Mobile payment systems are tipped to benefit from a shortage of card machines in India caused by a surprise government decision to cancel INR500 ($7.50) and INR1,000 notes as part of a digital payments push.

The government’s initiative is reliant on retailers being able to process payments electronically. However, deliveries are running behind schedule, according to the Financial Times.

Praveen Khandelwal, secretary-general of the Confederation of All India Traders, said: “Banks right now are overloaded with the business of dispersing the new currency — the availability of card terminals is of second or third priority.

“When you get hold of someone it will take a week to 10 days to get one, but the problem is you can’t even get hold of someone,” he told the FT.

Porush Singh, South Asia division president for Mastercard, added: “Acceptance infrastructure is the need of the hour. Banks used to get 1,000 orders a day, but are now up to 4,000 or 5,000, and normally they wouldn’t maintain a very high stock.”

The shortfall leaves an opportunity for mobile point of sale (MPoS) systems, which involve inserting a card reader into a smartphone or tablet to process payments. There are a number of MPoS systems active in the Indian market, including Mswipe and ePaisa.

“The bigger plus is all new technologies are being developed to help with transactions, by using mobiles as a card machine, or online payment systems or even manned micro-ATMs,” said Nandan Nilekani, co-founder of Infosys.

Micro-ATMs are point-of-sale devices that run on minimal power and connect to banking servers via GPRS, thereby reducing operational costs.