State Bank of India (SBI) has sought permission from the Indian banking regulator Reserve Bank of India (RBI) to launch contact-less debit cards, which would enable customers to carry out transactions of up to Rs 2000 without entering the ATM pin number at point-of-sale (PoS) terminals, reports Press Trust of India. RBI had made entering ATM pin at PoS and merchant outlets mandatory from December 1, 2013.
Apparently, the bank is currently conducting a pilot project of such contactless cards at the Chennai and Mumbai metro stations. It’s worth noting that SBI had partnered Bangalore metro to launch NFC enabled debit cards that doubled up as travel smart cards, back in July 2011. SBI had also launched an e-debit card for e-commerce transactions in April 2012. Customers could use it for all online transactions and didn’t have to share the details of the principal account on the merchant website.
NFC enabled smart cards are mostly being used in metros: the Delhi Metro has one as well, and it’s particularly interesting to note that the National Mobility Card has received a Prepaid Payment wallet license from the Reserve Bank of India.
SBI’s other digital initiatives
– In July, SBI launched six digital branches called SBI InTouch across the country to offer banking solutions to its Internet and mobile customer base. These branches feature digital banking facilities like, multi-functional kiosks for instant account opening and other banking services, and ‘expert pods’ through which expert advisors would be available via video conferencing to answer customer queries.
– Earlier this year, in March SBI launched a new payments solution for merchants called SBIePay. At the time of the launch SBIePay offered real-time credit card, debit card, net banking and mobile payment transaction validation processes. Electronic Bill Presentment and Payment platform (EBPP) was also part of the plan.
– SBI had selected the Bangalore-based mobile PoS payments startup Ezetap to deploy 500,000 PoS terminals for customers of SBI and its 5 associate banks across the country over the next 5 years, in June 2014.
– It had also launched a prepaid mobile wallet service called Mobicash Easy in January last year. It allowed users to transfer funds and make bill payment among others.
There are about 418 million credit and debit cards in India (as of April 2014), and only 1 million POS terminals, according to this The Times of India report. It’ll be interesting to see if ATM pin-less transactions encourage more customers to use their debit cards, and if more merchant outlets install PoS terminals.