce risk of handling cash for clients and merchants.

The presentation concludes by listing the following preconditions necessary for POS networks to develop:

• Satisfying customers and encouraging adoption;
• Refocusing MFI business on core competence;
• Optimizing pricing to encourage usage and expansion;
• Identifying POS profitability drivers;
• Dealing with regulation issues;
• Managing the demand for cash;
• Addressing business case issues for POS in microfinance;
• Identifying key challenges for MFIs and banks rolling out POS;
• Sharing pioneer approaches to solve challenges.