PSBs bank on PoS machines to increase earnings

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Published: 19th January 2010
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Banks are vying with one another to acquire point of sales (PoS) machines. This is a huge opportunity for the banks to increase additional income by increasing the card base and encouraging the card holders to use the same for their merchant transactions.

While SBI (State Bank of India) plans to acquire 50,000 PoS to begin with, its peer, Bank of India (BoI), has already floated request for proposal for the same.

So far, the PoS machine was being run by quite a few private sector banks like ICICI Bank and HDFC Banks only.

The present credit card base for all banks put together is 240 lakh. SBI enjoys 6.6 crore debit card holders on its fold and the number of card population was increasing by 17 lakh per annum at the bank. Similarly, the BoI was having 1, 65,000 credit cards currently.

However, new trend to acquire PoS is catching up and may generate competitive situation.

On SBI's JV with global players to form PoS terminals, the bank's deputy general manager Brajesh Varma said, "We are shortlisting the right candidate and should start the JV in another two months' time. We have received the necessary approvals, and hope to start the JV in another 6-7 months."

He added that the bank is looking at having six lakh POS terminals in five years' time.

The four contenders for providing the PoS terminals to the Bank of India include Venture Infotech, Fidelity International, Financial software services and a new venture by Tata group.

BoI has already acquired 25,000 PoS so far. Now, it is planning to acquire one lakh more PoSs.

"Volume in the business is Rs 15,000 per card. The card population of the bank currently stands at 1,15,000. Almost 75% of our card holders use the PoS,'' said BoI executive director M Narendra.

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