UTI Bank to ramp up merchant acquisition

UTI Bank is foraying into merchant acquiring business in a big way. It has already set up around 1,000 electronic data capture (EDC) terminals across the country.

Over the last 2-3 years private banks such as HDFC Bank, ICICI Bank and IDBI Bank have entered the field. HDFC Bank and ICICI Bank are the largest and have around 28,000 terminals and 25,000 terminals, respectively.

UTI Bank is aiming to be among the top four players in the acquiring business by the end of the next fiscal.

It is looking at setting up terminals in all the 110 towns and cities where it has its branches. It is, however, concentrating more in Tier-II towns and in hospitals, nursing homes, petrol pumps, shopping centres.

The bank is betting on volumes to make money in this business. It has been able to buy machines from overseas at around Rs 10,000 a machine.

"Costs have come down drastically compared with around Rs 26,000 a machine two years ago. Also our machines are battery operated and therefore it will not be a problem in running these machines in Tier II towns where there is no proper supply of electricity," a senior UTI Bank official said.

The bank already is a major player in debit cards. It has now issued more than two million debit cards and plans to double its card base by the end of next fiscal.

It also examining the possibility of entering into the credit card business next fiscal. In the travel card segment, which the bank had launched last year, it is planning to unveil a euro and sterling variant card. The bank is clocking more than $25 million on volumes through its dollar variant travel card.

According to bank officials, acceptance of this card is higher among leisure and business travellers.