Hitachi and State Bank of India form JV for Digital Payments Platform
Partnership to establish card acceptance and digital payments platform
Hitachi Payment Services Pvt. Ltd. (Hitachi Payments), a wholly-owned subsidiary of Hitachi based in India, and State Bank of India (SBI) have entered into a joint venture for the establishment of a card acceptance and digital payments platform for India.
Hitachi Payments will invest [26%] to SBI Payment Services Pvt. Ltd. (SBI Payment), a wholly-owned subsidiary of SBI, and through this investment, SBI Payment will be a joint venture between both parties. Both parties will proceed to apply for regulatory approvals.
Through this joint venture, Hitachi enters the merchant acquiring business in India, an integral part of card payment transactions processing. Acquirers enable merchants to accept card payments by acting as a link between merchants, issuers, and payment networks — providing authorisation, clearing and settlement, dispute management, and information services to merchants.
With this JV, Hitachi will link up the digital payments platform to its Lumada Platform. The company is also looking at providing solutions for mass transit sector and e-commerce businesses using its Lumada platform. Hitachi has also been contributing to digitalise governmental and educational services such as “e-Governance” and “e-Education” through Hitachi MGRM Net which was established in April 2018 and provides IT services in India.
The digital payments platform will integrate SBI’s large customer base, branch network, brand trust and Hitachi’s capability and know-how in digital payments, Big Data Analytics and Artificial Intelligence (AI).
SBI, the largest state-owned commercial bank in India, has more than 420 million customers and more than 6,00,000 POS (Point of Sale System) terminals and is today the largest merchant acquirer in the market in terms of terminals through its subsidiary SBI Payment.
“At 2,500 PoS per million people, the penetration of payment acceptance infrastructure is still low. With this JV, we aim to grow the payment landscape by providing a frictionless modern digital payment platform to our customers. In Hitachi Payments, we see a long-term business and technology partner that has the ability, capability and willingness to develop the broad vision of SBI which is tied into the success of the digital payment imperatives of the country. 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,” said Rajnish Kumar, Chairman of State Bank of India.
Hitachi Payments provides ATM managed services and POS processing services. It has over 55,000 ATMs and 850,000 POS devices (including Mobile POS) under management in India. Hitachi Payments has been providing deployment, technology and management services for the card and digital acceptance payment network of SBI since 2011.
“Since 2011, we have been associated with SBI, managing over 70% of its current network and this JV has further strengthened our partnership. As a result of our superior in-house technology platform and widespread field services in the country, SBI has been able to not only roll out the largest acquiring network, but also offer several innovations to its consumers — the recently launched MOPAD, a multi-modal payment device for PoS is one such mention. This will continue in the future as Hitachi Payments and SBI jointly build a world-class payments platform for India which can be rolled out for international customers as well,” said Loney Antony, Managing Director of Hitachi Payment Services Pvt. Ltd.
“Along with the accelerating movement of digitisation around the world, Hitachi aims to improve people’s lives by providing digital solutions in India and other countries. By establishing the joint venture with SBI, Hitachi will further contribute to the development of digital payments in India by building a state-of-the-art digital payments platform and leveraging SBI’s robust customer network,” said Toshiaki Higashihara, President & CEO of Hitachi, Ltd.
“Under the India Government’s “Digital India” initiative, India is progressing towards becoming a knowledge economy with technology as the pivot. Hitachi is aiding in development of India’s social infrastructure as well as giving a fillip to the economy. This mutually beneficial partnership with the financial giant SBI will allow us to widen our footprint pan India,” said Bharat Kaushal, Managing Director of Hitachi India Pvt. Ltd.
