A deal agreed last year between ICICI
and First Data has now received Reserve Bank of India approval,
paving the way for a merchant-acquiring alliance widely expected to
accelerate card growth. The new firm will look to more than treble
its Indian POS network in the next five years, reports Douglas Blakey.

ICICI Bank, India’s largest private
sector bank, and global payment processor First Data have formed a
merchant-acquiring alliance named ICICI Merchant Services. The new
venture has taken over ICICI Bank’s merchant acquiring portfolio,
representing 30 percent of the current Indian acquiring market.

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The joint venture will be 81 percent-owned by
First Data and 19 percent by ICICI.

It will look to build on the bank’s existing
portfolio of 150,000 merchants, with plans to reach 500,000
terminals in the next five years.

First Data believe that merchants in India
have previously viewed POS terminals as a loss-making business, but
argue that with the introduction of innovative products and
services, merchants can in future generate fresh revenue
streams.

“India is a strategic market for First Data,”
said David Yates, president of First Data’s international
business.

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“This new alliance gives us the scale and
presence that we can build from, with a highly regarded partner. We
hope our alliance will make a positive contribution to the Indian
economy, partnering with ICICI to provide specialised, world-class
merchant acquiring services to the market.“

First Data is reportedly investing around $80
million in the joint venture, with around 300 employees of the bank
expected to transfer to the new business.

“We continue to work towards optimising and
improving the efficiencies of our business, to meet customer needs
effectively and increase service quality,” said Sandeep Bakhshi,
deputy managing director of ICICI. “By partnering with a leading
global player like First Data, we are able to expand our service
offering to our merchant customers.”

The deal does not, however, include
ICICI’s ATM business, contrary to reports last year that the bank
was looking to sell off its ATM network.

Outsourcing their ATM networks has become an
increasingly popular strategy among Indian banks in the past
year.

First Data partnered with YES Bank last July
to establish a network of ATMs across various cities in India,
leveraging its technical expertise to support the bank in
identifying locations, delivering installation and field management
services including 24/7 monitoring and vendor management.

Axis Bank, with a network of 4,000 ATMs, is
reportedly close to finalising its outsourcing vendor while the
country’s largest lender – State Bank of India, with a network of
17,000 ATMs – outsourced 500 units last year with plans this year
to outsource a further 1,000 ATMs.

ATM transactions in India have soared by
around 40 percent in the past year since the Reserve Bank allowed
account holders to use any ATM in the country without charge for
five withdrawals up to INR10, 000 a month ($219.5)

