Point-of-Sale Persons (PoS)

Point-of-Sale Persons (PoS) represent an important institutional innovation in India’s financial and insurance distribution framework, aimed at expanding last-mile access to financial products. Introduced primarily within the insurance sector and increasingly linked with banking channels, PoS persons play a significant role in promoting financial inclusion, improving insurance penetration, and supporting the formalisation of the Indian economy. Their relevance lies in bridging the gap between formal financial institutions and underserved populations, particularly in rural and semi-urban areas.

Concept and Meaning of Point-of-Sale Persons

Point-of-Sale Persons are individuals authorised to sell simple and pre-approved financial or insurance products directly to customers at the point of interaction. Unlike traditional agents or intermediaries, PoS persons operate under simplified regulatory norms and are permitted to distribute only standardised products with low complexity and minimal risk of mis-selling.
The PoS model leverages technology-enabled platforms and basic training to enable individuals such as banking correspondents, shop owners, or field-level workers to act as distribution points for financial services. This approach reduces transaction costs and enhances outreach.

Regulatory Framework and Institutional Background

The PoS framework in India was formally introduced by the Insurance Regulatory and Development Authority of India to promote wider insurance coverage and simplify product distribution. The guidelines were designed to create a new category of distributors who could sell specified life and general insurance products after undergoing limited training and certification.
In the broader financial ecosystem, PoS persons often operate in coordination with banks regulated by the Reserve Bank of India, particularly through bancassurance models and financial inclusion initiatives. This regulatory alignment ensures consumer protection while facilitating access.

Objectives of the PoS Model

The primary objectives of introducing Point-of-Sale Persons include expanding financial and insurance penetration, especially among low-income and first-time users; reducing the complexity and cost of distribution; preventing mis-selling through standardised products; and generating local employment opportunities.
The PoS model reflects a shift towards simplified, technology-driven financial intermediation, aligned with the broader goals of inclusive growth and financial deepening.

Role in Banking and Financial Inclusion

PoS persons complement traditional banking infrastructure by acting as local access points for financial products. In many cases, they are linked to banking correspondents or digital banking platforms, enabling customers to access insurance, basic credit-linked products, and payment services in familiar local settings.
This integration strengthens the financial inclusion ecosystem by encouraging cross-selling of financial products to newly banked populations. For example, customers opening basic savings accounts can be simultaneously offered micro-insurance products through PoS channels, enhancing the utility of financial inclusion initiatives.

Contribution to Insurance Penetration

Insurance penetration in India has historically remained low, particularly in rural and informal sectors. PoS persons address this gap by distributing simple products such as term insurance, personal accident insurance, health micro-insurance, and standard motor insurance policies.
By operating within clearly defined product boundaries and using digital tools for onboarding and premium collection, PoS persons improve transparency and reduce documentation barriers. This has helped increase awareness and uptake of insurance among economically vulnerable groups.

Economic Impact and Employment Generation

At the macroeconomic level, the PoS framework supports the formalisation of the economy by bringing households into regulated financial and insurance systems. Increased insurance coverage reduces vulnerability to income shocks, thereby improving household financial resilience and consumption stability.
The PoS model also creates supplementary income and employment opportunities, particularly for youth and self-employed individuals. This contributes to local economic development and strengthens the grassroots financial infrastructure.

Advantages of the PoS System

The PoS system offers several advantages. It lowers distribution costs for insurers and banks, enhances accessibility for customers, and ensures standardisation of products, which reduces the risk of mis-selling. The use of technology improves efficiency, record-keeping, and regulatory compliance.
For the financial system, PoS persons help expand the customer base and mobilise long-term savings through insurance-linked products, supporting capital formation in the economy.