The Indian unit of US-based Verifone Inc plans to launch pre-paid debit cards.
The company has already tied up with Wipro Finance, Escorts Finance and recently, Hyderabad-based Model Fincorp, for introducing its smart card electronic cash system in Bangalore, Delhi and Hyderabad.Verifone will introduce the smart card in Chandigarh next.
By end-1998, we plan to cover Mumbai, Pune, Coimbatore and Kochi, where our smart cards can be used at petrol stations, chain shops, restaurants and payment of utilities like electricity, water and telephone bills, says Giri Khatod, operations chief, Verifone India.
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In a programme called SmartCash 97, to be held in Mumbai on December 19, Verifone will put up its electronic cash solutions to various banks and financial institutions. Hatim A Tyabji, CEO, Verifone Inc, will address the financial institutions at the meet.
According to Khatod, banks and institutions can improve interest spreads while generating steady fee-based income with the card. Since the cardholders pay the bank cash to load equivalent amount of E-cash on their card, which is spent only over a period of time, this becomes available with the bank as float money.
As the banks and institutions are in a position to monitor the spending pattern of the cardholders, they can plan and deploy the float money to generate interest income. The company also seeks to attract banks and FIs by glossing over the low-cost, no-risk, high-return solution offered by these debit cards.
Besides, the smart card is being offered to replace the mailing of dividend cheques and benefit disbursements. According to Khatod, pre-paid debit card does not depend heavily on telecom infrastructure, making these cards another solution for banks in urban and rural areas.
Unlike a credit card, pre-paid smart card comes with a built in microprocessor chip and a personal identification number which keeps track of ones transaction details. It carries no credit, serves mostly as E-cash and is useful for essential purchases. Wipro Finance launched its Ezy Cash in Bangalore after tying up with Hindustan Petroleum, grocery chains and also Mico for its automobile spare parts.
By end-1998, Verifone plans to cover Mumbai, Pune, Coimbatore and Kochi, where its cards can be used at petrol stations, restaurants and payment of electricity, water and telephone bills