SBI to ramp up point of sale terminals by over 5-fold to 1 lakh by March

http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/sbi-to-ramp-up-point-of-sale-terminals-by-over-5-fold-to-1-lakh-by-march/articleshow/16265648.cms

The country's largest lender State Bank of India is targeting to massively increase its point of sale (PoS) terminals to one lakh by next March from the current 18,500, a senior official said here today. 

"We are targeting to take the total number of PoS machines to 1 lakh by the end of March and 32,000 by the end of October," SBI chief general manager for new businesses R Karthikeyan told reporters on the sidelines of the FICCI-IBA conference here. 

The bank is engaging with retail chains and other merchants to roll out these terminals and achieve the target, he said, conceding that public sector banks have been late starters on the front. 

Private sector Axis Bank is the market leader in the merchant acquisition business with nearly 2.30 lakh PoS terminals deployed. 

Karthikeyan said core banking platforms are essential for entering the PoS space and hence, private sector lenders were the first off the mark. However, with the CBS platforms of public sector lenders maturing, they are now entering the fray aggressively, he said. 

Putting up a PoS terminal helps strengthen the fee income component for banks. The merchant pays a commission of up to 1 per cent per transaction, which is shared between the bank setting up the PoS terminal, the card issuing company and the payment gateway like Visa or MasterCard used. 

With its 18,500 machines deployed, SBI is at present witnessing a turnover of nearly Rs 4 crore per day and the average value transacted is also increasing, Karthikeyan said. 

The bank had first entered into a joint venture tie-up with a consortium of Visa and Elavon for rolling out 6 lakh POS terminals in 2010 but the JV did not work out due to issues over revenue sharing, royalty and usage charges, Karthikeyan said. 

The bank is now going solo by engaging a technology service provider for the initiative, he said. 

The proposed roll-out will be done in tier-I and II cities, as well as rural areas, Karthikeyan said, stressing that the PoS roll-out is a part of its strategy to encourage the use of electronic mode for transactions. 

Karthikeyan further said to entice more merchants, the bank would soon be announcing a cash-back scheme for them as a value proposition.