State Bank of India wants to use its vast branch network to get a little more of the fee income from credit card purchases. It plans to acquire one million Point of Sale (POS) terminals — machines used to swipe credit cards — over the next three years and put them up at shops.Mr O.P. Bhatt, Chairman and Managing Director, State Bank of India, said that the bank’s strong presence in various cities would act as a benefit in this venture. “It will act as a source of income for the bank. However, the customer would not be charged for the same.”

Some of these POS terminals are owned by ICICI Bank, HDFC Bank, HSBC and Citibank. These banks pay the merchantsthe value of purchases made by cardholders. Banks that give cash to the merchants are in effect doing it on behalf of the bank that has issued the credit card in the first place. Hence they get to keep a small portion of the cash discount that the merchant establishment offers on the value of the purchase.

There are approximately 3.7 lakh such terminals, mostly in cities. Considering the vast retail trade network in the country, SBI reckons that there is immense scope for installation of more such terminals. It plans to tap the boom in retail trade by setting up POS in towns where it has a stronger presence.

The POS will enable the bank to have access to more customers and will also act as a source of income for the bank. The bank is in talks with several vendors to finalise the plan by the end of this year.
Gold card launch

Mr Bhatt was speaking at the sidelines of the launch of SBI Gold International Debit Card in association with Visa International. SBI has launched the Gold Card, which is first in the series the bank plans to launch with Visa.

The bank also plans to increase the number of ATMs by nearly three times. It has about 7,200 ATMs at present and is planning to set up 25,000 more within three years.

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