Hitachi Payment Services, a wholly-owned subsidiary of Hitachi, and State Bank of India (SBI) have signed a definitive agreement to enter into a joint venture for the establishment of a state-of-the-art card acceptance and digital payments platform for India.
Hitachi and SBI JV to accelerate digital payments in India
It is planned that Hitachi Payments will invest [26%] to SBI Payment Services, 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(1) and Digital India initiatives. 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.
SBI, as the largest state-owned commercial bank in India, has more than 420 million customers and more than 600,000 POS(2) terminals and is today the largest merchant acquirer in the market in terms of terminals through its subsidiary SBI Payment.
Hitachi Payments has over 55,000 ATMs and 850,000 POS devices (including Mobile POS) under management in India, it has also been providing deployment, technology and management services for the card and digital acceptance payment network of SBI since 2011.
Through this joint venture, Hitachi enters a new field of business which is the merchant acquiring business(3) in India. Hitachi will contribute to the development and expansion of digital payments service business in India by creating a digital payments platform that will enable better convenience and quality through integrating our individual strengths, SBI’s large customer base, branch network, brand trust and Hitachi’s capability and know-how of digital payments and state-of-the-art digital technologies such as Big Data Analytics and Artificial Intelligence (AI).
“At 2,500 POS per million people, the penetration of payment acceptance infrastructure is still low,” says Rajnish Kumar, Chairman of State Bank of India
“With this JV, 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 also believes that the future of the payment services lies in the capability of the JV to develop new digital acquiring strategies for the benefit of its consumers.”
(1) Government policy to spread financial service to nationwide including rural area which encourage to increase bank account holders and ATMs deployment
(2) Point of sale system
(3) Merchant contracts operation for card business to source merchant which accepts card payment and exchange contract. Select, maintain and manage merchants
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