SBI, Hitachi form JV to boost digital payments, card acceptance platforms

Country’s largest lender State Bank of India (SBI) and Japan' Hitachi will enter into a joint venture (JV) for establishing card acceptance and digital payments platform in India. Hitachi Payments Services, a unit of Hitachi, will pick up 26 per cent stake in SBI Payment Services, a wholly-owned subsidiary of SBI. Both parties will apply for regulatory approvals, Hitachi said in a statement on Monday.

Last year in October, SBI had shortlisted three companies — Hitachi, Worldline and First Data Corporation — for a JV in the merchant-acquiring business and had proposed to transfer its business of deploying credit card swipe machines to the new entity.

SBI has more than 420 million customers and more than 600,000 Point of Sale (PoS) terminals and is today the largest merchant acquirer in the market in terms of terminals through its subsidiary SBI Payment.

SBI Chairman Rajnish Kumar said at 2,500 PoS per million people, the penetration of payment acceptance infrastructure is still low. "With this JV, we aim to grow the payment landscape by providing a frictionless modern digital payment platform to our customers," Kumar added.

Through this joint venture, Hitachi is entering a new field of business — the merchant acquiring business in India. Hitachi will contribute to the development and expansion of digital payments service in India by creating an online platform.

Hitachi Payments manages over 55,000 ATMs and 0.85 million PoS devices (including Mobile PoS) in India. It has been providing deployment, technology and management services for the card and digital acceptance payment network of SBI since 2011.

"Hitachi is managing over 70 per cent of SBI’s current network and this JV has further strengthened our partnership," said Loney Antony, managing director of Hitachi Payment Services.

Both partners will integrate individual strengths like SBI’s large customer base, branch network, brand trust, Hitachi’s digital technologies such as big data analytics and artificial intelligence.

State Bank of India