Visa, RBS, Global Payments shorlisted by SBI for POS

By | March 8, 2010

State Bank of India (SBI) has shortlisted 3 applicants as prospective associates for a joint venture to install 5 lakh swipe machines for credit and debit cards throughout the country. These applicants are Visa, Royal Bank of Scotland (RBS) and Global Payments.

SBI has been looking to reach leadership position in electronic networks. SBI has more than 20,000 automated teller machines, and has long beaten ICICI Bank in ATMs.

ICICI Bank had the biggest network of POS Terminals with more than 1.5 lakh machines. But now it has made its POS network into a distinct company where KKR-run First Data holds an 80% stake and the rest with ICICI Bank. The deal earned ICICI Bank more than Rs 400 crore.

From possible applicants, Visa is a global leader in the payments world, but POS terminals is quite a new area for the card company . RBS has a big POS terminal business in Europe. Global Payments, is already in a joint venture with HSBC.

Sources said SBI’s planned joint venture will be very different from ICICI Bank’s venture. While ICICI Bank has separated out the unit entirely and has kept a very small stake, SBI will carry on driving the business with a majority stake of 65%.

Also, SBI is likely to ask for a brand premium from the associate as the bank will be loaning its name to the business. The bank will also be heavily engaged in getting merchant stores and will get some type of payments for services offered.

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