State Bank of India (SBI), the country’s largest lender, debuted its contactless NFC-based debit and credit cards today. The cards will be issued by SBI’s subsidiary SBI Cards and the bank said that it has deployed 5,000 point-of-sale (POS) machines which are capable of accepting contactless cards. SBI chairman Arundhati Bhattacharya also said that the bank is looking at converting 100,000 point-of-sale (POS) terminals in eight cities in the country going forward.
According to the Reserve Bank of India’s data, SBI has 181,310 POS terminals in the country at the end of December 2014. SBI also has 30,09,541 credit cards and 14,75,21,342 debit cards in circulation in the country. The total number of POS machines at the end of December 2014 was 1,058,294.
Separately, SBI officials mentioned that the cost of converting a POS machine to an NFC-capable one is about Rs 2,000-2,500.
Bhattacharya also added that the bank will be converting all cards of existing customers to contactless cards, and all cards issued after September 1 will be NFC enabled. On May 7, the RBI, in a notification asked all new cards issued by banks – debit and credit, domestic and international – to be EMV chip and pin based cards from September 1. The banking regulator is also framing a migration plan for existing magnetic stripe only cards.
“The cards are going to be converted to NFC cards when customers are re-carded and whenever a customer requests for one. So the conversion is an ongoing process. Right now we are not charging customers for converting to NFC cards,” Bhattacharya said. Note that SBI’s new NFC cards will also contain an EMV chip and magnetic strip which means that they can be used as regular debit and credit cards.
SBI has also partnered with retail outlets such as Shopper’s Stop, Big Bazaar, Starbucks, McDonald’s, Reliance Retail and Fab India for rolling out its contactless POS machines.
Currently, the only other bank in the country which has rolled out NFC cards is ICICI Bank. Rajiv Sabharwal, executive director at ICICI Bank had earlier said that they had tied up with 200 merchants for the NFC cards. The cards active in Gurgaon, Hyderabad and Mumbai and the bank plans to extend this to other cities as well.
Bhattacharya also said that the RBI’s final guidelines for NFC card transactions without a PIN for small value transactions should come by the end of the month. Earlier in March, the RBI in its draft guidelines eased norms for payments made using contactless cards and said that transactions below Rs 2,000 will not need a additional factor of authentication. “We have told RBI that we would like the limit to go to 5,000, but at this time only Rs 2000 is allowed,” SBI’s chairman added.