State Bank of India and Hitachi join forces for cards and paytech venture
New paytech project in India
State Bank of India (SBI) and Hitachi Payments (Hitachi’s subsidiary in India) have signed a definitive agreement to enter into a joint venture to build “a state-of-the-art card acceptance and future ready digital payments platform for India”, according to the two parties.
Hitachi Payments will invest 26% in SBI Payment Services (a subsidiary of SBI), and through this investment, SBI Payment will be a joint venture between both parties.
Both parties will proceed to apply for regulatory approvals.
“Financial services market in India is making remarkable progress led by economic growth, Financial Inclusion policy and Digital India initiatives,” the companies observe. “Bank account holders have increased substantially in the past few years and as a result, banking transactions on ATMs and digital transactions have correspondingly increased dramatically.”
And yet, “at 2,500 POS per million people, the penetration of payment acceptance infrastructure is still low”, comments Rajnish Kumar, chairman of SBI.
“With this joint venture, we aim to grow the payment landscape by providing a frictionless modern digital payment platform to our customers. In Hitachi Payments, we see a long-term business and technology partner that has the ability, capability and willingness to develop the broad vision of SBI which is tied into the success of the digital payment imperatives of the country.”
SBI has been working with Hitachi since 2011. It provides deployment, technology and management services for the card and digital acceptance payment network, and at present manages over 70% of the bank’s network.
Through this new venture, Hitachi will enter a new field of business in the country – merchant acquiring.
Hitachi says it will provide wide range of services contributing to the Digital India initiative by creating innovative solutions with its Lumada proposition – it will linkup digital payments platform to the digital technologies of Lumada, and also will provide solutions for mass transit sector and e-commerce businesses.
The vendor adds that it has also been contributing to digitalise other governmental and educational services, such as “e-Governance” and “e-Education” mainly through Hitachi MGRM Net (an new IT services provider in India, established in April 2018).
Loney Antony, MD of Hitachi Payments, claims that thanks to the vendor’s “superior in-house technology platform and widespread field services in the country”, SBI has been able to roll out “the largest acquiring network” (in terms of terminals through its subsidiary SBI Payment)as well as introduce several innovations to its clients, including the recently launched Mopad, a multi-modal payment device for POS.
“Hitachi Payments and SBI jointly build a world-class payments platform for India which can be rolled out for international customers as well,” he adds.
SBI is the largest state-owned bank in India, with 420+ million customers and 600,000+ POS terminals countrywide.
Hitachi Payments focuses on cash and digital payment solutions such as ATM managed services and POS processing services. It has over 55,000 ATMs and 850,000 POS devices (including mobile POS) under management in India.
