Banks in race to acquire point of sale terminals

After expanding their retail business,especially the credit and debit card businesses,banks are looking to acquire point of sale terminals across the country.

After expanding their retail business,especially the credit and debit card businesses,banks are looking to acquire point of sale (POS) terminals across the country. Following in the footsteps of ICICI Bank,which first started a POS venture in 2000 with a few hundred POS terminals,almost all public sector lending majors like State Bank of India,Bank of India and Punjab National Bank and private banks like HDFC Bank,ICICI Bank and HSBC Bank are in the race to expand the POS business to improve their bottom line.

SBI has got some POS systems of its own and the bank is likely to acquire 50,000 POS in the next 2-3 months time,a top SBI official said. We have already come out with expressions of interest (EoI) from all quarters including corporates,where we expect to set up the first POS terminal in the 2-3 months. We have shortlisted 3-4 companies for the proposed joint venture. We expect to select the final partner over the next 2-3 months, said Brajesh Varma,deputy general manager of SBI.

SBI has decided to foray into the merchant acquisition business with a view to increasing its fee-based income and invited proposals to select the JV partner last year. The bank received interest from around 10-12 global players,out of which three companies have been short-listed now. I think it will help the customers who hold prepaid cards,debit cards and credit cards in many ways. We want more than 5-6 lakh POS terminals in the next 5 years, Varma said.

We started this business in 2000 with a few hundred POS and now it has gone up to 1,30,000 units across the country. As far as the future business move is concerned,we will look at a huge growth as we have already partnered with First Data Corporation for this business, said Sachin Khandelwal,senior general manager,ICICI Bank limited.

Bank of India (BoI) has already acquired 25,000 POS terminals so far. Now,it is planning to acquire one lakh POS units. The banks talks are on with the vendors for the machines. The request for proposal (RFP) has already been floated by us for the same and the technical bidding was under process. The volume in this business is around Rs 15,000 per card, said M Narendra,executive director,BoI. The card population of the bank currently stands at 1,15,000. Almost 75 per cent of our card holders use the POS, said Narendra.

State-owned lender Union Bank of India also has decided to get 1,00,000 POS terminals by 2012. At present,the bank owns 1,000 POS terminals only in partnership with Atom. We are likely to get another 25,000 more POS terminals by the end of the current fiscal, said Pravin K Bansal,general manager (transaction banking) of the bank.

POS or checkout is the location where a transaction occurs. A checkout refers to a POS terminal or more generally to the hardware and software used for checkouts,the equivalent of an electronic cash register at merchant establishments and other services outfits.