ICICI Bank has concluded the sale of its network of electronic point of sales (PoS) terminals that accept credit and debit card payments to First Data Corporation (FDC), reports The Economic Times. FDC is currently owned by private equity giant KKR. The bank has hived off its network of over 1.5 lakh electronic swipe machines to a separate company — ICICI Merchant Services. The report adds that First Data has bought an 81% stake in the company which has been valued at a little over $90 million.
ICICI Bank expects that the specialised company will bring down transactions costs and also grow the payment network more efficiently. This is the first time that an Indian bank has hived off its PoS terminal network. Other large banks might also follow the move of ICICI Bank. The bank was also reportedly looking to spin off its ATM assets earlier, but decided to hive off only PoS.
Some other banks like SBI have outsourced ATMs from Tata Communications and TCS, while Bank of India, United Bank and Dena Bank have outsourcing deals with Fidelity National Information Service. Yes Bank tied up with the American payment processing company First Data Corporation (FDC) for an ATM deal, where the bank will pay transaction-based charges.
RBI recently said that merchant establishments, including grocery stores and supermarkets, could swipe customer cards and offer them cash.
Prizm Payments, a Chennai-based technology infrastructure provider in electronic payments space, acquired the point-of-sales (PoS) platform of Reliance Money in an all-cash deal. It is planning to roll out ATMs and PoS networks across the country mostly on a transaction fee model, which will help banks and financial institutions avoid capital expenditure.