First Data Corporation has emerged as the successful bidder for ICICI Banks’s Point of Sale (POS) terminals, reports The Economic Times. The deal is expected to be valued at Rs 350 crore and may be signed in a few weeks.
Visa, a rival of First Data Corp was also one of the contenders for ICICI Bank’s POS terminals. According to the report, despite being a strong contender, Visa might have lost out to First Data owing to the fact that it does not have any such business in other parts of the world. Also, since Visa is also a payment service provider, the ownership of a POS terminal could have resulted in a conflict of interests.
The report further says that before selling the POS terminals, ICICI Bank will hive off the terminals into another company, which will then sell the POS terminals to First Data. The new entity will earn fee from each debit card or credit card transaction processed through the POS terminals.
The deal is expected to unlock the value for ICICI Bank and bring down the cost of transactions and hence help the network grow.
FSS, Total Systems Services, Blackstone-CMS joint venture, Venture Infotek and some private equity firms had also bid for ICICI Bank’s POS Terminals. First Data Corp, which is owned by the private equity firm KKR, was formed when the US banks farmed out their back office IT processing systems.
The company currently serves over 5 million merchant locations and has over 1900 card issuers. It provides services like merchant transaction processing services - credit, debit, private-label, gift, payroll and other prepaid card offerings. KKR acquired First Data in 2007.
ICICI Bank currently has a network of 1.8 lakh terminals of a country-wide total of around 3.5 lakh POS terminals. It has around seven million credit cards and 14 million debit cards in circulation.