State Bank of India (SBI) on Monday said it has signed an agreement with Japan’s Hitachi Payment Services to sell a 26% stake in subsidiary SBI Payment Services and form a joint venture (JV) for a card acceptance and digital payments platform.
The price at which the sale would happen could not be ascertained immediately.
As per SBI’s annual report for FY18, SBI Payment Services’ total balance sheet equity, including reserves and surplus, stood at `3.8 crore, while its total balance sheet assets were at `5.61 crore. A joint statement issued by SBI and Hitachi said that the JV combines the distribution network of SBI with technology and services of the Hitachi Group in areas such as digital payments technology, services, big data, analytics and artificial intelligence.
It will offer a comprehensive suite of payment options to customers and merchants focusing on areas such as the roll-out of a nationwide card acceptance infrastructure, quick response (QR) code acceptance, Unified Payment Interface, mass transit sector and e-commerce businesses.
The statement quoted SBI chairman Rajnish Kumar as saying that at 2,500 point of sale (PoS) terminals per million people, the penetration of payment acceptance infrastructure is still low in India. “With this JV, we aim to grow the payment landscape by providing a frictionless modern digital payment platform to our customers,” he said. “SBI also believes that the future of the payment services lies in the capability of the JV to develop new digital acquiring strategies for the benefit of its consumers.”
Seven entities were reported to have been in the running to acquire a stake in SBI’s merchant-acquiring business, including payment players Worldline, PayU, FSS and First Data. At the end of FY18, SBI had 1.96 million merchant payment acceptance touchpoints. Hitachi Payment Services has over 55,000 ATMs, 12,000 cash recycling machines and 8,50,000 POS devices under management.