Demonetisation helps PoS device maker Verifone register highest growth in India

Verifone said that the firm has seen a five-fold demand for its devices since the demonetisation move last month

US electronic payment device maker Verifone, which has over 45% market share in India, says the month after demonetisation will help the firm show its highest growth ever in the country due to demand for devices that help merchants accept card payments.

Since November 8, when Prime Minister Narendra Modi announced withdrawal of Rs 500 and Rs 1,000 notes from circulation, India has seen a jump in digital payments as more users transacted to buy goods and services across the country. The shift has also hastened by the shortage of notes across banks and automatic teller machines across metros, small towns and villages and the government's change in narrative from combating black money to move the country towards a less-cash society.

"In India, we had our biggest ever shipment quarter as demand for our devices has been especially robust and our opportunity here continues to evolve given the demonetisation efforts of the Indian government," Marc Rothman, Chief Financial Officer of Verifone told investors early Tuesday.

In a separate statement, Verifone's South Asia Executive Director Vinayak Prasad said that the firm has seen a five-fold demand for its devices since the demonetisation move last month.

Verifone, which makes the point of sale machines that card users use to transact at vendors across India, is weak in the low-cost mobile PoS segment in the country and hopes the rapid growth would help it bridge the gap.

"The only place where we don't have strength is again in the low-cost mPOS which that market occasionally will embrace, but for this latest demonetisation I think we're in a good position," said Paul Galant, chief executive of Verifone. "With the demonetisation work going on in India, we see a pickup in volume albeit early days we're pretty excited about India, so guiding towards 15% plus for the Asia region," he said. 

India has removed service fees on debit and credit card transactions till December 31, in a move to encourage more users to transact using their cards. At the same time, Verifone faces competition from wallet providers such as Paytm and Freecharge who use smartphones as the platform for payments.

Verifone delivers it point-of-sale or electronic payment devices and services across customers in public sector banks, state-owned oil marketing companies, transit operations and companies in the financial inclusion space.