IT Contracts
RBI Fintech DealWatch tracks recent major technology contract wins with a focus on the retail financial services industry as well as fintech mergers and acquisitions and innovative new product launches
Country	Participants	Type/value	Details	Date
New Zealand	Westpac New Zealand, NCR	ATM contract win	NCR Corporation has signed a multi-million dollar deal with the New Zealand unit of Westpac. By June, more than 400 units – 80 percent of the bank’s network – will be replaced with NCR’s next generation SelfServ ATMs. As well as ATM hardware and software, the deal includes on-site maintenance, remote support and helpdesk services for up to nine years in renewable three-year terms.	20 Jan
Qatar	International Bank of Qatar, First Data	Processing contract win	First Data has agreed a four-year processing deal with International Bank of Qatar, incorporating the full spectrum of card processing services, ranging from front-end services in card application management, transaction processing, authorisations, clearing and settlement, to card account management, loyalty processing and fraud management solutions.	13 Jan
Vietnam	Saigon Bank for Industry and Trade, SunGard	Internet banking software contract win	Saigon Bank for Industry and Trade is to deploy SunGard’s Ambit Online software to extend its internet banking services. The 64-branch bank implemented the vendor’s core banking software during 2008-2009.	13 Jan
Romania	Banca Transilvania, Sun Oracle	Data management contract win	Romania’s largest locally-owned private sector lender Banca Transilvania, has become the first bank in the world to implement Sun Oracle’s Exadata Database integrated system. In a statement, the bank said it had plans to undertake a number of IT projects in 2010, including replacement of its card issuing and acceptance system as well as a planned upgrade of its online channel.	13 Jan
Kuwait	National Bank of Kuwait, First Data	Processing contract extension	National Bank of Kuwait has extended its existing processing contract with First Data which dates back to 2001.	13 Jan
Germany	Deutsche Postbank, Aim Software	Data management contract win	Deutsche Postbank is to implement Aim Software’s data processing Golden Copy software.	13 Jan
UK	Experian, I-SEC Technolgies	Joint venture	Experian has teamed up with identity document authentication vendor I-SEC Technologies to provide document checking technology to be used in bank branches and other high-volume organisations.	12 Jan
Country	Participants	Type/value	Details	Date
US	Peoples State Bank, Jack Henry	Core banking contract win	Wisconsin-based regional lender Peoples State Bank is to deploy Jack Henry Banking’s SilverLake core processing system to provide enterprise-wide automation.	12 Jan
Finland	S-Bank, SAS	Data management contract win	Finish-based supermarket bank S-Bank is to implement data storage and management software from business analytics software and services vendor SAS.	11 Jan
US	Integrated Bank Technology, State Bank of La Junta	Data processing contract win	Core processing and imaging software vendor Integrated Bank Technology has agreed a deal to supply Colorado-based State Bank of La Junta with its Integrated Image Teller product.	11 Jan
UK	Barclays, Accenture	Outsourcing deal cancelled	Barclays is to end a six-year, £400 million ($652 million) IT outsourcing contract with Accenture when it expires in June, taking the work back in-house.	11 Jan
China	Longtop Financial Technologies, Giantstone Information & Technology	Acquisition	China-based software developer and solutions provider Longtop Financial Technologies has agreed a deal to acquire local core banking solution provider Giantstone Information & Technology.	11 Jan
US	Heartland Payment Systems, Visa	Dispute settlement	US-based payment processor Heartland Payment Systems is to pay up to $60 million to issuers of Visa-branded credit and debit cards affected by a data breach suffered at the processor in 2008.	8 Jan
Germany	Degussa Bank, TSYS	Processing contract win	German-based Degussa Bank has agreed a multi-year outsourcing deal with US-based card processor TSYS.	7 Jan
US	Merced School Employees Federal Credit Union, Fiserv	M-banking services contract win	Merced School Employees Federal Credit Union, is now providing members access to mobile financial services via Fiserv’s Mobile Money service.	7 Jan
France	Temenos, Viveo	Acquisition	Swiss-based core banking vendor Temenos has agreed the biggest acquisition in its history, an $81 million deal to snap up French-based rival Viveo.	6 Jan
Japan	Experian, A-Care Systems	Acquisition	Credit information firm Experian has taken an 88.5 percent stake in Japanese email marketing company A-Care Systems for an undisclosed amount. A-Care had revenues of ¥2.6 billion ($28.3 million) in the year to 30 September 2009, with assets of ¥1.5 billion, and will form part of Experian’s permission-based email marketing and customer intelligence services unit, Experian CheetahMail.	5 Jan
US	EMC, Archer Technologies	Acquisition	Data storage vendor EMC is to acquire US-based security, risk and compliance software firm Archer Technologies.	5 Jan
UK	Lloyds Banking Group, Teradata	Marketing contract win	The UK’s largest retail banker, Lloyds Banking Group, is to roll out Teradata Relationship Manager software for customer communications and analysis across its Lloyds TSB, Halifax and Bank of Scotland retail brands.	4 Jan
US	Verifone, Clear Channel	Acquisition	VeriFone, the US secure payments provider has acquired the Clear Channel Taxi Media business from Clear Channel Outdoor.	4 Jan
France	Gemalto, Xiring	Acquisition	Gemalto has closed the deal to acquire French-based card authentication vendor Xiring (see RBI 623). The cash transaction of €20 million ($29 million) covered all Xiring’s activities concerning authentication solutions based on EMV standards for online banking and e-commerce.	31 Dec 2009
India	IBM, Sardar Bhiladwala Pardi People’s Co-operative	Managed continuity services	IBM has signed a 10-year information technology services agreement with Sardar Bhiladwala Pardi People’s Co-operative Bank, one of the leading co-operative banks in Gujarat. As part of the deal, IBM will provide the bank managed continuity services comprising server management, network and security management and back-up and database management.	28 Dec 2009
Brazil	Redecard, Discover Financial Services	Processing contract win	Brazilian-based credit-card processing network Redecard SA has agreed a deal to handle transactions from overseas holders of Discover Financial Services within Brazil, making Redecard the first Brazilian processor to accept Discover cards.	23 Dec 2009
Belgium	ING Belgium, Atos Origin	Card services contract renewal	French-based IT services group Atos Origin has extended its payment card services contract with ING Belgium until the end of 2013. In addition to existing services, including the processing of all the bank’s debit and credit card payment transactions, Atos Worldline will be exploring new opportunities together with ING Belgium. Atos Worldline services cover the processing of all ING Belgium payment transactions for their 2.3 million debit and credit cards.	22 Dec 2009
China	Guangdong Rural Credit Union, TCS	Core banking contract win	Guangdong Rural Credit Union, the largest provincial credit union in China, has successfully gone live with TCS BaNCS Core Banking solution.	21 Dec 2009
France	Crédit Agricole, Wincor Nixdorf	Self-service contract win	Crédit Agricole is to control its 22,000 self-service systems throughout Europe with Wincor Nixdorf’s ProClassic/Enterprise Retail Banking Solution Suite following a major software contract win by the German-headquartered vendor. Previously, the bank has used a variety of software solutions to operate its self-service networks of ATMs, transaction terminals and statement printers.	16 Dec 2009
US	KaChing	Capital raising	Social investment website start-up KaChing, launched as an SEC-registered investment adviser and pitched as an alternative to mutual funds, has raised $7.5 million in a financing round.	16 Dec 2009
South Korea	SK Telecom, Hana Financial	Acquisition	South Korean mobile carrier SK Telecom is to purchase 49 percent of Hana Card, part of South Korean banking group Hana Financial Group, making it the first telecoms operator in the credit card market with an estimated $350 million stake in the Hana card unit.	11 Dec 2009
Source: RBI