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India’s financial-inclusion drive has hit a wall, as banks and State governments that had sought Point of Sale (PoS) machines sourced through the public sector Energy Efficiency Services Ltd’s (EESL) tender have not expressed any interest since the bids for supply of these machines were opened.
EESL sought to to procure seven lakh mobile and three lakh regular (fixed) PoS machines through a tender on December 1. It received bids from a number of players, including Ingenico, Verifone, MSwipe, Ezetap, TVS Electronics and Zivah.
The move was prompted by the demonetisation of high-value notes on November 8, and the sudden push towards digital payments.
Sources told BusinessLine that EESL would issue the letter of award (LoA) to bidders once banks and State governments respond to the letters sent to them.
According to officials, among others, the Andhra Pradesh government and the Centre’s Department of Electronics and Information Technology (DeITY) had approached EESL when the bids were being called. Officials said that they would scrap the tender altogether if there is no response from the institutions that had sought the PoS machines.
Manufacturer pressureBoosted by the sudden demand, manufacturers appear to be arm-twisting EESL into procuring machines at higher prices. EESL had budgeted less than ₹7,000 and ₹3,000, respectively, for each regular and mobile PoS machine.
The lowest bidder for both types, Ingenico, had offered 50,000 mobile PoS machines at ₹3,100 each and 50,000 fixed PoS machines at ₹6,000 each.
To meet the requirement of the remaining nine lakh machines, EESL had to rope in another player.
MSwipe, the second-lowest bidder, had committed to provide seven lakh instruments at ₹5,200 each.
EESL has been negotiating with MSwipe to bring down the costs or match Ingenico’s bid to successfully award the tender. Since none of the institutions have sought PoS machines after the bids were opened, EESL has not been rushing the negotiations.
This is the largest tender for PoS machines in the world and EESL’s success in this tender would mean virtually doubling the number of PoS machines in the country. India, at present, has 14 lakh PoS machines, of which only 50,000 are mobile.
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