Bank counters in Kerala bracing for another queue – for card swipe machines

Bank counters will have barely disposed of the queue for ‘note-exchange’ before they encounter another - of retail merchants/shops/outlets in need of ATM/debit/credit card swipe machines.

The future of plastic money is beckoning already in line with the vision of the Prime Minister, enthusiastic spokespersons from the State Bank of India (SBI) and the State Bank of Travancore (SBT) told BusinessLine.

Between them, the two account for a big chunk of the ATMs operating in Kerala.

SPURT IN DEMAND

According to the head office of the SBI, branches across the state are witnessing huge demand for swipe machines. “We’re not able to square up. At least 700 applications are pending as of Saturday last, and counting.”

The swipe machine vendor is not able to supply to the requirement. “We have an L1 vendor based in Bengaluru, have placed our orders, and are waiting.

"The initial indent is for 1,000 machines. We’re exerting the maximum pressure on them to deliver,” an SBI spokesman said.

But it is learnt that the vendor may not be able to supply all at one go. The SBI does not expect it to deliver more than 100 in one consignment.

Customers include a cross-section of the retail trade. The trend suggests a decisive migration towards plastic money. And the bank is trying to facilitate it with minimum fuss and the least charges, the spokesman said.

‘LOWEST RENTALS’

The machines are rented out to the outlets and remain the bank’s property. The SBI does not charge any monthly rent for machines connected to the landline of the retail shop/outlet.

As for GPRS-driven machines, there are two kinds – one is the desktop version and the other is the portable version. The desktop machine is plugged into a power source. Here, the bank charges Rs 220 plus taxes per month.

For the portable GPRS machines, which are very handy to use and can be carried around, the rate is Rs 400 plus tax. The levies, the spokesman said, are the lowest across all banks, public sector or private sector. The rentals range between Rs 700 and Rs 1,200 between banks.

SBI collects an amount for two months in advance at one go – broken down into a caution deposit and advance rent, equivalent to one month’s rental each.

“Not many shops/outlets seem to know that we charge the least. Those who get to know are increasingly turning to us,” the SBI spokesman said.

TRANSACTION CHARGES

This is the same with transaction charges levied on sales. The charges are not the same for debit cards and credit cards.

As for debit cards, the levy is 0.75 per cent of the transacted value up to Rs 2,000. Anything above will attract one per cent. This is the same for all banks.

When it comes to a credit card, though, there is no such limit. SBI charges 1.5 per cent of the transaction value, which is, again, among the lowest. “Since we’re low on charges on the machine, the queues are longer,” the spokesman said.

A spokesperson at SBT said that it too is witnessing an unprecedented rush for swiping machines. The demand is from across the spectrum of the trade, though it may not have percolated down to the ration shops.

“The rush is so much that we can’t even apply our mind to judge the profiles of the applicants. This is quite unlike earlier when we used to run around and beg them to procure the machines.

"We are not able to keep pace with the demand. Our vendors do not have the manpower to install the machine.”

CASA GAINS

SBT bears the cost of the machine, which comes to a maximum of Rs 11,000. The rent and other charges are more or less in tune with those of the larger State Bank Group.

The bank needs to pay various networks such as Master/Visa, the card issuing bank or company, and the service provider handling all these transactions.

It doesn’t charge the merchant at a rate commensurate with this outgo, the spokesperson said.

“Suffice to say we bear a little extra from our pockets. Ultimately what we see ourselves as a financial supermarket where we provide all services.

"We don’t want a customer to go to another bank for the same service, even if it means something extra if only retain the customer.”

After all, the bank stands to benefit from the float money (from low-cost CASA or current and savings accounts) that the retail shop/outlet/merchant brings in through a current account, the spokesperson said.