Companies that help in processing card payments look set to benefit from rising demand for portable card swipe machines after the Reserve Bank of India adopted new rules to prevent fraud and enhance security.

Merchants in India usually swipe cards through a reader to generate receipts that customers sign, but the new rule, effective Dec. 1, adds another layer of security by making debit card holders enter their personal identification numbers to validate transactions via these machines, also referred to as point-of-sale (POS) terminals.

Businesses such as fuel stations, hotels and restaurants that normally keep their card machines out of the customer’s reach will have to buy the portable, GPRS-enabled devices to offer convenience to clients.

Sunith Menon, India’s managing director for France-based Ingenico S.A., which manufactures such devices and supplies them to various banks, expects revenue to rise by 20 percent as demand for the wireless POS terminals rises after the new RBI mandate.

“We are seeing an increased requirement coming in from banks,” he said, adding that ICICI-First Data, Bank of Baroda and Axis Bank were among those who have placed orders for GPRS-enabled POS terminals.

Of the 20,000 POS terminals sold every month by Ingenico in the country, 10 percent were GPRS-enabled models. Menon now expects such devices to account for a 30 percent share in his near-term sales.

The new PIN mandate would affect more than 350 million debit card holders in the country. A recent study by industry body ASSOCHAM showed that the debit card users, growing at an annual rate of 18 percent, were clocking sales of 69 billion rupees using POS terminals every month.

The number of POS terminals in the market has grown significantly in the recent years. As of the end of September, there were 965,000 terminals in use across the country, 46 percent higher than the 661,000 devices in March 2012, according to data provided by e-payment services provider Worldline India.

Pine Labs India, which counts Starbucks, Future Group and Pantaloon Retail among its clients, has installed about 4,000 GPRS swipe machines since November, higher than the monthly average of 200 to 300. In the next month, the company expects to install another 2,000 such machines.

“Somebody like a premium restaurant chain will never like to call the customer, neither would the customer like to go behind the counter,” said Kush Mehra, vice president of payment solutions at Pine Labs. ”They have become the newest recipients of this technology along with a very large network of fuel stations.”

One of their clients, Speciality Restaurants, which operates brands such as Mainland China and Oh! Calcutta, have placed orders for 50 GPRS machines and plan to buy at least one machine for each of their 74 restaurants in India.

Over the years, Indians have increasingly started using plastic as their payment method. But fraudulent transactions on credit and debit cards have also become common. The central bank earlier this year directed banks to put in place certain security and risk control measures to safeguard customers’ interest.

“It will take a short bit of time for customers to get a little acclimatized with this change … having said that, this is for the benefit for the entire industry,” said Mehra of Pine Labs.