| ICICI Bank has concluded the sale of its network of | | | | merchant establishments, including grocery stores and |
| electronic point of sales (PoS) terminals that accept | | | | supermarkets, could swipe customer cards and offer |
| Credit Card and Debit Card payments to First Data | | | | them cash. |
| Corporation (FDC). The bank has hived off its network | | | | In addition to unlocking value, ICICI Bank expects that |
| of over 1.5 lakh electronic swipe machines to a | | | | the specialised company will bring down transactions |
| separate company — ICICI Merchant Services. First | | | | costs and also grow the payment network more |
| Data has bought an 81% stake in the company which | | | | efficiently. This is the first time that an Indian bank has |
| has been valued at a little over $90 million. | | | | hived off its PoS terminal network. |
| When contacted, ICICI Bank refused to comment on | | | | So far it has been foreign banks that have outsourced |
| the transaction. The bank has, however, | | | | these functions but their network is of much smaller |
| communicated to merchants having ICICI Bank | | | | scale. |
| terminals that the PoS network has been transferred | | | | ICICI Merchant Services will earn a fee every time a |
| to ICICI Merchant Services. “First Data, along with | | | | credit cards or debit cards transaction is processed |
| partner banks, is keen to proliferate payment | | | | through the point of sale network. The fee is usually |
| transactions not just at top retailers but also through | | | | borne by the merchant and a large part of it goes to |
| small cities or towns in India,” said Amrish Rau, | | | | the card issuing bank. This is in lieu of the credit that |
| country manager, First Data Corporation. | | | | the issuing bank extends to the cardholder until the end |
| Referring to the transaction with ICICI Bank, Mr Rau | | | | of the billing cycle. A smaller part of the commission |
| said an announcement would be made in due course. | | | | goes to the bank owning the PoS terminal (acquiring |
| Mr Rau, who represents First Data in the country, is | | | | bank) and smaller portion to the payment company |
| likely to head the new payments company. First Data | | | | — Mastercard or Visa. |
| is a US-based company that has been created after | | | | Incidentally, State Bank of India has for some time |
| banks farmed out their back office processing | | | | expressed its intention to set up a network of half a |
| systems into a separate company. FDC is presently | | | | million point of sales terminals. To build this network the |
| owned by private equity giant KKR. | | | | bank had earlier sought partners. However, the project |
| The Reserve Bank of India has already given | | | | was shelved as the bank decided to take a more |
| clearance for the deal. According to banking sources, | | | | holistic approach of its payments business. |
| the deal value has gone up after RBI said that | | | | |